{"id":879023,"date":"2026-10-18T16:00:00","date_gmt":"2026-10-18T14:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=879023"},"modified":"2026-10-16T15:51:20","modified_gmt":"2026-10-16T13:51:20","slug":"a-south-african-woman-turned-her-social-grant-money-into-a-business-that-pays-her-r18000-a-month-tax-free","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/879023\/a-south-african-woman-turned-her-social-grant-money-into-a-business-that-pays-her-r18000-a-month-tax-free\/","title":{"rendered":"A South African woman turned her social\u00a0grant money into a business that pays her R18,000 a month tax-free"},"content":{"rendered":"\n

A woman in Khayelitsha turned her monthly social grant into a property business that makes her R18,000 a month in rental income, and she pays zero tax.<\/p>\n\n\n\n

Her story was shared by informal economy expert GG Alcock, who used it as an example of how South Africa’s largely overlooked backroom rental market operates.<\/p>\n\n\n\n

\u201cI wrote in my book, Kasinomics, about a lady who rents out these backrooms after a decade of saving,\u201d Alcock said.<\/p>\n\n\n\n

\u201cShe took her social grant, every month for ten years, and she laid by building materials for six rental units.\u201d<\/p>\n\n\n\n

The woman used roughly half of her grant each month to put building materials on lay-by. Over time, she accumulated enough materials to construct six rooms, which she now rents out for R3,000 each.<\/p>\n\n\n\n

That gives her gross rental income of R18,000 a month. Alcock said the story illustrated how people operating outside the formal economy can use small and consistent amounts of money to build assets and businesses over many years.<\/p>\n\n\n\n

He said social grants can also effectively become a source of financing for informal entrepreneurs, many of whom are not formally employed and therefore qualify for state assistance.<\/p>\n\n\n\n

\u201cThey then use that money to save or invest steadily to build a home, a business, and often both in the informal economy,\u201d he said.<\/p>\n\n\n\n

The Khayelitsha landlord is part of a much larger informal economy that includes spaza shop owners, bakers, goat breeders, mattress makers, coffee sellers and vetkoek traders.<\/p>\n\n\n\n

Alcock estimated that the backroom rental economy alone is worth about R30 billion a year.<\/p>\n\n\n\n

However, he added that it receives little attention from the government and formal businesses because there is limited information about how the market operates.<\/p>\n\n\n\n

Unlike the formal property market, where rental businesses are generally easy to identify and finance, backroom rentals are often cash-based and operate at the household level.<\/p>\n\n\n\n

Alcock said formal businesses have been more successful at understanding other parts of the informal economy.<\/p>\n\n\n\n

Government is catching on <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Companies such as Tiger Brands, Premier Foods, and Unilever can serve informal traders through wholesalers and distributors because the informal retail market resembles its formal counterpart.<\/p>\n\n\n\n

The same is harder to do with backroom rentals, which are often viewed individually as someone simply renting out a spare room.<\/p>\n\n\n\n

The scale of informal economic activity also complicates the way South Africa measures employment and income.<\/p>\n\n\n\n

Alcock said Capitec’s data showed that the average social grant recipient earned five times their grant amount through other income, including side businesses and other work.<\/p>\n\n\n\n

Stats SA data cited in research shows that only 23% of social grant recipients regard the grant as their only or main source of income, while 77% regard it as a secondary income stream.<\/p>\n\n\n\n

Former Capitec CEO Gerrie Fourie previously said this creates difficulties when measuring unemployment because grant recipients who earn money informally may still describe themselves as unemployed.<\/p>\n\n\n\n

\u201cIf you ask someone who gets a social grant if they are employed or unemployed, they will never say employed,\u201d Fourie said.<\/p>\n\n\n\n

The wider informal economy is estimated at about R900 billion and accounts for roughly 12.3% of gross national product and 19.5% of total employment, based on Stats SA data cited in research.<\/p>\n\n\n\n

Standard Bank research has also found that almost 80% of township businesses surveyed were unregistered, with annual turnovers ranging from R100,000 to R50 million.<\/p>\n\n\n\n

However, because of this, the government is increasingly looking at the sector as a potential source of tax revenue.<\/p>\n\n\n\n

Finance Minister Enoch Godongwana said SARS is developing an Informal Economy Response Strategy to help unregistered businesses formalise, understand their tax obligations and submit returns.<\/p>\n\n\n\n

Since the 2024\/25 financial year, SARS data triggers have resulted in 21,890 previously unregistered informal-economy taxpayers being registered, generating R314 million in additional revenue.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

A woman in Khayelitsha turned her monthly social grant into a property business that makes her R18,000 a month in rental income, and she pays zero tax.<\/p>\n","protected":false},"author":92,"featured_media":879419,"comment_status":"open","ping_status":"","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2111819853401034905","_sma_facebook_post_id":"191437357620492_2241250020028730","_sma_instagram_post_id":"18131897509747217","_sma_x_attempts":1,"footnotes":""},"categories":[9872],"tags":[19019,22350,853],"class_list":["post-879023","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-gg-alcock","tag-kasinomics","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/879023","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=879023"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/879023\/revisions"}],"predecessor-version":[{"id":879421,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/879023\/revisions\/879421"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/879419"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=879023"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=879023"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=879023"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}