Working from home can save you tax

Working from home is becoming increasingly popular, largely due to the increasing ease of connectivity. While there are many pros and cons that could be argued about making one’s home double up as an office, the tax implications of this decision should also be considered.

The process to approval for extending a Sectional Title Unit

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.

Follow Snymans on Facebook for more legal advice, information and news about property.

Recommended for you

Minors and immovable property
Legislative Guidelines

The advantages of a life right[post_view before=""]

The Housing Development Schemes for Retired Persons Act 65 of 1988 introduced life rights as a formal form of ownership for retired people in South Africa. This legislation was implemented not only in response to the growth in the retirement village sector but also to provide legal protection to the elderly.

Read More
My name has changed - what happens to my property’s title deed?
Legislative Guidelines

Muslim marriages: A welcome Constitutional Court decision[post_view before=""]

In a long-awaited and groundbreaking decision in the area of family law, the Constitutional Court of South Africa (CC) confirmed the order of constitutional invalidity of the below mentioned Acts, granted by the Supreme Court of Appeal. This decision was confirmed on 28 June 2022.

Read More
Minors and immovable property
Legislative Guidelines

Selling a property without approved building plans[post_view before=""]

It’s often the case that a seller would like to sell – and a purchaser would like to buy – a property without approved building plans or an occupation certificate. But what does the law say?  In terms of the…

Read More
My name has changed - what happens to my property’s title deed?
Legislative Guidelines

The Divorce Act and marriage out of community of property without accrual[post_view before=""]

In this article, we explore the issue of the constitutional validity of section 7(3)(1) of the Divorce Act in respect of marriages entered into after 1 November 1984 and excluding the accrual system.

Read More
Amendments to the Financial Intelligence Centre Act (FICA)
Legislative Guidelines

The Money Laundering and Terrorist Financing Report 2022[post_view before=""]

In March 2022, the Financial Intelligence Center (FIC) published a report dealing with the assessment of the inherent money laundering and terrorist financing (MLTF) risks for legal practitioners.

Read More

Need more Snymans content?

Sign up for our monthly newsletter.

Working from home can save you tax

Working from home is becoming increasingly popular, largely due to the increasing ease of connectivity. While there are many pros and cons that could be argued about making one’s home double up as an office, the tax implications of this decision should also be considered.

The process to approval for extending a Sectional Title Unit

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.

Follow Snymans on Facebook for more legal advice, information and news about property.