Loading...

Can I claim interest on second property?

Feb 24 2016 07:59

Cape Town - A Fin24 user who has bought a second property to rent with the aid of an access bond and a loan from a different bank wants to know if he can claim interest on the full amount.

He writes:"I recently bought a second property which I am renting out. I have borrowed the 60% deposit for the rental unit from my access bond of my first (residential) property.

"The remaining 40% of the bond for the rental property is with another bank. Can I claim the interest amount on the full purchase price (since I borrowed it from my access bond) or just the interest portion on the 40% bond?"

Piet Nel of the SA Institute of Tax Professionals responds:

From the information provided we take it that the full purchase price was funded (albeit by two different institutions).  It is also evident that the intention was to derive rental income. 

It therefore meets the requirements of section 24J(2) and can be deducted against the rental income. 

As the original (or the access bond) was not taken out with an intention to trade you will have to prove, if SARS so request, that the draw-down now as utilised to acquire the second property. 

* Have a question? Send it to us and we will find an expert to answer.

ALSO SEE previous tax questions from users:

Can interns claim for travel expenses?

Home care and medical rebates

What to do when tax docs burn

Expat receiving pension from SA: Do I pay tax?

What are the limits on claiming travel expenses?

Can I claim for using my own car for work?

Temp teaching for 6 months, must she pay tax?

Working in Saudi, do I also pay tax in SA?

Can I claim for travel expenses?

Tax filing: No financial records yet, what now?

Filing returns for an education trust

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

sait  |  tax filing season 2015  |  money clinic  |  tax
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.
 

Company Snapshot

#SAVINGSMONTH

Five of SA's top financial brains, including SARB governor Lesetja Kganyago share their best savings habits.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Are you prepared for the latest round of Eskom’s load shedding??

Previous results · Suggest a vote

Loading...