How rental income is taxed
SARS does not tax rent on its own. You add up the rent received during the tax year (1 March to the end of February), subtract the expenses incurred in earning it, and the net amount joins your salary, interest and any other income on your ITR12. Tax is then worked out on the total, so the rental profit is taxed at the highest rate your income reaches. This calculator does that by comparing the tax on your income with and without the rental, using the same tables as the SARS tax tables page.
Worked example: a sectional title flat
Sipho earns a salary that gives him taxable income of R520,000. He lets a two-bedroom flat for R9,500 a month for the full year, and the agent takes 8% of the rent. His costs for the year are R54,000 bond interest, R9,600 rates, R18,000 levies, R2,400 insurance, R4,500 repairs and R9,120 agent's fees.
- Rent received: R114,000
- Deductible expenses: R97,620
- Net rental income: R16,380
- Extra tax on R520,000 plus R16,380: R5,386.80
That is R448.90 a month he should put aside, because no tax is deducted from rent before it reaches him. The tax is 32.9% of the profit, a blend of 31% and 36%, because the rent takes his income across the line where the next bracket starts.
Expenses SARS allows against rent
An expense is deductible if you incurred it to earn the rental income. SARS lists rates and taxes, bond interest, advertising, estate agent fees, homeowner's insurance, garden services, repairs, security and levies. The test for anything else is the same: was it spent to produce the rent, and is it a running cost rather than a capital one.
Three things catch landlords out. Only the interest part of a bond repayment counts. The insurance SARS allows is homeowner's cover on the building, not insurance on your own belongings. And improvements are not repairs: replacing a broken geyser restores what was there and is deductible, while adding a carport creates a better asset and is not. Keep improvement invoices anyway, because they increase your base cost when you sell; the capital gains tax calculator shows the effect.
Wear and tear on furniture and appliances
If you let the property furnished, the cost of the furniture, fridge, washing machine and similar items is not deducted in one go. SARS's Binding General Ruling 7 accepts a write-off period of 6 years for furniture and fittings, so each year you claim one sixth of the cost. An item bought part-way through the year gets a proportionate allowance for that first year. The calculator uses the full-year figure.
Letting part of your own home
A garden cottage, a granny flat or a room in the house is taxed in the same way, but costs that cover the whole property must be split. SARS's approach is to apportion by floor area. Take a cottage that is 25% of the property's floor area, let for R6,000 a month, on a home with R96,000 bond interest, R24,000 rates and R7,200 insurance a year, plus R1,500 repairs to the cottage and R21,000 of furniture in it. The deductible share of the property costs is R31,800, wear and tear adds R3,500, and the net rental income is R35,200. On taxable income of R380,000 that adds R10,757.00 in tax.
Airbnb and other short-term letting
Income from guests is rental income. SARS has said so specifically about short-term hosting platforms, and its rental guidance covers holiday homes, guesthouses and bed-and-breakfasts. Count the payouts you received in the tax year, after the platform's commission, or count the gross bookings and deduct the commission as an expense. Private use is not a rental cost, so if you also stay in the property yourself, split the costs between the time it was let and the time you used it.
VAT works differently for the two types of letting. Letting a dwelling under a lease is exempt from VAT, but the VAT Act's definition of a dwelling leaves out commercial accommodation, which is where guesthouses and similar short stays can fall. A host whose taxable supplies pass R2,300,000 in 12 months must register. The VAT registration checker tests your turnover against the threshold.
Extra tax on a R16,380 rental profit
The same profit costs more tax the more you earn elsewhere. This table uses your net rental profit from above and the 2026/27 tables for someone under 65.
| Other taxable income | Marginal rate | Extra tax a year | Per month |
|---|---|---|---|
| R150,000 | 18% | R2,948 | R246 |
| R300,000 | 26% | R4,259 | R355 |
| R450,000 | 31% | R5,078 | R423 |
| R600,000 | 36% | R5,897 | R491 |
| R800,000 | 39% | R6,388 | R532 |
| R1,200,000 | 41% | R6,716 | R560 |
| R2,000,000 | 45% | R7,371 | R614 |
Rental losses and section 20A ring-fencing
In the first years after buying, bond interest often exceeds the rent. A rental loss normally reduces your other income, so part of it comes back as lower tax on your salary. Section 20A limits this for higher earners. From 1 March 2026 it can apply once your taxable income, before the loss, reaches R695,801, the level where the 39% rate starts. Before that date it only applied in the top bracket.
Above that income, a rental loss is ring-fenced if the rental has made a loss in at least three of the last five years, or if less than 80% of the accommodation is let to people who are not your relatives for at least half the year. A ring-fenced loss is not lost. It is carried forward and set off against rental profit in later years. For example, a flat losing R41,400 a year saves its owner R14,904 in tax at R600,000 of other income, but at R900,000 with three loss years the same loss is ring-fenced: all R41,400 is carried forward and saves nothing that year. SARS can still allow the loss if you show a reasonable prospect of making a profit within a reasonable period.
Provisional tax on rental income
Rent is not remuneration, so no PAYE is deducted from it, and anyone who earns it is a provisional taxpayer unless an exemption applies. An individual is exempt if taxable income is below the tax threshold, or if taxable income from rent, interest and foreign dividends is R30,000 or less for the year. Otherwise you pay provisional tax twice a year: the first payment by 31 August and the second by the last business day of February. Use the provisional tax calculator to split the estimate, and see the bond repayment calculator for the interest figure on a new loan.
Frequently asked questions
How much tax do I pay on rental income in South Africa?
There is no flat rental tax. Your net rental income, after deductible expenses, is added to your salary and other income and taxed at your marginal rate, which runs from 18% to 45% for 2026/27. In the worked example above, a flat earning R114,000 a year with R97,620 of expenses adds R5,387 to the owner's tax bill.
Can I deduct my whole bond repayment?
No. Only the interest portion is deductible. The capital part of each instalment repays the loan and is not an expense. Your bank's annual bond statement or interest certificate shows the interest for the tax year, which is the figure to enter here.
Is Airbnb income taxable?
Yes. SARS treats income from hosting paying guests the same as any other rent, whether it comes from a holiday home, a guesthouse, a B&B or a room in your house. It must be declared on your return, and the same expenses can be deducted against it, apportioned if you also use the property yourself.
Can I claim the cost of a new geyser or roof?
Replacing a broken geyser or fixing a leaking roof restores the property to its previous condition, so it is a deductible repair. Adding something that was not there before, such as a carport or an extra bathroom, is an improvement. Improvements are not deductible against rent but are added to the base cost for capital gains tax when you sell.
What happens if my rental makes a loss?
The loss normally reduces your other taxable income, which lowers the tax on your salary. From 1 March 2026, section 20A can ring-fence the loss once your taxable income reaches R695,801, where the 39% rate starts, if the rental has made losses in three of the last five years or less than 80% of it is used by non-relatives for at least half the year. A ring-fenced loss is carried forward against future rental profit.
Do I need to pay provisional tax on rental income?
Usually, yes, if your net rental income is more than R30,000 a year and your total taxable income is above the tax threshold. Rent is not remuneration, so no PAYE is deducted from it. You register for provisional tax and pay twice a year: by 31 August and by the end of February.