Does bond registration costs qualify as deduction under section 11(a) or any other section of the Income tax Act, for Property letting companies?
Author: Peter Surtees
Important:
This answer is based on tax law year ending 28 February 2021.
Answer:
Bond registration costs are incurred in order to acquire the property, a capital asset to be used to generate income in the form of rental. Therefore they are a capital expense and not deductible under section 11(a) of the Income Tax Act. In addition, in terms of paragraph 20(2)(a) of the Eighth Schedule to the Act, bond registration costs may not be included in base cost.