Can you claim tax back on your property?
After purchasing property for sale in Germiston, you may be wondering whether or not you are able to claim back on tax. We will go over some of the conditions that you should be aware of as well as discuss the types of properties that offer tax benefits.
Tax can be a complicated matter and once you have purchased property for sale in Germiston, you may be unsure of what you should be doing when tax season comes around.
Firstly, if you have purchased the property as your primary residence, then you will certainly not be able to deduct costs from income tax. This falls under a personal cost and for this reason, you cannot claim back.
Now, if you have purchased property that has since been rented out to a tenant, then you should ensure that you know the rules regarding what you can claim back. Remember, if you are receiving monthly rental income for the property then you have to make sure that you record this as a taxable income as the property owner. It does not matter whether you are a corporate company, trust or individual.
It should also be noted what type of property falls under this section. If you have a bed and breakfast, or guesthouse, then you can claim back along with homes, holiday homes, garden flats or other similar residential buildings.
Craig Hutchison, CEO Engel & Völkers Southern Africa, points out that when owning investment property, all expenses are deductible from the rental income before the tax is calculated.
You cannot declare the deposits handed to you by your tenants as taxable income, but you can include the likes of rates and taxes, garden maintenance, bond interest, security, levies, homeowner insurance and more. Also be sure that you understand the difference between home improvement and repairs, as the former is not a cost that can be included.
Another important factor is your paperwork, so make sure that you keep the applicable statements, invoices and purchase slips so that they can be produced when required.
It is always best to turn to a professional for help if you are not fully aware of all the requirements. This way you can ensure that there are no shortfalls that come back to haunt you, while you will also not lose money that should be returned.
