claiming rental expenses against bond (residential)

By Marc Sevitz · Updated 15 October 2014

Hello Tim,I came across this and would like some advice on whether or not it means I shouldn't claim rental expenses for the space I use for office purposes in my home. I'm still paying the bond towards the property and use one of the rooms as an office. (beware, if you own your home, do not write off a portion of your interest on your bond or rates, as you will lose your primary residence capital gains exemption of R2-million! When you sell your property one day, this would equate to an additional tax payment of up to R266,000 should you have claimed business expenses against your primary residence.)Thanks

TaxTim Marc said:
16 October 2014 at 17:59

Where did you see this information?

Pupe said:
16 October 2014 at 19:58

On some internet site, don't recall the link

Pupe said:
16 October 2014 at 20:03

Got the link
http://www.mweb.co.za/Entrepreneur/ViewArticle/tabid/3162/Article/9212/10-tax-savings-tips-for-small-businesses.aspx

TaxTim Marc said:
17 October 2014 at 9:54

The article is partially true, but the figures are dependent on the situation. So if you sell your primary residence for R5m and make a gain of R2m of which 90% of your property was used for living and the 10% used for work. Then you would say (R2m x 90%) less the R2m exclusion would mean no capital gain. The 10% used for work however being R200 000 gain would be subject to full capital gains tax.

Pupe said:
20 October 2014 at 16:26

Thanks Tim

TaxTim Marc said:
20 October 2014 at 19:57

Only a pleasure!