When Your Property Becomes a Business - Tax & Legal Tips for Airbnb and Rentals

The rise of the sharing economy has transformed ordinary homes into revenue-generating assets. Platforms like Airbnb have created millions of listings worldwide, and in South Africa the demand continues to grow. With many homeowners seeking additional income, short-term rentals have become an attractive option for both casual hosts and serious investors.

But turning your property into a business requires more than just creating a listing. Success depends on proper planning, legal compliance, tax awareness, and sound investment strategy. At PropWiz, we guide clients across Potchefstroom and Pretoria through the full rental journey - from buying the right property to ensuring compliance and maximising returns.

Market Opportunity & Local Trends

Potchefstroom - A Student Town with Investor Appeal

Potchefstroom’s rental market is fuelled by North-West University, which attracts more than 50,000 students annually. This creates consistent demand for affordable student housing and buy-to-let opportunities. Investors can secure one-bedroom apartments close to NWU at accessible price points, making Potchefstroom one of South Africa’s best entry markets for first-time landlords.

Pretoria & Gauteng - A Rental Powerhouse

Pretoria and the wider Gauteng region are benefiting from reverse semigration, as professionals return inland for affordability and economic opportunities. Rental prices here remain lower than coastal provinces, but demand is strong across Pretoria East, Centurion, and North Pretoria. With over a third of households renting, Gauteng offers scale, diversity, and resilience for investors seeking long-term growth.

National Property Trends

• Falling interest rates – bond repayments are becoming more affordable.

• Semigration and lifestyle shifts – smaller towns and lifestyle estates are in demand.

• Steady property price growth – stability returns to the market after years of pressure.

• First-time buyers rising – co-ownership and entry-level investments are becoming more popular.

The Legal Landscape for Short-Term Rentals

No National Short-Term Rental Law

South Africa does not yet have a single law covering Airbnb or short-term rentals. Instead, property owners must comply with the Rental Housing Act, municipal by-laws, and sectional title rules where applicable. Some municipalities impose restrictions on the length of stays or require formal registration.

Zoning & Body Corporate Rules

Before advertising a rental, confirm that your property’s zoning allows it. Sectional title schemes or homeowners’ associations may also set rules around short-term letting, which must be respected to avoid fines or disputes.

Lease Agreements, Deposits & Habitability

Even for short-term rentals, written lease agreements are best practice. Deposits must be handled properly and accommodation must be safe, habitable, and compliant with municipal requirements.

Insurance Considerations

Standard homeowner’s insurance does not always cover short-term rentals. Airbnb’s AirCover provides some protection, but owners should review their policies to ensure they’re covered for commercial use and tenant-related claims.

Tax & SARS Compliance

Rental Income

All rental income is taxable in South Africa. Airbnb earnings, traditional rentals, or sub-lets must be declared to SARS as part of your annual return.

VAT

If your rental income exceeds R1million in a 12-month period, you must register for VAT (currently 15%). Proper record-keeping is essential, even if you stay under the threshold.

Deductible Expenses

Landlords may deduct legitimate expenses such as:

• Repairs and maintenance

• Bond interest

• Municipal rates

• Agent commission and advertising

• Insurance premiums

• Security and furnishing depreciation

These deductions can significantly reduce taxable income.

Smart Tax Planning

Depending on your goals, it may be beneficial to structure investments through a company or trust. Casual hosts renting out a spare room may keep things simple, but investors with multiple properties often gain from strategic tax structuring.

The Value of Professional Management

Managing a rental involves far more than collecting rent. A professional managing agent can handle:

• Financials – budgets, levies, and reporting

• Administration – meetings and record-keeping

• Compliance – ensuring adherence to housing, tax, and community laws

• Maintenance – organising repairs and service providers

• Conflict resolution – mediating disputes and enforcing rules

For landlords who prefer a passive investment, outsourcing to a managing agent is the difference between running a side business and enjoying stress-free returns.

Investment Strategies & PropWiz Developments

Maximise Location & Demand

Strong demand exists in student hubs like Potchefstroom, while Pretoria East and Centurion remain highly sought-after by professionals and families. Properties close to universities, hospitals, and transport routes consistently deliver high occupancy.

Invest in New Developments

Off-plan developments often combine affordability with modern design and energy-efficient features. PropWiz currently offers:

• Esperanza, Potchefstroom – Spacious two-bedroom apartments near NWU, MediClinic, and the SA Army base. Perfect for students, young professionals, and families.

• Chantelle, Pretoria North – Affordable two- and three-bedroom homes designed for first-time buyers and investors seeking steady rental yields.

Both developments provide excellent entry points into the rental market and reflect growing demand for affordable, well-located housing in South Africa.

Manage Risk & Plan Your Exit

Diversification is key. Spread investments across regions and property types, maintain an emergency fund for vacancies or repairs, and decide whether your goal is cash flow, capital growth, or both.

In short

The short-term rental and Airbnb market in South Africa is maturing quickly. While legal and tax compliance may feel complex, the opportunities are significant - especially in high-demand regions like Potchefstroom and Pretoria. With falling interest rates, growing tenant demand, and innovative new developments, 2025 is a strong year for property investors.

At PropWiz, we help homeowners and investors turn properties into thriving businesses. From tax-compliant rental strategies to full-service property management, our team ensures your investment is handled with care, transparency, and expertise.

?? Contact our Potchefstroom or Pretoria office to explore your next property opportunity.