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Are Bathroom Renovations Tax Deductible?

If you’re a home or business owner in Cape Town, it’s normal for you to want to take advantage of every possible tax deduction there is in the book. After all, taxes can take a huge chunk out of your money, too. This is why each time any property owner makes any renovations on an existing structure, it is normal for them to look for applicable tax deductions.

Among the most common renovations done in any structure are bathroom renovations. Especially for much older properties, the need to update not only the plumbing system and the fixtures, but possibly, the entire interior design as well will always arise.

Before starting a bathroom renovation you may be asking yourself; what kind of tax deductions could one have in case of bathroom renovations? Or are bathroom renovations tax deductible?
First, let’s review what kind of renovations can be considered as “tax deductible”.

Table of Contents

For Homeowners

If a homeowner starts accepting tenants into their home, then there are quite a few property tax deductions that they can claim. For example, any upgrades made on the rental unit, such as bathroom renovations, can be considered as deductible from their income, which makes it a possible tax deduction.

Other than that, there is no guarantee at all that bathroom renovations would be considered as tax deductible. However, there are property tax rebates that one could take advantage of. If the property is for personal use, you can take advantage of rebates, usually up to the amount of tax applicable to the first R88,000 in the property’s value. If the property is under the name of a disabled person or a senior citizen, additional rebates would also apply.

Other possible property tax deductions are depreciation in the property’s value, any losses from acts of God, and a lot more.

For Business Owners

If you are a business owner whose structure falls within an Urban Development Zone (UDZ), then there are a few deductions that you can claim as well. Here are some situations where a tax deduction can be claimed within the UDZ:

  • Any improvements applied to an entire building
  • Any improvements applied to a part of a building that is at least 1000sqm
  • Any improvements applied to low-cost housing
  • The purchase of a property directly from the developer
  • Seeing that bathroom renovations can be considered as improvements, there will definitely be instances where businesses can claim tax deductions if they are within the UDZ.

    Who should you talk to?

    Evidently, there are many scenarios where a bathroom renovation can be considered as a tax deduction. There are two people you can ask in case you need to find the answers you need:

    Your tax expert

    It could be your accountant, or it could be somebody else in your team who specializes in taxes. The moment you decide to do a bathroom renovation, consult with them right away and find out whether this can be filed as a tax deduction or not.

    Your trusted plumber

    If you have a trusted Cape Town plumber, more often than not, they will also be able to tell you whether a certain project can be tax deductible or not. Especially if your plumber has had extensive experience in the field, they would definitely be able to give you a few basic insights.

    Make sure you check on every possible deduction you can apply, especially when it comes to your business properties. The renovation alone does not come cheap after all, so might as well save a few extra bucks through applicable deductions on your tax.

    Get the Peace of Mind You Deserve

    Speak with one of our 24/7 on-call plumbers in Cape Town now.