Results 1 to 4 of 4

Thread: Renting out section of house and equipment to the company that employs me.

  1. #1
    New Member
    Join Date
    Feb 2017
    Location
    Centurion
    Posts
    2
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Renting out section of house and equipment to the company that employs me.

    Hi I am thinking of renting out a section of my house and supplying all the necessary equipment needed in order to run the business. This is for the company that employs me.

    I was wondering what is the best way to structure such an endeavor, the extra income will send me into a new income tax bracket.

    Will it be better to register a private company PTY LTD and work through that if that is even possible for a one man show. Or would it be better to leave it as a sole proprietorship and deal with the extra income through my own name?

    Thank you for any advice!

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    21,306
    Thanks
    3,090
    Thanked 2,488 Times in 2,092 Posts
    Blog Entries
    12
    Quote Originally Posted by qorsmond View Post
    I was wondering what is the best way to structure such an endeavor, the extra income will send me into a new income tax bracket.
    Just remember you're going to be able to claim a portion of related expenses against that income.

    If you own the property, running the rent through a private company means that company is going to be renting from you and subletting to the company that employs you - you'll still have some income taxed in your hands regardless.
    Last edited by Dave A; 24-Feb-17 at 12:56 PM.
    The trouble with opportunity is it normally comes dressed up as work.

    Alcocks Electrical Services | Alcocks Pest Control & Entomological Services

  3. #3
    New Member
    Join Date
    Feb 2017
    Location
    Centurion
    Posts
    2
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Thank you Dave! I did not think about that makes perfect sense.

  4. #4
    Full Member EAB's Avatar
    Join Date
    Jun 2016
    Location
    Roodepoort
    Posts
    79
    Thanks
    0
    Thanked 13 Times in 12 Posts
    Just keep in mind the CGT implications.

    When you sell your primary residence you will get a primary residence exclusion from CGT. You are now earning income on a portion of the house and thus that portion does not fall under the primary residence exclusion.

    So when you sell the property you will have to calculate what part of the property was used for generating income and what part was your primary residence portion. Your primary residence portion will qualify for the primary residence exclusion, but the business portion will not

Similar Threads

  1. deposit money after renting a house
    By saresa in forum General Business Forum
    Replies: 8
    Last Post: 27-Jun-13, 12:50 PM
  2. Section 21 Company
    By viper357 in forum General Business Forum
    Replies: 4
    Last Post: 26-Mar-12, 02:10 PM
  3. [Question] Starting an office equipment leasing company
    By Amartin in forum General Business Forum
    Replies: 4
    Last Post: 13-Sep-10, 11:31 PM
  4. [Question] Starting an office equipment leasing company
    By Amartin in forum General Business Forum
    Replies: 0
    Last Post: 26-May-10, 07:38 PM
  5. [Question] NPO or Section 21 company
    By AnnekeL in forum General Business Forum
    Replies: 4
    Last Post: 13-Oct-09, 05:23 PM

Tags for this Thread

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •