If you earn income from renting out a property, even if you are subletting a room in your home, you need to include this when submitting your tax return to SARS.
How is tax calculated on rental income?
The profit or loss on your rental income (income less allowable expenses) will be added to your taxable income and you will be taxed in terms of your relevant tax bracket.
If you are in a partnership, you will only be taxed on your portion of the profit.
Income you need to include as part of rental income
Rental Income
Recoveries of expenses (e.g. electricity)
Deposits should not be included as income
Expenses you can deduct from rental income
Rates and Taxes
Water
Refuse
Levies
Cleaning
Garden maintenance
Security
Insurance
Repairs and maintenance (not improvements)
Finance charges on bond (SARS allows only the interest to be deducted against the rental income, not the larger bond/mortgage/capital repayment)
Commissions for estate agents or booking platforms (e.g. Airbnb)
Wear and Tear (Depreciation) on furniture
Capital expenses are not tax deductible - Understanding Capital Expenses and the Difference Between Repairs and Improvements
Apportionment if renting out a portion of house
Your expenses should be apportioned on the basis of square meters. Determine the square meters of the area being rented (this will exclude common-use areas) and determine the ratio in relation to the house (incl. includes garages and outbuildings).
If an expense (for example, aircon in the area being rented is repaired) is directly linked to the area being rented, you do not need to apportion the expense.