When browsing through property for sale in Parys, it is important to know that this is not only going to benefit you as a place to have as a holiday home, but it comes with tax benefits too.
Of course, this isn’t a means of writing off expenses to reduce personal tax, so it is essential that you understand what the law says. Ensure that you have full clarity of current legislature as well as administrative changes that impact the South African property industry.
“We are all responsible for our own finances, and we need to be clear on and fully understand what we are investing our hard-earned money in. Also, you need to know if this would be a short-term or long-term investment that you are planning. An investment in property is possibly the largest investment you will ever make,” was the advice of Craig Hutchison, CEO of Engel & Völkers Southern Africa.
Remember tax benefits on home ownership are specifically for second homes bought for investment, or for letting out. And due to the increased demand for rental, which has impacted the ‘buy-to-let’ market, SARS has taken a big interest in expenses claimed for repairs or maintenance. For this reason, you should ensure that you manage claims wisely.
To get a better understanding of the benefits on rental income, be sure to check out all of the information on the SARS website, www.sars.gov.za.
Properties that fall under this umbrella include:
- Holiday homes
- Bed-and-breakfasts
- Guesthouses
- Sub-renting part of your house
- Dwelling houses
- Similar residential dwellings
The expenses that you would be allowed to deduct from taxable income includes bond interest, adverts, garden maintenance, repairs in respect of the area let, security, property levies, rates and taxes as well as collection fees of estate agents.
