Many South Africans who move abroad hold onto their property back home. Maybe you are renting out your house in Johannesburg while you work in London. Maybe you kept your Cape Town apartment as an investment. Whatever the reason, the rental income from that property is South African-source income, and SARS taxes it regardless of where you live.
This guide covers everything you need to know about owning a South African rental property abroad, including how to declare the income, what expenses you can deduct, and what happens to the property when you cease your tax residency.
Rental Income Is Always SA-Source
Income from immovable property located in South Africa is classified as SA-source income under the Income Tax Act. This means SARS taxes it whether you are a SA tax resident or a non-resident. Even after you cease your tax residency, you still need to declare and pay tax on your SA rental income. This is one of the few ongoing SA tax obligations that survives cessation of residency.
The rental income is taxed at your normal marginal rate. For non-residents, SARS applies the standard individual tax tables to your SA-source income (including rental income). There is no special flat rate for non-resident rental income in South Africa, unlike some other countries.
How to Declare Rental Income on the ITR12
On your ITR12 return, rental income is declared in the Local Rental Income section (not the foreign income section, because the property is in SA). You can complete this section through SARS eFiling. Declare the gross rental income and then deduct allowable expenses to arrive at your net rental profit (or loss).
The source code for local rental income is 4210. If you have rental expenses that exceed your rental income, the resulting loss can be offset against other SA-source income in the same year.
Deductible Expenses
You can deduct expenses that are directly related to earning the rental income. These include municipal rates and taxes, body corporate or homeowners’ association levies, property insurance, repairs and maintenance (not improvements), letting agent or property management fees, advertising costs for finding tenants, security costs, and garden service costs that form part of the rental agreement.
Bond interest was deductible until the 2022 year of assessment. From the 2023 year of assessment onwards, bond interest on residential rental properties is no longer deductible. This was a significant change that increased the effective tax on rental income for many property owners.
Improvements (additions, renovations that increase the property’s value or capacity) are not deductible as expenses. However, they increase your base cost for CGT purposes when you eventually sell the property.
Wear and Tear on Furnished Rentals
If you rent out your property furnished, you can claim wear and tear (depreciation) on the furniture, appliances, and fittings. SARS publishes a list of acceptable write-off periods for different asset types. Typical periods are 6 years for furniture, 5 years for appliances, and 6 years for carpets and curtains. The wear-and-tear allowance reduces your taxable rental profit each year until the asset is fully written down.
Non-Resident Withholding
There is currently no formal non-resident withholding tax on rental income in South Africa (unlike some countries that require tenants or agents to withhold tax at source for non-resident landlords). However, if you are a non-resident, SARS expects you to register as a provisional taxpayer and submit IRP6 returns with estimated tax payments on your rental income. See our provisional tax guide for the deadlines and process.
What Happens to Your Rental Property When You Cease Residency
When you cease your SA tax residency, your SA rental property is not subject to the deemed disposal (exit tax). This is because SA immovable property stays in the SA tax net as source income, so there is no need to trigger CGT on departure. SARS will continue to tax you on the rental income as a non-resident.
When you eventually sell the property, the capital gain is subject to SA CGT regardless of your residency status. The 40% inclusion rate applies for individuals, with the R40,000 annual exclusion. If the property was your primary residence for any period, the R2 million primary residence exclusion may apply to the portion of the gain attributable to that period.
Worked Example: Rental Income as a Non-Resident
Anele ceased her SA tax residency in 2023 and lives in London. She rents out her Sandton apartment for R18,000/month (R216,000/year). Her annual expenses are R72,000 (rates, levies, insurance, agent fees, repairs). Net rental profit: R144,000.
As a non-resident with only SA rental income, Anele’s taxable income is R144,000. After the primary rebate of R17,235, her SA tax is approximately R8,694. She submits two IRP6 provisional tax returns during the year and pays the estimated tax. She files her ITR12 annually to reconcile.
Managing Your SA Rental Property From Abroad
Use a letting agent. A reputable property management company handles tenant screening, rent collection, maintenance coordination, and compliance. The agent fees (typically 8-12% of monthly rent) are tax-deductible. This is especially important when you are in a different time zone and cannot respond to tenant issues quickly.
Keep meticulous records. SARS may request invoices, receipts, and proof of expenses at any time. Keep digital copies of everything, organised by tax year. Bank statements showing rental deposits and expense payments are your first line of defence in a query.
Consider the exchange rate impact. Your rental income is earned and taxed in rands. If you convert it to foreign currency for spending abroad, the exchange rate at conversion determines how much you actually receive. The SARS tax on the rental income is calculated in rands regardless of what you do with the money afterwards.
For the complete picture on your obligations, start with the complete guide to South African expat tax. For filing instructions, see our expat tax return guide.This guide is for information only and does not constitute tax advice.
Tax and exchange control laws change frequently. Always consult a qualified tax professional before making decisions about your South African tax obligations.