Tax & Legal Considerations

Understanding tax implications and legal structures is crucial for maximizing returns and protecting your assets. Always consult with a tax advisor for personalized advice.

1. Rental Income Tax

Rental income is taxable and must be declared in your annual tax return. However, you can deduct various expenses to reduce your taxable rental income.

2. Capital Gains Tax (CGT)

When you sell an investment property, you may be liable for Capital Gains Tax on the profit. The annual exclusion is R40,000 for individuals, and only 40% of the capital gain is included in taxable income.

3. Legal Structures

Consider whether to hold properties in your personal name, a trust, or a company. Each has different tax implications, asset protection benefits, and estate planning considerations.

4. Transfer Duty

Investment properties are subject to the same transfer duty rates as primary residences. Properties under R1.1 million are exempt, with progressive rates above that threshold.