Who must keep records?
Every person who earns rental income in South Africa — whether from one room or fifty units — is required under the Tax Administration Act to keep records that enable SARS to verify the amounts declared on their tax return.
What records to keep
At a minimum, SARS expects you to have:
- Lease agreements for every tenant
- Bank statements showing rental deposits received
- Proof of expenses — invoices, receipts, and statements for rates, insurance, repairs, maintenance, agent commissions, and any other deductible cost
- Loan statements showing bond interest paid (interest is deductible; capital repayment is not)
- Purchase and sale agreements if you bought or sold a property during the tax year
- Improvement records — invoices for renovations and upgrades, which affect your base cost for CGT purposes
How long to keep them
The general rule: five years from the date you submitted the relevant tax return. If you did not submit a return for a particular year, SARS can go back indefinitely — which makes it even more important to file on time and keep your records safe.
Digital vs paper
SARS accepts electronic records provided they are:
- Accessible and readable
- Complete and unaltered (or clearly marked where corrections were made)
- Backed up securely
Cloud-based accounting software meets all three requirements and removes the risk of fire, water damage, or simply losing the shoebox under the bed.
Penalties for poor record-keeping
If SARS requests supporting documents and you cannot produce them, the deductions you claimed may be disallowed — increasing your tax liability plus interest. In serious cases, a fixed penalty of up to R16 000 per month can be imposed under the Tax Administration Act.
This article is general guidance, not professional tax advice. Consult a registered tax practitioner for your specific circumstances.
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