SARS – All Rental Income to be Declared. SARS advises property owners to declare all short-term rental income on their tax returns and comply with VAT obligations if their short-term rental income exceeds R 1 Million within the tax year. Herewith the media release:
Tshwane, 11 March 2021 – The South African Revenue Service (SARS) wishes to advise property owners whose properties are located in South Africa and who host fee-paying guests that the rental income they receive must be declared in their income tax return.
This is the same principle that applies to any person who has rental income from letting out their property as a home-owner, placing them under the same obligation to declare such rental income to SARS.
A property owner is also required to register as a VAT vendor with the accompanying obligations if the short-term rental income exceeds R1-million in a 12 month period.
SARS is working hard to provide clarity and certainty for taxpayers to enable them to meet their obligations effortlessly. We also strive to make it easy for taxpayers who are willing to comply. Our approach has always been that every taxpayer should pay their fair share.
We are, however, equally determined to make it hard and costly for non-compliant taxpayers not willing to meet their obligations. We are working hard to improve system capabilities, to detect those taxpayers who do not comply by using data to identify risk.
Early evidence has highlighted the need to focus on improving compliance in this sector of property owners who derive income from fee-paying guests.
Property owners who, to date, have not declared rental income are encouraged to regularise their affairs with immediate effect. Affected Taxpayers may choose to use Voluntary Disclosure Programme (VDP) which offers more favourable terms. Failure to regularise your affairs, may place taxpayers at risk and should they be selected by SARS for an audit, the more stringent normal processes will apply.
The benefit of using the VDP is that it offers more favourable terms for an assessment in terms of the penalty amount.
Taxpayers are reminded that failure to comply with their tax obligations may result in administrative penalties being imposed in addition to interest, or even criminal action being taken against them.
The VDP unit at SARS can be accessed directly at VDP@sars.gov.za.SARS Media Release- ALL FORMS OF RENTAL INCOME MUST BE DECLARED TO SARS