A rental deposit is fundamentally different from monthly rent. The landlord receives the money, but if there's an obligation to return it, the tax treatment differs from ordinary rental income — a distinction that becomes especially important if a deposit is later used to cover damage or amounts owed.
Source: SARS — Tax on Rental Income
Frequently Asked Questions
Is a refundable deposit the same as rent?
No — a refundable deposit is held as security subject to the terms and applicable law.
When can a deposit become income?
SARS says it may become gross income when it is eventually applied, depending on the circumstances.
Should landlords keep records of deposits?
Yes — accurate records help establish whether a deposit was refunded or applied.