Rental Property Deductions: What Can SA Landlords Actually Claim in 2026?

Most South African landlords are leaving money with SARS every year because they don't claim everything they're entitled to. Others get it wrong in the opposite direction — over-claiming, triggering audits, penalties, and interest.

This guide is the definitive list of every deductible expense for residential rental properties in South Africa, with SARS source codes, common mistakes, and the repair-vs-improvement boundary that trips up so many landlords.

The Golden Rule

To be deductible under Section 11(a) of the Income Tax Act, an expense must be:

1. Incurred in the production of income (the rental income)
2. Not of a capital nature
3. Actually paid or accrued in the tax year
4. Supported by a valid tax invoice or receipt

If any of those four conditions fail, you cannot claim it. Keep this framework in mind as we go through the list.

The Complete Claim Checklist

1. Bond Interest (Usually the Biggest Deduction)

Only the interest portion of your bond repayment is deductible — not the capital. Your bank sends an IT3(b) certificate each year showing the split.

Common mistake: Claiming the entire bond repayment. This is the #1 audit flag for landlords.

Pro tip: If you re-bonded to fund an improvement, split the interest pro-rata between the rental portion (deductible) and improvement portion (capitalised).

2. Rates and Taxes

Municipal property rates levied by your local council — fully deductible.

Not deductible: Water, electricity, refuse if you separately charge the tenant. If you pay the full bill and recharge, declare the recharge as income and the full bill as expense (net zero).

3. Levies

• Sectional title scheme levies
• Body corporate special levies
• Homeowners' association (HOA) levies
• Estate security levies

All deductible except special levies that fund improvements (e.g. a special levy to build a new clubhouse — that's a capital contribution, not deductible).

4. Insurance

• Building / structural insurance
• Landlord insurance (loss of rent, malicious damage)
• Public liability (if applicable)

Not deductible: Household contents insurance for the tenant's belongings.

5. Repairs and Maintenance

This is where landlords lose money to SARS by being too conservative — or get audited by being too aggressive. The test:

Repair = restore to original condition → 100% deductible Improvement = enhance or extend useful life → capitalised (added to base cost)

Always deductible repairs:

• Repainting existing walls
• Replacing broken/damaged fixtures with equivalent ones
• Patching a leaking roof (not replacing it)
• Unblocking drains and plumbing fixes
• Servicing the geyser, air-con, pool pump
• Replacing a few cracked tiles
• Repairing a damaged fence or wall
• Exterminator / pest control
• Touch-up plastering

Capital improvements (not deductible now, reduce CGT later):

• New roof (full replacement)
• New kitchen or bathroom
• Adding a room, garage, or granny flat
• New driveway / paving
• Installing solar panels, inverter, battery
• Installing an alarm system or electric fence (first-time)
• Swimming pool construction
• Borehole installation

Grey areas SARS scrutinises:

• Geyser replacement — typically a repair if like-for-like; improvement if upgrading to solar
• Flooring — if you replace tiles with tiles, it's a repair; tiles → hardwood is an improvement
• Painting — interior/exterior repaint is a repair; painting a new extension is part of the capital cost

6. Rental Agent & Management Fees

Fully deductible:

• Monthly management commission (typically 8–10% of rent)
• New tenant placement fee (typically 1 month's rent)
• Rent collection fee
• Inspection fees
• Eviction handling fees

7. Advertising & Marketing

For placing new tenants:

• Property24 / Private Property listings
• Gumtree sponsored posts
• Newspaper classifieds
• Signage and printing
• Professional photography
• Virtual tour / video fees

8. Legal & Professional Fees

• Lease agreement drafting
• Eviction application costs
• Debt collection attorney fees
• Accountant / bookkeeping fees (related to the rental)
• Subscription to rental software (e.g. BodmasBooks™)

Not deductible: Conveyancer fees on purchase (these form part of base cost for CGT).

9. Bank Charges

Deductible if levied on a dedicated rental bank account. Mixed personal accounts are messier — apportion pro-rata.

10. Security Costs

• Armed response monthly fee
• Alarm monitoring
• Guard services
• CCTV monthly service fee

Not deductible: First-time installation of alarm/CCTV systems (capital).

11. Garden & Pool Services

If the landlord pays (not the tenant):

• Monthly garden service
• Pool service
• Tree felling / pruning (for safety/maintenance, not beautification)

12. Cleaning

• Professional cleaning between tenants
• Ongoing cleaning during vacancies
• Short-term rental cleaning fees (Airbnb turnover)

13. Utilities

Only the portion you pay (not recharged to tenant):

• Water (standing charges during vacancies)
• Electricity (standing charges, or between tenants)
• Refuse removal

14. Travel to the Property

For inspections, meetings, repairs. Keep a logbook. The rate for 2025/26 is R4.80/km (simplified method).

Not deductible: Travel for personal use of the property (your holiday visits).

15. Stationery, Postage, Phone, Internet

Pro-rata portion related to rental admin. Usually 5–10% is reasonable for a 1–3 property portfolio.

16. Rental Software Subscriptions

Fully deductible — and if you're not using one, you're almost certainly under-claiming or over-claiming somewhere.

17. Levy Arrears Collection

For sectional title owners whose body corporate charges interest on late levies — the interest is deductible.

18. SARS Disputes & Objections

Fees paid to a tax practitioner for handling rental-related SARS disputes — deductible.

19. Inspection & Condition Reports

Entry, exit, and mid-term inspection costs (whether done by the landlord, agent, or third party).

20. Bond Registration Interest (Partial)

Not the registration fees themselves (those are capital), but the interest on the bond during vacancy — still deductible as part of bond interest.

What You Cannot Claim (Ever)

• Capital portion of bond repayments
• Purchase price of the property
• Transfer duty
• Conveyancing fees on acquisition
• Improvements (ever — they come off at CGT time)
• Private-use portion (if you occupy for part of the year)
• Fines, traffic penalties, SARS interest on late payments
• Deposits held in trust (these aren't your money until forfeited)
• Your own time/labour

What If the Property Stood Vacant?

Expenses incurred during a bona fide vacancy (actively marketed) are still deductible. But if the property was genuinely not available for let (renovations, personal use, kept empty for family), apportion accordingly.

Apportionment for Mixed Use

If you live in part of the property and rent the rest (e.g. a cottage on your plot):

• Direct expenses (repairs to the cottage only): 100% deductible
• Shared expenses (bond, rates, insurance): apportion based on floor area ratio (and document this!)

Documentation Rules (Save 5+ Years)

SARS can request supporting documents up to 5 years after assessment. Store:

• All invoices and receipts (digital is fine)
• Bank statements
• Bond interest certificates
• Rental agent statements
• Lease agreements
• Logbook for travel
• Floor area apportionment calculations

The Fastest Way to Get This Right

Tracking 20+ deduction categories across multiple properties, with SARS source codes, and splitting repairs from improvements manually — this is exactly what BodmasBooks™ automates. Every expense is pre-categorised, the AI assistant flags likely improvements before they hit your books, and year-end gives you a tax pack ready for eFiling.

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General guidance only. Consult a registered tax practitioner for your specific circumstances.