Taxman eyes 2010 profit

2009-12-19 00:00

PRETORIA — People wanting to profit from the World Cup soccer tournament by letting their property to foreigners need to think carefully.

The South African Revenue Ser­vice (SARS) could claim up to 40% of such windfalls. That’s not to mention the additional costs of insurance or provision for personal liability cover.

According to David Warneke, a tax partner at Cameron & Prentice in Cape Town, one rental agency is insisting on R50 million worth of personal liability insurance before properties can be let.

He points out that if a foreign visitor should slip on your tiles and hurt himself, claims could start with hospital costs and go on to include psychological treatment.

The rental income has to be declared to SARS. People being taxed at a marginal rate of 40% on their gross income will have to do their own calculations as to whether the additional risks make it worthwhile.

There is little comfort in knowing that all expenses incurred in earning this income are tax-deductible.

Such expenses include commission payable to rental agents, interest on the bond, electricity, water and services fees or levies payable over the period of the lease. According to Warneke, even cleaning ser­vice expenses can be included.

A Pretoria short-term insurer says it has not yet received many inqui­ries about 2010. But some insurers have recognised this gap in the market and are offering additional cover, including “comprehensive insu­rance on household contents” and “stand-alone liability cover”. It is being categorised as one-off cover for 2010 and is added to owners’ or existing policies.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. 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
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.