When it comes to tax, there are many expenses that are considered tax deductible if they are related to the running and operation of one’s business. This is because the calculation of tax due includes consideration of the turnover of a business, as well as the total income or profit of a business.
By using your property as an office space, the amount that could be considered rental payment for an office would be seen as a business expense and therefore tax deductible. Of course, it’s not quite that simple when the property is used both as an office and a home because the costs associated with the portion used purely as a home cannot be considered tax deductible.
The result is that one has to calculate the portion or percentage of the property used for work and therefore the percentage of the bond repayments associated with the office space. This monthly expense can then be included as business operational costs, adding to the annual tax deductible expenses.
While this is a broad overview of how this works, in practice there may be many nuances that will need to be considered. As such, consulting with an experienced tax professional is advisable to ensure the calculations, and therefore one’s annual tax return, are completed correctly.
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