PUBLISHED 19 FEB 2010
Often encouraged by stories of very high
rentals, a surprisingly large number of South Africans are apparently
now willing to let out their homes over the World Cup period but, says
attorney Grant Gunston, they must be prepared to declare this income to
SARS.
“If they do not, they will not only have to live with the knowledge
that they have been dishonest, but risk having to face significant
penalties later on."
Letting out your primary residence for this momentous period in SA’s
history, Gunston says, could just conceivably lead SARS to query
whether your home is now being used as a business, and that, in turn,
could result in the first R1,5m profit when you sell the property -
which should be exempt from capital gains tax if the property is the
owner’s primary residence - being reassessed.
And even if this does not happen, those failing to declare a big rental
windfall during the World Cup could find SARS investigating their tax
accounts in some detail and possibly uncovering other revenues or perks
previously thought to be not worth paying attention to..
Gunston adds that the the growing number of granny flats or portions of
a primary residence being rented out do affect the home’s tax exemption
status. “Generally the floor area rented is measured and calculated as
a percentage of the whole property floor area, says 15 or 20%. This
percentage is then deducted from the R1,5m capital gains tax exemption
when the property is sold.”
Source: Property Trader
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