Investing in property in South Africa can be highly tax-efficient if handled correctly. Landlords are allowed to offset certain costs against their rental income, which lowers the amount of tax payable. These costs may include bond interest, municipal charges, levies, insurance, repairs, and property management fees. Investors can also claim depreciation on items such as appliances and furniture used in the rental property.
When the property is sold, capital gains tax (CGT) is payable on the profit made. However, knowing how to calculate the base cost, apply exemptions, and structure ownership can significantly reduce the tax burden. Properties owned for longer periods often benefit from better CGT outcomes.
There are also special allowances for investors who own multiple new residential rental units. Keeping thorough financial records and consulting a qualified tax practitioner ensures that investors claim all eligible deductions while remaining compliant with SARS, ultimately improving long-term returns.