Rental Income Tax on a Jointly Owned Property in South Africa

If you own a rental property with someone else, you each declare your own share of the rental income and expenses, in proportion to how much of the property you own, and each of you is taxed on that share at your own marginal rate. There is one important exception. Spouses married in community of property do not split by title deed; because the property falls into the joint estate, SARS divides the rental profit or loss 50:50 between them, whoever the registered owner is.

So there is no single "rental tax" on the property. The profit is cut up by ownership share, and each owner carries their slice into their own return.

How co-owners split the income and expenses

Each co-owner is taxed only on the income that accrues to them. If you hold a 60% undivided share, 60% of the gross rent is your income and you claim 60% of each running expense against it. Your co-owner does the same with their 40%. You do not lump the whole property onto one return.

The deductible running costs, apportioned to your share and to the part of the property actually let, include:

• rates and taxes
• bond interest on the loan used to buy the property
• levies on a sectional-title unit
• homeowner's insurance on the building
• the letting agent's commission
• advertising to find a tenant
• repairs to the let area (not improvements, which are capital)

On your return the net rental profit goes under source code 4210, and a net rental loss under code 4211. Which costs count as deductible repairs and which are capital improvements that do not is set out in repairs versus improvements on a rental property.

The different rule for spouses in community of property

Marriage in community of property creates a single joint estate that both spouses own equally. SARS treats income from that estate accordingly. In its own words, income received by or accruing to a spouse, other than income from carrying on a trade but including investment income, "is deemed to accrue to the spouses in equal portions", and that expressly covers "rental from the letting of fixed property that forms part of the communal estate".

In practice you declare the full rental figure after expenses, and SARS apportions the profit or loss 50:50 for you. You do not each enter half. If you are married out of community of property, this pooling does not apply; you are treated as ordinary co-owners according to your registered shares, or, if only one spouse owns the property, that spouse declares all of it.

Splitting a real rental profit

Two friends buy a flat together, one holding 60% and the other 40%. In the 2026 tax year the flat earns R120,000 in rent and incurs R40,000 of deductible costs, a net profit of R80,000.

The 60% owner declares R48,000 (60% of R80,000). The 40% owner declares R32,000. Each amount is added to that person's other taxable income and taxed at their own marginal rate, so if the 60% owner sits in the 31% bracket their tax on the rental share is about R14,880, while the 40% owner in the 26% bracket pays about R8,320 on theirs.

Now compare a couple married in community of property who own the same flat. The R80,000 profit is split straight down the middle: R40,000 to each spouse, taxed at each spouse's marginal rate. The rental income guide and the rental tax calculator work the profit before you divide it.

What happens with a rental loss

A loss is split the same way as a profit. Each owner sets their share of the loss against their other income, such as salary, which reduces their tax. Watch the ring-fencing rule in section 20A, though: for the 2026 tax year it can ring-fence a rental loss (so it cannot be set off against your salary) only once your taxable income reaches the top bracket, which starts at R1,817,001. Below that, a normal rental loss is deductible against your other income.