Tax implications after buying property

[The_Mowgs]

Morning guys,

I bought a house last year, which is my primary residence. I received a letter from the bank last month indicating how much I have paid and how much interest I have paid for the last financial year. It stated on the letter that I needed to keep it for tax purposes.

Now I would like to know what impact this will have when I do my taxes later this year as this is the first property I bought.

Thanks

 

[deweyzeph]

Morning guys,

I bought a house last year, which is my primary residence. I received a letter from the bank last month indicating how much I have paid and how much interest I have paid for the last financial year. It stated on the letter that I needed to keep it for tax purposes.

Now I would like to know what impact this will have when I do my taxes later this year as this is the first property I bought.

Thanks

The 2 main things I can think of are:

1) Capital Gains Tax - when you sell your property one day you will need an official record of how much you originally paid for it so that any capital gains tax due can be calculated

2) Rental Income - if you decide to rent your house out you will be able to claim back your interest payments as a deductible expense once you start renting it out. Of course you will also have to declare the rental income you receive too.

 

[MDE]

A third is if you use your property as a private home business you can claim back tax on the interest paid to the bank.

 

[AlmightyBender]

If you are not using the home for any business activities then it will have zero impact on your tax assessment. But keep the statements safe regardless.

 

[Sinbad]

There's no CGT on primary residence is there?

 

[Sensorei]

There's no CGT on primary residence is there?

Nope

 

[visrot]

The 2 main things I can think of are:

1) Capital Gains Tax - when you sell your property one day you will need an official record of how much you originally paid for it so that any capital gains tax due can be calculated

2) Rental Income - if you decide to rent your house out you will be able to claim back your interest payments as a deductible expense once you start renting it out. Of course you will also have to declare the rental income you receive too.

3) From MDE: if you use your property as a private home business you can claim back tax on the interest paid to the bank.

Your best answer. Keep these on file for future possible use

 

[visrot]

There's no CGT on primary residence is there?

There is when you sell the property and make profit

 

[The_Mowgs]

Ok thanks guys, appreciate the help.

 

[Sinbad]

There is when you sell the property and make profit

Not on your primary residence.

 

[Just_Ice]

There's no CGT on primary residence is there?

Nope

Not on the first R2 million gain there isnt. Above that, normal CGT applies.

 

[Legosa]

CGT on primary residence if the net gain is above R2.5mil (which is going to take several years to achieve) and then only on the amount exceeding R2.5mil.

 

[Jozsef Borbely]

CGT on primary residence if the net gain is above R2.5mil (which is going to take several years to achieve) and then only on the amount exceeding R2.5mil.

Sorry but it is R2 million.

Proof: SARS pdf guide

Middle of page 6

 

[Legosa]

What's half a mil between friends (SARS)

Don't think SARS will like me to much if I run away with it.

 

[Jozsef Borbely]

What's half a mil between friends (SARS)

Don't think SARS will like me to much if I run away with it.

They send the sheriff to break your financial knee-caps.