If you earn an income through the letting out of a property, even the sub letting out a portion of your house, such as a cottage or back room, you need to disclose and pay tax on this rental income earned.

SARS allows the following expenses to be deducted

• The monthly interest portion paid on the mortgage (But not the capital mortgage portion)
• Monthly rates & taxes
• Water & electricity
• Garden services
• Repairs & Maintenance (But not improvements or additions to the property such as extra rooms etc)
• Depreciation on certain house items such as furniture in furnished apartments

NB: since rental income does not form part of an employee/employer relationship, proceeds from rental income cannot be included on a payslip however, it will be included on an IRP5 for the determination of personal income when filing annual returns during a specified tax season.