Basic tax question

Dolby

Dolby

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Excuse the n00b question - but if I offset my income with an expense, does that mean I pay no tax on the income?

For example, I get R8,500.00 rental income. If I buy a property where the bond is R8,500.00 - do I pay no income tax, as I do not profit and the money simply comes in my account and out the next day?
 
Yep.
But an expense is interest, banks charges, agent fees, everything except for the capital portion u pay on yr bond payment.
So declare rental income on tax statemnt, calc total income, total interest...

I do that on 2 properties that i making big losses on, but atleast i get my tax back.
 
Yea, also any repairs you do on the house has a tax break (AFAIK, I owned a house in 2003 sold it in 2005)

Just declare everything and you should be fine (and probably looking at getting some nice money back)
 
You are saying one can deduct the daily living costs? You know like petrol expenses, food, holiday trips, housing costs, etc. :D I know one can do that (well most of them), if one has a registered company on ones name. Never knew, anybody qualifies, regardles. Correct me, if I misunderstood you.
 
Just becareful as you must not add your bond payment, but only the interest portion of that bond installment and bank fees.
Ask yr bank for tax year statment of interest and fees, otherwise just calculate it if u have internet banking - its the interest cap.
 
Gomario said:
You are saying one can deduct the daily living costs? You know like petrol expenses, food, holiday trips, housing costs, etc. :D I know one can do that (well most of them), if one has a registered company on ones name. Never knew, anybody qualifies, regardles. Correct me, if I misunderstood you.
Click to expand...

Anything goes, I just give everything to my accountant and he waves his magic wand and gets me money back. Even though I think I might not :)
 
Yea - I thought it one could deduct the actual bond payment on the 2nd place, as you're not making money.

Thanks though!
 
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