SARS vs DYI at rental property

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Tacet

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If you rent out a property, that property needs maintenance. Now you have two basic options - either you do it yourself, or you get a contractor/handyman to do it.

If you hire someone to do it, you can claim back the expenses, including the labour, from SARS. Now my question is, if I do it myself, can I claim anything back as far as labour is concerned? I can't see how I can, as I'm not exactly billing myself for the labour done. Is there anything weird and wonderful in the SARS regulation that I'm missing here? Or should I keep on dreaming? :o
 
Um - well you could claim back the expenses but you should also be declaring the income. Think about it - if you paid a contractor R1000 you could claim that as an expense but the contractor would be decalring the R1000 as income. So you could claim the expense but just be sure to add it on to your income.

Seems daft but that's the idea behind it all.

You can do it yourself and claim all the material expenses.
 
Mmm, your argument makes sense. I already claim the material expenses - just wondered if there's anything on labour. Tax normally works as expected, but it is so easy to miss some small, vital thing...
 
Tacet said:
Mmm, your argument makes sense. I already claim the material expenses - just wondered if there's anything on labour. Tax normally works as expected, but it is so easy to miss some small, vital thing...
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You would think so in that you must have spent money to buy food to give you energy to do work. The tax man doesn't see it that way But if you set up a canteen and provided meals you could. But then it might be a perk.

Maybe if there was someway that you could get invoices from a casual labourer that you could use to substantiate a claim...... Even that has problems because strictly speaking you should be retaining tax unless you have a directive. It gets messy. And rightly so, there shouldn't be loopholes.

It probably boils down to finding a number that won't get the tax person suspicious but I'd hate to be pushing you into tax fraud rather than tax minimisation
 
The answer to your question is a simple. NO
Its simple because if you pay yourself for labour its both an Expense and an Income to you! You paid yourself R5000 to lay some tiles.
You gave yourself an Invoice and proceeded to pay yourself like a crazy person.
R5000 - R5000 = R0
 
Pay someone in your family below minimum tax paying wage to do it :p
 
Vegeta said:
You gave yourself an Invoice and proceeded to pay yourself like a crazy person.
R5000 - R5000 = R0
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Refuse to pay and then charge administration fee to collect this outstanding amount :D
 
Albereth said:
tax fraud rather than tax minimisation
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And that, for me, is key here. It is so easy to miss a rule that I won't be surprised if I've broken rules before. I.e. buying a stove: if you buy it because the previous one is broken and uneconomical to repair, it is a tax deductible expense, while if you buy it to upgrade, it is an increase of capital on the property. That is, if I understand it correctly. So generally I try to rather find out exactly how something work, and where unsure, give SARS benefit of the doubt.

But ai, it would have been nice if I could claim my DIY time at the rental place back as labour expense. :(
 
That will depend on your business structures, expenses and personal income. .... If your rental is part of a company - then that company can pay your "maintenance" company, you in turn can charge your maintenance company.... Now if it be worth it? That depends each of these business' tax situations, obviously you would like to have the money in the business(es) that is showing a tax loss.... do not forget things like turnover taxes/levies in the process.

Then there is still the calculations as to what makes best sense tax wise is it better to repair or buy new....
 
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You have the general idea of tax going as you do with banking but you are not answering the case in question no offense

You will be very hard pressed to claim those expenses back if you did the work yourself for a very good reason. There is not way that SARS can prove that you did not grossly mismanage the repair/maintenance to benefit yourself in this regard. It is important to note that when you have someone else do the repair,and a question of the deduction comes in from SARS and you offer the invoice,you are not on the chooping blocks,but the repairman is.Why because you legitamately claimed from a 'so called professional' and had no motivation to increase your expense deduction

You can do it yourself,but I warn you that if the costs go up more than the average,you make a mistake and it costs you more,or you bill for labour in that you take twice as long and the amount is grossly exggerated,you are in for a call from SARS

My suggestion,phone a construction company,ask for a decent repairman specific to your problem,ask for there practice number and certification saying they are a registered painter/electrician etc(there are properly registered guys) and use this person if the work is good GOOD LUCK :)

Albereth said:
Um - well you could claim back the expenses but you should also be declaring the income. Think about it - if you paid a contractor R1000 you could claim that as an expense but the contractor would be decalring the R1000 as income. So you could claim the expense but just be sure to add it on to your income.

Seems daft but that's the idea behind it all.

You can do it yourself and claim all the material expenses.
Click to expand...
 
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