Adding a room, granny flat or cottage
Base cost only
Building an extra room or cottage is an improvement with no immediate deduction, though a new residential unit built to let may open a specific allowance.
No deduction now, it reduces tax when you sell · Landlord
Construction adds to base cost and is never a repair. Where the new unit is a residential unit acquired or built to produce rental income, the residential unit allowance regime may apply, but it has real conditions including that the unit be new and unused and, in some parts of the regime, that you own several units. Once the cottage is let, its running costs and repairs become deductible in the normal way.
Where people go wrong
Assuming the residential unit allowance applies to any new granny flat. The conditions are narrow and most one off backyard cottages do not qualify. Check before you rely on it in a return.
Does buying it save you tax?
The rental income is the point, not the tax. If the allowance genuinely applies it is valuable, so it is worth a practitioner checking the conditions before you build.
Authority s13sex
governed by Improvements to a let property increase base cost
may unlock Allowance for new residential units
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Alarm system, CCTV and armed response at a let property
Depends
The monthly armed response and monitoring fee on a let property is deductible, but installing the alarm and cameras is capital.
The answer turns on the facts · Landlord
Recurring monitoring, armed response and alarm service contracts on a property that earns rent are ordinary running costs. The installation of an alarm panel, beams and a camera system is the acquisition of an asset or an improvement to the property and is not deductible in the year. Where the equipment is genuinely removable plant used to produce rental income, a wear and tear claim may be arguable and is worth asking about.
Where people go wrong
Signing a bundled contract where the installation is amortised into the monthly fee and then deducting the full monthly amount. Ask the provider to show the equipment portion separately, because the finance and equipment component is not the same as the monitoring service.
Does buying it save you tax?
The monthly fee is a real recurring deduction most landlords do claim correctly. The hardware is not, and no security system is worth buying for the tax.
Authority s11(a) read with s11(e)
governed by Rental running expenses are deductible
may unlock Wear and tear on business assets
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Architect, building plans and municipal plan approval fees
Depends
Plan and approval fees take the character of what you are building, so they are almost always capital rather than deductible.
The answer turns on the facts · Landlord
Fees for designing and getting approval for an extension, a cottage or a new structure form part of the cost of that improvement and go to base cost, or into the allowance base if the building qualifies for a building allowance. If the plans were for a project that never went ahead, the cost is generally still capital in nature and simply lost. Plans drawn purely to regularise existing unapproved structures before a sale are a cost of disposal question worth asking about.
Where people go wrong
Deducting professional fees against rental income because they are professional fees rather than bricks. The nature of the underlying project governs, not the type of supplier.
Does buying it save you tax?
No relief now in most cases. Get the plans approved for legal and resale reasons, since unapproved structures cost far more at transfer than any deduction would have saved.
Authority 8th Schedule para 20
governed by Improvements to a let property increase base cost
may unlock Base cost includes far more than the purchase price
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Bond registration and bond initiation fees
Depends
Bond costs are financing costs, not property costs, and they usually get neither a deduction nor a place in base cost.
The answer turns on the facts · Landlord
Registering a bond relates to raising the loan, not to acquiring the property, so it does not naturally sit in base cost the way transfer duty and conveyancing do. Whether any part of the cost of raising finance is deductible against rental or business income depends on the specific provision relied on and is a question a practitioner should answer for your facts. The ongoing bond interest is a separate and much more important item and is deductible against rental income.
Where people go wrong
Two traps. First, adding bond registration to base cost alongside transfer duty because they arrived on the same attorney statement. Second, and far bigger, deducting the whole monthly bond instalment against rental income. Only the interest portion is deductible, never the capital repayment.
Does buying it save you tax?
Do not shop for a bond on the tax treatment of the setup fee. The interest deduction on a let property is where the real money is, and that follows the loan, not the fee.
governed by Transfer duty and bond costs are not deductible now
may unlock Bond interest, not the bond instalment
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Borehole drilled at a property you rent out
Base cost only
A new borehole at a let property is an improvement, so you cannot deduct it against the rent, but it does add to your base cost for capital gains tax later.
No deduction now, it reduces tax when you sell · Landlord
The rental deduction rules allow running costs and repairs, not the creation of something that was not there before. A first borehole is new capacity and is therefore an improvement. Keep the invoice for as long as you own the property, because it lifts your base cost and reduces the capital gain when you sell. The pump and pressure equipment are a separate question and may qualify for wear and tear against the rental income.
Where people go wrong
Claiming the borehole in the year you drill it because the water serves the tenants. It is the single most common improvement-dressed-as-a-repair claim in rental returns, and SARS reverses it on verification. Replacing a borehole pump that has failed is a repair; drilling a hole that never existed is not.
Does buying it save you tax?
There is no immediate tax saving. The relief arrives only when you sell, and only at the effective capital gains rate, which is well under your marginal rate. Drill it if it makes the property lettable or cheaper to run.
Authority s11(a) read with 8th Schedule para 20
governed by Repairs are deductible, improvements are not
may unlock Improvements to a let property increase base cost
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Borehole drilled at business premises you own
Capital allowance
Drilling the hole is capital, so you cannot write it off in one year, but the pump and tank equipment can usually be depreciated.
A specific capital write-off applies · Company
Sinking a borehole creates something permanent in the ground and that part is capital expenditure, blocked by the capital exclusion in the general deduction formula. Split the invoice: the drilling, casing and civils sit in the cost of the property, while the pump, motor, pressure tank and control gear are machinery and normally qualify for wear and tear. If the borehole is a genuine building improvement to a commercial building that already qualifies for the building allowance, the cost may be added to the allowance base instead.
Where people go wrong
Taking the whole borehole invoice as a repair or a running cost because the water is used in the business. SARS looks at what was created, not what the water is for. Get the contractor to itemise drilling versus equipment before you pay, because you cannot split it credibly afterwards.
Does buying it save you tax?
It is a real business asset and the equipment portion does come back to you over time at your marginal rate, but you get nothing like the full price back and nothing at all in year one for the hole itself. Drill it because municipal water is unreliable or expensive, not for the tax.
Authority s11(a) read with s11(e)
governed by General deduction for expenditure in producing income
may unlock Wear and tear on business assets
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Borehole drilled at your own private home
Base cost only
No tax deduction at all for a borehole at the house you live in, but keep the invoice because it adds to your base cost if the home is ever taxable on sale.
No deduction now, it reduces tax when you sell · Anyone
Nothing spent on your private residence is deductible, because there is no trade producing income. The cost is an improvement and goes into base cost. For most people the primary residence exclusion swallows the gain anyway, so the invoice may never be used. It matters if the home is worth well above the exclusion, if you have a qualifying home office area, or if you later move out and let the property.
Where people go wrong
Believing that because water is a necessity or because of drought restrictions there is some relief. There is none. Also, people file the invoice nowhere and then cannot prove the improvement fifteen years later when it would actually have reduced a taxable gain.
Does buying it save you tax?
Zero tax benefit now. Buy it for water security, not for tax.
Authority 8th Schedule para 20
excluded by Primary residence exclusion
governed by Base cost includes far more than the purchase price
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Borehole or dam sunk on a working farm
Capital allowance
Farmers get a special capital development allowance for boreholes, dams and water works that other businesses do not get.
A specific capital write-off applies · Farmer
The First Schedule treats certain farming capital development expenditure, including the sinking of boreholes and wells and the building of dams and water furrows, differently from ordinary capital spending. There are limits on how much can be set off against farming income in a year, with the balance carried forward. You must be carrying on genuine farming operations, not simply owning a smallholding.
Where people go wrong
Assuming the whole cost comes off this year's farming income. The capital development allowance is capped against farming income and the excess carries forward, so a big borehole in a bad year gives you far less than you expected. Also, a lifestyle smallholding that does not trade as a farm gets none of this.
Does buying it save you tax?
This is one of the genuinely favourable regimes in the Act. If you actually farm and actually need the water, the deduction is real and meaningful. It is still not free money: you get your marginal rate back, spread over the years the cap allows.
Authority First Schedule para 12
governed by General deduction for expenditure in producing income
governed by Capital development expenditure
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Borehole pump, pressure tank and pipework at business premises
Wear and tear
The moving parts of a borehole, the pump, motor and pressure tank, are plant and can be written off over their useful life against business income.
Written off over time, not all at once · Sole proprietor or freelancer
Equipment that can be removed and replaced without demolishing anything is treated as machinery or plant rather than part of the structure. SARS publishes suggested write-off periods for asset classes and you should use the closest published class rather than inventing your own life. Buried pipework laid into the ground is more likely to be treated as part of the structure and therefore capital.
Where people go wrong
Writing off the whole equipping invoice including the trenching, slab and buried pipes. Only the removable plant qualifies. The second trap is small item full write-off: a pump usually costs well above the small item threshold, so it must be depreciated rather than expensed.
Does buying it save you tax?
Yes, in the sense that the cost does eventually come off your taxable income. No, in the sense that spreading it over years at your marginal rate is a fraction of what you paid. Buy the pump you need.
Authority s11(e)
governed by General deduction for expenditure in producing income
governed by Wear and tear on business assets
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Borehole water quality testing, required for compliance or by an insurer
Deductible
A deductible compliance and running cost, separate from the borehole's own capital treatment.
You can claim this · Sole proprietor or freelancer
Recurring testing is an ordinary running cost, not a capital item.
Where people go wrong
None specific.
Does buying it save you tax?
Worth claiming every time it is done.
Authority s11(a)
governed by General deduction for expenditure in producing income
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Building a new boundary wall at a property you rent out
Base cost only
Building a wall that was not there before is an improvement, so it does not come off the rent, it goes into base cost.
No deduction now, it reduces tax when you sell · Landlord
The rental rules are precise: repairs are deductible, improvements are not. A wall where there was only a fence, or a higher wall than before, adds to the property and is capital. Raising an existing wall is partly restoration and partly betterment and SARS will treat the added height as improvement. Record it as a base cost item so the money is not simply lost.
Where people go wrong
Claiming the wall because the tenants demanded it or because the insurer required it. Necessity does not turn an improvement into a repair. This claim is a standard audit finding.
Does buying it save you tax?
No deduction now and only capital gains relief on sale. Build it if it protects the asset or the rental income, not for tax.
Authority s11(d) read with 8th Schedule para 20
governed by Repairs are deductible, improvements are not
may unlock Improvements to a let property increase base cost
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Building a new boundary wall at your home
Base cost only
A new or higher boundary wall at your own home gives no deduction, it only adds to base cost.
No deduction now, it reduces tax when you sell · Anyone
Private property spending is blocked outright. The wall is a permanent improvement and goes into base cost under the capital gains rules. Most homes are covered by the primary residence exclusion, so the invoice often never gets used, but keep it anyway because the exclusion has a ceiling and the property may not always be your primary residence.
Where people go wrong
Assuming crime and security spending has some special deduction. It does not, for a private home. The only security spending that ever gets relief is spending tied to a trade.
Does buying it save you tax?
No tax benefit now. Build it because you want the wall.
Authority 8th Schedule para 20
excluded by Primary residence exclusion
governed by Base cost includes far more than the purchase price
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Burglar bars, security gates and trellidoors at your own home
Not deductible
Security fittings at your private home are not deductible, no matter how bad crime is where you live.
There is no relief for this · Salaried employee
This is private expenditure and there is no security deduction for individuals. Where you run a business from a qualifying home office, security spending that relates to the office area may be apportionable, but bars on the bedroom windows will not qualify. If the fittings are permanent, they add to base cost as improvements.
Where people go wrong
Salaried employees claiming security, alarm or armed response as work expenses because they work from home. Employees are barred from deducting ordinary work costs, and this is one of the most frequently rejected claims.
Does buying it save you tax?
No tax benefit. Buy it for safety.
Authority s23(b) read with s23(m)
excluded by Salaried employees cannot deduct ordinary work costs
may unlock Base cost includes far more than the purchase price
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Burst geyser at your own home
Not deductible
A burst geyser at your own home is a private cost with no tax relief, and the insurance payout is not taxable income either.
There is no relief for this · Anyone
No trade, no deduction. The related insurance settlement for repairing your own home is a capital receipt for a private asset and is not gross income, so you do not declare it. If part of the home is a qualifying home office, a proportionate claim on the repair may be arguable but is small and needs to be defensible.
Where people go wrong
Declaring the insurance payout as income out of caution, or worse, claiming the repair and the payout as an offset. Neither belongs in the return for a purely private home.
Does buying it save you tax?
No tax benefit. This is what household insurance is for.
Authority s23(b)
excluded by Salaried employees cannot deduct ordinary work costs
may unlock Home office expenditure
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Buying a commercial building for your business
Capital allowance
A commercial building bought for your business is written off over many years under the commercial building allowance, and only if it is new and unused when you get it.
A specific capital write-off applies · Company
The commercial building allowance gives an annual write off on the cost of a building or improvement used in producing income in the course of trade, but it is restricted to buildings that were new and unused when acquired or erected. Buying an existing second hand office block generally does not qualify, which surprises most buyers. There are separate older regimes for industrial buildings and for buildings in urban development zones, so the exact regime depends on the building and where it is.
Where people go wrong
Budgeting on the assumption that any commercial property purchase gets the allowance. The new and unused requirement excludes most ordinary purchases. Also remember the land portion never qualifies, only the building, so the purchase price must be split.
Does buying it save you tax?
Where it applies it is genuinely valuable because it turns a capital purchase into an annual deduction. Confirm eligibility before the deal, not after, because it can change what you are willing to pay.
Authority s13quin
governed by Commercial building allowance
may unlock Recoupment when an asset is sold
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Complete new roof on a property you rent out
Depends
Replacing a whole roof usually reads as an improvement, especially if the new roof is better than the old one, so the deduction is far from automatic.
The answer turns on the facts · Landlord
Repairing part of a roof restores the property. Replacing the entire roof renews a substantial whole and SARS often treats it as capital. Changing the character or quality of the roof, for example thatch to tile, or adding insulation and new trusses that were not there, pushes it firmly into improvement. Where a like for like replacement was forced by damage and the property is simply back to its former condition, a repair argument exists but you must be able to evidence it.
Where people go wrong
Assuming that because the roof leaked, the whole replacement is a repair. The leak proves the need, not the character of the spend. If you are replacing everything, expect to defend it, and get an assessor or contractor report describing the old roof's condition and confirming like for like.
Does buying it save you tax?
This is a large number and the tax answer moves a lot of money, so it is worth paying a practitioner to look at the quote before the work starts, not after.
Authority s11(d)
governed by Repairs are deductible, improvements are not
may unlock Improvements to a let property increase base cost
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Conveyancing and attorney transfer fees
Base cost only
Attorney and deeds office costs of transferring a property into your name are not deductible, they go into base cost.
No deduction now, it reduces tax when you sell · Anyone
Professional fees directly connected to acquiring or disposing of a capital asset are included in base cost, which covers conveyancing fees, deeds office fees and the transferring attorney's disbursements. On a sale, the seller's conveyancing related costs reduce the gain in the same way. Legal fees for something else entirely, such as suing a defaulting tenant, are a different question and may be deductible against rental income.
Where people go wrong
Lumping the entire attorney statement into base cost when it includes items that are not acquisition costs, such as pro rata rates and levies for the coming months. Those pro rata amounts are running costs and, for a let property, are deductible instead.
Does buying it save you tax?
No immediate saving. The value is in keeping the statement so the eventual gain is correctly reduced.
Authority 8th Schedule para 20
governed by Transfer duty and bond costs are not deductible now
may unlock Base cost includes far more than the purchase price
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Damp proofing a let property
Depends
Treating damp in an existing wall is usually a deductible repair, but installing a damp proof course that the building never had can be an improvement.
The answer turns on the facts · Landlord
Where you are restoring a failed damp proof layer or repairing water damaged plaster, that is repair. Where an older building had no damp proof course at all and you install one, you have added something new and SARS may treat it as capital. In practice many damp jobs are a mix of replastering, which repairs, and a new injected course, which improves.
Where people go wrong
Damp jobs are almost always invoiced as one number. Ask for the quote to separate the removal and replastering from any new membrane, course or tanking, because that split is the whole tax answer.
Does buying it save you tax?
The repair portion is real relief now. Do the work regardless, because damp destroys the asset and the rental income far faster than tax saves you anything.
Authority s11(d)
governed by Repairs to business property
governed by Repairs are deductible, improvements are not
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Demolishing a structure on a business or rental property
Depends
Demolition costs usually attach to whatever you build next rather than giving you a deduction, and any relief for the value of what you demolished depends on the allowance history of that building.
The answer turns on the facts · Company
Where you demolish to clear the site for a new structure, the cost is part of the capital cost of the new build. Where a structure is demolished and not replaced, whether any loss or scrapping relief is available turns on whether the demolished asset qualified for capital allowances, because relief on scrapping generally only applies to assets that were being written off. Buildings and structures often sit outside that relief, which is an unwelcome surprise.
Where people go wrong
Assuming that because you lost a real asset you must get a tax loss. If no allowance was ever claimed on the structure, there may be no scrapping deduction and the only route is the capital gains calculation on eventual disposal of the property.
Does buying it save you tax?
Do not demolish expecting a write off. Get the allowance history of the structure checked first, because that history is what decides the answer.
governed by Commercial building allowance
governed by Recoupment when an asset is sold
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Electric fencing installed at a let property
Depends
The first electric fence is an improvement you cannot deduct, but servicing or repairing an existing one is a deductible running cost.
The answer turns on the facts · Landlord
Installing electric fencing where there was none adds a new feature and is capital, so it goes to base cost. Once it exists, the annual service, replacing a blown energiser, restringing broken wires and the electric fence certificate of compliance are deductible against rental income. If the fence and energiser are genuinely removable plant rather than part of the structure, a wear and tear claim may be arguable, and that is a fact question worth asking a practitioner about.
Where people go wrong
Treating the installation and the first year service on one invoice as a single deductible security cost. Split them. The other trap is forgetting that the certificate of compliance fee, unlike the installation, is deductible for a let property.
Does buying it save you tax?
The recurring costs give a real annual deduction. The installation does not. Install it to protect the property and keep it lettable.
Authority s11(a) read with s11(d)
governed by Rental running expenses are deductible
governed by Repairs are deductible, improvements are not
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Estate agent commission when you sell a property
Base cost only
Selling commission is not an income tax deduction, it reduces your capital gain as a cost of disposal.
No deduction now, it reduces tax when you sell · Anyone
Commission paid to the agent who sold the property is a direct cost of disposal and is taken into account in working out the gain. This applies to a second property, a rental property and any other capital sale. On a primary residence it usually makes no difference because the exclusion already covers the gain. Commission paid to an agent to find a tenant is a completely different item and is deductible against rental income.
Where people go wrong
Confusing letting commission with selling commission. Letting commission and tenant placement fees are deductible now; selling commission is not, it only shows up in the capital gains calculation in the year of sale.
Does buying it save you tax?
There is no way to make selling commission deductible, so negotiate the rate rather than looking for a tax angle.
Authority 8th Schedule para 20
governed by Base cost includes far more than the purchase price
may unlock Agent commission, advertising and tenant screening
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Garden service and landscaping at a let property
Depends
A monthly gardener at a property you let is deductible, while landscaping that transforms the garden is a capital improvement.
The answer turns on the facts · Landlord
Recurring maintenance such as mowing, hedge trimming and garden refuse removal at a let property is a running cost of earning rent. Building retaining walls, laying a new irrigation system, terracing, or installing instant lawn where there was none creates something new and is capital. Replacing dead plants in an existing bed is maintenance.
Where people go wrong
Claiming the gardener at your own home because the same person also cuts the grass at the rental. Only the hours at the income producing property count, and you need an invoice that says which property.
Does buying it save you tax?
The recurring service is a real, if small, deduction that people forget. The landscaping is not.
Authority s11(a)
governed by Rental running expenses are deductible
governed by Apportionment for part of a property or part of a year
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Improvements a tenant makes to leased premises
Capital allowance
If your lease obliges you to improve the premises, you can write the cost off over the lease period, but the landlord may be taxed on the value of what you built.
A specific capital write-off applies · Company
Where a lease requires the tenant to effect improvements, the tenant gets an allowance spread over the period of the lease rather than an immediate deduction, and the lease term used for this purpose is capped. The mirror side is that the landlord may have to include the value of the improvements in income. Voluntary improvements not required by the lease sit in a different and less favourable position.
Where people go wrong
Doing the fit out without the lease actually obliging you to do it. The wording of the lease is what unlocks the tenant allowance, so the tax outcome is decided by the lawyer drafting the lease long before the builder arrives. Fix the wording before signing.
Does buying it save you tax?
The allowance is real and worth having, but it is spread over the lease, so a long fit out on a short lease is still expensive cash. Get the lease clause right, because that is the free part.
Authority s11(g)
governed by General deduction for expenditure in producing income
governed by Lease premiums and leasehold improvements
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
JoJo water tank at your own home
Not deductible
A water tank at your private home gives you no tax relief of any kind.
There is no relief for this · Anyone
There is no deduction because there is no trade. Whether it even reaches base cost depends on how it is installed: a tank bolted to a plinth and plumbed into the house is an improvement to the property, while a freestanding tank you could load onto a bakkie is a movable personal use asset and personal use assets are disregarded for capital gains tax.
Where people go wrong
Confusing this with the solar energy rebate for individuals. That rebate is narrow and is about generation equipment, not water storage. There is no water tank equivalent.
Does buying it save you tax?
No tax benefit. Buy it for water security.
Authority s23(a)
excluded by Salaried employees cannot deduct ordinary work costs
governed by Personal use assets are disregarded
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Kitchen renovation in a property you rent out
Depends
Ripping out and rebuilding a kitchen is normally an improvement, while replacing a broken cupboard door or a leaking sink is a repair.
The answer turns on the facts · Landlord
A full kitchen renovation renews a substantial whole and usually adds quality, so it is capital and goes to base cost. Piecemeal work such as replacing damaged worktops, rehanging doors, or replacing a failed built in oven with an equivalent one, argues far better as a repair. Modern equivalents do not automatically make something an improvement, but going from melamine to stone worktops and doubling the cupboard run does.
Where people go wrong
Doing the renovation in stages across two tax years and claiming each stage as a repair. SARS looks at the project, not the invoice dates, and a staged rebuild is still a rebuild.
Does buying it save you tax?
Mostly capital, so no deduction now. Renovate if it lifts the rent enough to pay for itself, because the tax system will not.
Authority s11(d) read with 8th Schedule para 20
governed by Repairs are deductible, improvements are not
may unlock Improvements to a let property increase base cost
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Levies on a sectional title unit
Depends
Levies on a flat you rent out are deductible, levies on the flat you live in are not, and a special levy for a building improvement is capital either way.
The answer turns on the facts · Landlord
Ordinary monthly levies on a let unit cover maintenance, insurance and running of the common property and are deductible against the rental income. On your own home they are private. A special levy needs looking at: if it funds repairs such as repainting the block or fixing the roof, it follows the repair treatment, but if it funds an improvement such as new lifts, a new guard house or an upgraded generator, it is capital and goes to base cost.
Where people go wrong
Deducting a large special levy in full against rental income without asking the body corporate what it was for. Ask the trustees or managing agent for the written resolution, because that document is what tells you, and SARS, whether it was repair or improvement.
Does buying it save you tax?
The ordinary levy on a let unit is a real and often understated deduction. The special levy usually is not, so do not assume it.
Authority s11(a) read with s11(d)
governed by Rental running expenses are deductible
governed by Repairs are deductible, improvements are not
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Municipal rates, refuse and water on a property you rent out
Deductible
Rates, refuse and municipal water that you as the landlord actually pay are fully deductible against your rental income.
You can claim this · Landlord
These are ordinary running costs of producing rental income and come off the rent in the year incurred. Only the portion you carry counts: if the tenant pays or reimburses the water and lights, you cannot also deduct it. If the property was let for only part of the year or only part of the property is let, apportion accordingly.
Where people go wrong
Deducting the full municipal account when the lease makes the tenant liable for water and electricity and they pay you back. The reimbursement is income and the expense is yours only to the extent you truly bore it, so claiming both sides is a double count.
Does buying it save you tax?
Yes, this is a real deduction on money you had to spend anyway. Nothing to buy here, just make sure you actually claim it, because it is one of the most commonly forgotten rental costs.
Authority s11(a)
governed by Rental running expenses are deductible
governed by Apportionment for part of a property or part of a year
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Occupational rent paid or received before transfer
Depends
Occupational rent received by the seller is taxable income, and occupational rent you pay is only deductible if you are using the property to earn income.
The answer turns on the facts · Anyone
If a buyer takes occupation before transfer and pays you occupational rent, that is rental income in your hands and must be declared, even though it is short lived. If you are the buyer paying it, the payment is private if you are moving into your own home, and deductible if you immediately let the property or trade from it. Where the buyer is a business taking early occupation of trading premises, the payment is an ordinary occupancy cost.
Where people go wrong
Sellers leaving occupational rent out of the return because it came through the conveyancer rather than a tenant, or because it was only for two months. The attorney's statement is a document SARS can see, and small omissions are still omissions.
Does buying it save you tax?
Nothing to buy here. The point is to declare it correctly and to remember that a buyer moving into their own home gets no deduction for it.
Authority s11(a)
governed by Rental running expenses are deductible
governed by Short term letting is still rental income
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Palisade fencing at business premises
Depends
New fencing at business premises is capital, and whether you get an allowance at all depends on how the fence is classified and what the building qualifies for.
The answer turns on the facts · Company
Fencing is not a running cost. For a general trading business it is usually part of the cost of the property with no separate annual allowance, which is why so many businesses get nothing for it. Where the premises qualify under a building allowance regime, fencing may form part of an improvement to the building. Farmers have a specific capital development route for fencing that other businesses do not have. This genuinely turns on the facts, so get it looked at before you assume.
Where people go wrong
Assuming that because a fence protects the business it must be deductible or depreciable. Much perimeter work ends up as non depreciable capital, which is the unpleasant answer nobody plans for. Repairing an existing fence, by contrast, is deductible.
Does buying it save you tax?
Often the honest answer is that there is no tax relief on new fencing for an ordinary business. Budget for it as a full cash cost.
governed by General deduction for expenditure in producing income
may unlock Commercial building allowance
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Patching a leaking roof at a property you rent out
Deductible
Fixing a leak, replacing broken tiles or resealing a section of roof at a let property is a deductible repair in the year you pay it.
You can claim this · Landlord
This is the clearest example of a repair: you restore a damaged part so the property performs as it did. It stays a repair even if the new tiles or sheeting are a modern equivalent of the old ones. Keep the itemised invoice and, if possible, photographs, because roof invoices are a common verification target.
Where people go wrong
Letting the contractor bundle the patch job with a full waterproofing overhaul or new gutters on one line item. The patch is deductible, the overhaul may not be, and an unsplit invoice can sink both.
Does buying it save you tax?
Yes. Real deduction, real cash saving at your marginal rate, on money you had no choice but to spend.
Authority s11(d)
governed by Rental running expenses are deductible
governed by Repairs are deductible, improvements are not
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Paving and a new driveway at a rental property
Depends
Paving a driveway that was bare ground is an improvement, but relaying sunken paving that is already there is a repair.
The answer turns on the facts · Landlord
First time paving creates something new and goes to base cost. Lifting and relaying the same paving where it has sunk or cracked restores the original and is deductible against rental income. Replacing paving with a materially better surface, for example bare gravel to full tarmac with drainage, is improvement even though there was a surface before.
Where people go wrong
The word resurfacing on the invoice does a lot of hiding. If the area was never surfaced, resurfacing is a misnomer and the claim fails. Photographs of the before state are what actually win this argument on verification.
Does buying it save you tax?
The repair half saves tax now at your marginal rate. The improvement half only helps on sale. Pave it if it affects what you can charge in rent.
Authority s11(d)
governed by Repairs are deductible, improvements are not
may unlock Improvements to a let property increase base cost
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Property valuation fee
Depends
A valuation obtained to work out your capital gain can count in base cost, while a valuation the bank required for your bond does not.
The answer turns on the facts · Anyone
The purpose of the valuation is what decides it. A valuation obtained for the purpose of determining a capital gain or loss, including a valuation date valuation for a property held before capital gains tax started, is the kind of cost the base cost rules contemplate. A valuation done to satisfy a lender is a financing cost. A valuation for a divorce, an estate or insurance is neither.
Where people go wrong
People who owned property before the capital gains valuation date and never got a valuation in time lose the option and are pushed onto a less favourable method of working out the pre valuation date portion. That deadline has passed, so the practical trap now is assuming a valuation obtained today can be backdated. It cannot.
Does buying it save you tax?
A valuation is worth paying for when it materially reduces a taxable gain and you can support the number. Otherwise it is a cost with no return.
Authority 8th Schedule para 20 read with para 26
governed by Base cost includes far more than the purchase price
governed by Assets held before the valuation date
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Rainwater harvesting system at a let property
Depends
Replacing rotten gutters on a let property is a deductible repair, but adding a whole harvesting and filtration system is an improvement you cannot deduct.
The answer turns on the facts · Landlord
The dividing line is whether you restored what was there or created something new. Like for like gutter and downpipe replacement restores the original, so it is a repair against rental income. Tanks, pumps, filters and a new plumbing loop that never existed add capacity and function, so they are improvements that go to base cost. Where one contractor does both on one invoice, insist on separate lines.
Where people go wrong
One invoice reading "water works" for a job that was ninety percent new tanks and ten percent gutter repair, claimed in full. On verification SARS asks for the itemised quote and disallows the lot when it cannot be split.
Does buying it save you tax?
Only the genuine repair portion saves tax this year. The rest waits for the sale. Do it to cut the water bill or make the property lettable.
Authority s11(d)
governed by Repairs are deductible, improvements are not
may unlock Rental running expenses are deductible
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Rates and water on your own home
Not deductible
Rates and water on the house you live in are not deductible, unless you qualify for a home office and then only the business share.
There is no relief for this · Salaried employee
Household costs are private and blocked. The one door out is a home office that meets the strict requirements: a specific part of the home, regularly and exclusively used for trade, and properly equipped. Where that is met, rates, water and similar occupancy costs are apportioned by floor area. Salaried employees face extra restrictions that most people do not meet.
Where people go wrong
Working from home most days and assuming that unlocks the deduction. Exclusivity is the killer: a desk in the corner of the lounge or a spare room that also takes guests fails, and SARS asks for a floor plan and photographs on verification.
Does buying it save you tax?
For most salaried people the honest answer is that this claim is not available and pushing it invites an audit. For a sole proprietor with a genuinely separate office room it is a real, if modest, deduction.
Authority s23(b)
excluded by Salaried employees cannot deduct ordinary work costs
may unlock Home office expenditure
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Rebuilding a collapsed section of an existing wall at a let property
Deductible
Repairing or rebuilding a damaged part of an existing wall at a let property is a deductible repair, not an improvement.
You can claim this · Landlord
Restoring a part of a whole to its former condition is the textbook repair. It stays a repair even if modern materials are used, because you cannot buy 1970s bricks. It stops being a repair when you take the chance to make the wall taller, longer or fundamentally better than it was. If you rebuild the entire wall from scratch, SARS may argue you renewed the whole asset rather than repaired part of it.
Where people go wrong
Rebuilding the fallen ten metres and then continuing around the rest of the property in the same job. The fallen section is a repair, the rest is an improvement, and if the invoice does not distinguish them you risk losing the deductible half too.
Does buying it save you tax?
Yes, this is genuine relief in the year you spend it, at your marginal rate. Just keep the before photographs and the itemised quote.
Authority s11(d)
governed by Rental running expenses are deductible
governed by Repairs are deductible, improvements are not
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Repainting a property you rent out
Deductible
Repainting a let property is a deductible repair, including the repaint between tenants.
You can claim this · Landlord
Painting restores the property to its former condition and does not create anything new, so it is a repair against rental income. It stays deductible whether the painting is routine maintenance or a turnaround between tenants. Painting a brand new addition or painting as part of a larger renovation follows the character of that larger job instead.
Where people go wrong
Painting a property immediately before it is first let, or as part of getting it ready to let for the first time. Costs incurred to bring the property into a lettable state before income starts are on the wrong side of the line and are commonly disallowed. Once the property is in use for producing rental income, repaints are fine.
Does buying it save you tax?
Yes, and it is one of the most reliably allowed rental deductions. Keep the painter's invoice with the address on it.
Authority s11(d)
governed by Repairs are deductible, improvements are not
governed by Vacant periods do not stop the deduction
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Repainting your own home
Not deductible
Painting the home you live in gives you nothing back, and it does not even add to base cost because it is maintenance rather than an improvement.
There is no relief for this · Anyone
Private expenditure is blocked. Unlike a wall or an extension, a repaint is generally maintenance that preserves rather than improves, so the capital gains rules do not let you add routine maintenance on your residence to base cost either. If you have a qualifying home office, painting that specific room may be apportionable, which is one of the few real crossovers.
Where people go wrong
Adding every home maintenance invoice to base cost at sale in the belief that all spending on the property counts. Base cost takes improvements and certain costs of acquisition and disposal, not routine upkeep, and an inflated base cost claim is a misstatement.
Does buying it save you tax?
No tax benefit. Paint it because it needs painting.
Authority s23(a) read with 8th Schedule para 20
excluded by Base cost includes far more than the purchase price
excluded by Salaried employees cannot deduct ordinary work costs
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Repair or improvement: how to tell the difference
Depends
Ask three questions: was it there before, did you restore it or better it, and did you renew a part or the whole thing.
The answer turns on the facts · Landlord
A repair restores a subsidiary part of a whole to its former condition, using materials that may be modern equivalents of the originals. An improvement creates something new, increases capacity or quality, or renews the entire asset. Applied concretely: patching a leaking roof is a repair, replacing the whole roof in a better material is an improvement; relaying sunken paving is a repair, paving bare ground is an improvement; replacing a burst geyser like for like is a repair, fitting solar water heating is an improvement; replastering a damp wall is a repair, installing a damp proof course that never existed is an improvement.
Where people go wrong
The invoice wording decides too many of these arguments. Contractors write renovation, upgrade and refurbishment because it sounds like better work, and those words read as improvement to a SARS verifier. Ask for the quote to describe what was damaged and what was restored, ask for it to be itemised where a job mixes both, and take photographs before the work starts.
Does buying it save you tax?
This distinction is worth more than any single purchase decision on a let property, because it decides whether large sums come off this year's income or wait years for a capital gains calculation. Plan the work with it in mind.
Authority s11(d)
governed by Repairs to business property
governed by Repairs are deductible, improvements are not
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Replacing a geyser at a property you rent out
Deductible
Swapping a failed geyser for an equivalent new one at a let property is generally a deductible repair.
You can claim this · Landlord
A geyser is a part of the whole property rather than an asset in its own right, so replacing a failed one with a similar unit restores the property and is a repair. Fitting a materially better system, for example moving from an ordinary electric geyser to a heat pump or solar geyser installation, adds function and quality and is more likely to be an improvement. Also deduct the plumber's labour and the compliance certificate where the property is let.
Where people go wrong
Claiming the full amount when the insurer paid for most of it. You may only deduct what you actually bore, so net off the insurance recovery. The second trap is upgrading to solar and still calling it a repair.
Does buying it save you tax?
Yes, a genuine deduction on an unavoidable cost. Keep the plumber's invoice and the insurance settlement letter together.
Authority s11(d)
governed by Rental running expenses are deductible
governed by Repairs are deductible, improvements are not
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Sub-metering equipment to split one shared water or electricity supply between tenants or businesses
Wear and tear
The physical fix for the apportionment problem described in the shared-borehole item above: a depreciable asset written off over its useful life.
Written off over time, not all at once · Landlord
Installing a sub-meter turns an argued apportionment into a measured one, which is the strongest possible evidence for any shared-supply claim.
Where people go wrong
None specific.
Does buying it save you tax?
Worth the upfront cost for anyone sharing a single water or electricity supply with a tenant or another business, since it removes the annual argument entirely.
Authority s11(e)
governed by Wear and tear on business assets
may unlock Apportionment for part of a property or part of a year
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Swimming pool at a home or a let property
Depends
Building a pool is an improvement with no deduction anywhere, but pool servicing at a property you rent out furnished is a deductible running cost.
The answer turns on the facts · Anyone
At your own home there is no relief at all and only base cost for the construction. At a let property, construction is still capital, while ongoing chemicals, cleaning, a service contract and replacing a failed pool pump with an equivalent one are repairs and running costs deductible against the rent. If the lease makes the tenant responsible for pool upkeep, you get nothing.
Where people go wrong
Claiming pool costs at a home where only part is let, without apportioning. If you let a garden cottage and the pool serves the main house too, the deduction must be split on a defensible basis or it will be disallowed entirely.
Does buying it save you tax?
A pool is a poor tax play in every scenario. Build it because you want it, and expect the annual upkeep to be the only thing that ever touches a return.
Authority s11(a) read with s11(d)
governed by Repairs are deductible, improvements are not
governed by Apportionment for part of a property or part of a year
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Transfer duty paid when buying a property
Base cost only
Transfer duty is never deductible, not even on a rental property, but it does form part of your base cost for capital gains tax.
No deduction now, it reduces tax when you sell · Anyone
Transfer duty is a cost of acquiring a capital asset, so it fails the general deduction test regardless of what the property is used for. It is expressly the kind of acquisition cost that base cost is meant to include. Where the seller is VAT registered and the sale carries VAT instead of transfer duty, the VAT treatment is different again and may be claimable as input tax by a VAT registered buyer.
Where people go wrong
New landlords deducting transfer duty and attorney costs against the first year's rent. It is the single most common first year rental error, and it is picked up easily because the amounts are large.
Does buying it save you tax?
No relief now. File the conveyancer's statement permanently, because it is the document that proves your base cost decades later.
Authority 8th Schedule para 20
governed by Transfer duty and bond costs are not deductible now
may unlock Base cost includes far more than the purchase price
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Tree felling and removing a dangerous tree
Depends
Removing a dangerous or damaged tree at a let property is normally a deductible cost, but clearing trees to make way for building work is part of that capital project.
The answer turns on the facts · Landlord
Felling a tree that threatens the roof, the boundary wall or the tenants protects the existing income producing asset and is deductible, as is routine pruning. Clearing ground to build a cottage, a pool or a driveway is site preparation and forms part of the capital cost of what you build. At your own home there is no deduction either way.
Where people go wrong
Doing the felling in the same month as a build and putting it on the builder's invoice. It then reads as site clearance and loses its deductible character.
Does buying it save you tax?
The safety and maintenance version is a genuine deduction. Never delay felling a dangerous tree over tax, since the liability if it falls dwarfs the deduction.
Authority s11(a)
governed by Rental running expenses are deductible
governed by Repairs are deductible, improvements are not
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Water and electricity at rented business premises
Deductible
Utilities at premises you use to trade from are fully deductible in the year you incur them.
You can claim this · Sole proprietor or freelancer
Water, electricity, refuse and sewerage at business premises are classic running costs. Keep the municipal statements or prepaid receipts, not just the bank line, because SARS asks for the underlying document. If the premises are partly residential, apportion honestly on floor area or metered use.
Where people go wrong
Paying the landlord a lump rental that includes utilities and then also claiming utilities separately from an estimate. Deduct what the documents show you paid.
Does buying it save you tax?
Yes, and it costs you nothing extra to claim it properly. This is money you spent anyway, so make sure it is in the return.
Authority s11(a)
governed by General deduction for expenditure in producing income
may unlock Home office for a sole proprietor
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Water tanks and backup water storage at business premises
Wear and tear
Backup water storage a business installs to keep trading is usually a depreciable asset rather than an outright deduction.
Written off over time, not all at once · Company
For a business that cannot operate without water, such as a restaurant, laundry, car wash or salon, the expenditure is clearly in the production of income. What it is not is a running cost: a tank lasts for years, so it is capital in nature and comes back through wear and tear rather than in one hit. A tank cast into a concrete reservoir or built into the building is more likely to be part of the structure with no separate allowance.
Where people go wrong
Expensing the tanks in full in the year of purchase because the reason for buying them was an emergency such as a water outage. Urgency does not change the character of the spend.
Does buying it save you tax?
The cost is recovered over time at your marginal rate. If your business genuinely stops earning without water, the tank pays for itself in trading, not in tax.
Authority s11(e)
governed by General deduction for expenditure in producing income
governed by Wear and tear on business assets
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
Water use licence application for a business borehole
Deductible
A compliance cost distinct from the capital cost of drilling the hole itself, already listed in the catalogue.
You can claim this · Sole proprietor or freelancer
The application fee itself is a deductible compliance running cost, separate from the borehole's own capital allowance or base cost treatment.
Where people go wrong
Bundling the licence fee into the capital cost of the borehole and losing a straightforward deduction.
Does buying it save you tax?
Worth claiming separately from the borehole itself.
Authority s11(a)
governed by General deduction for expenditure in producing income
may unlock Capital development expenditure
Property
Research, not advice.
This has not yet been checked against the Act or a SARS guide, so treat it as a starting
point and a question for your practitioner, not a claim you can make.
