South African’s (living in SA) are taxed on all their income generated worldwide subject to certain exclusions and deductibles - residency based system.

Expenses incurred in the production of income are deductible. https://twitter.com/girlontheavi/status/1303448953158012928

Rent earned from an investment property is considered income which will be added to your salary - pushing you into a higher tax bracket = higher taxes.

However some the costs incurred in generating rental income can be deducted when calculating your taxable income - effectively reducing your tax rate.

Deductible costs include:
- rates & taxes
- bond interest
- advertising
- management fees
- home owners insurance (building, not contents)
- garden services
- levies
- security
- repairs & maintenance

Note: Improvement costs (ie renovations) are not the same as maintenance costs. These will be added to the capital base cost of the property and will reduce the capital gain/loss when the property is sold.

Another reason why it’s important to keep proper records the income/expenditure related to your investment property.

By ‘paying off’ an investment property. You loose out on the deduction of the interest component which can be significant and ultimately end up paying a higher tax rate.

What happens of the expenses exceed the income? Yipi you have an assessed loss which you can set off against other income and pay a reduced tax rate.

@Nonku4