Renting out all or part of your home? What to include in your tax return

Have you been renting out your home? Or just letting a friend crash in your spare room? Whether you’ve been renting out your entire home, just a room, or a granny flat, you’ve likely earned assessable income. Here’s what you need to know before lodging your tax return!

Do I need to declare board I receive from friends or family?

Do you have family members or friends who live with you and pay ‘board and lodging’ to cover the cost of their meals and accommodation? If so, this would be considered a domestic arrangement. This means you don’t need to declare the rent on your tax return and can’t claim expenses.

For more info about domestic arrangements this opens in a new window , see our website.

Do I have to declare my rental income?

Yes. Even if you rent out just one room or rent through an app like Airbnb, you’ll need to declare the rent as income.

Rental income is a little more than just rent. It includes things like:

• bond money or booking cancellation fees you keep

• insurance payouts (for loss of rent for example).

Check our website for details on Rental income you must declare this opens in a new window .

How do I add my rental property to my return?

If you’re lodging via myTax this opens in a new window , you’ll need to let us know you have a rental income to declare. You can do this by first selecting: You had Australian interest, or other Australian income or losses from investments or property. If your property is overseas, you’ll choose Other foreign income.

Once you fill out your rental property details (including rental income) you can move to the next step.

How do I claim tax deductions for my rental property?

You can start claiming your deductions in the Rental expenses section.

So long as your property was rented out or genuinely available for rent, you can claim an immediate deduction for things like:

• the cost of advertising for tenants

• council rates, land tax and water charges

• repairs and maintenance costs; like fixing a broken window or lawn mowing.

If you’ve bought an asset for your rental property, you can claim an immediate deduction if the asset cost $300 or less.

Sometimes your deduction needs to be claimed over a number of years. Let’s say you buy a new oven (or other new depreciating asset for your rental property). You can claim a decline in value deduction over the asset’s effective life.

You can only claim a portion of your expenses if:

• your property wasn’t rented or genuinely available for rent for the entire income year

• you rented part of your property.

Example: Your property had a floor area of 100m2, and you’ve rented a room (along with equal access to the common areas) which had a floor area of 40m2. You can claim 40% (40m2 ÷ 100m2) of your deductible expenses.

Joint ownership

If you own the property with more than one person, you’ll divide the income and expenses based on the percentage of ownership.

Example: A husband and wife each own 50% of their property. They’ll declare 50% of the income and claim 50% of the expenses each.

Head to our website for more details on Rental expenses you can claim now this opens in a new window .

When it comes to borrowing expenses and capital works, you’ll need to claim a deduction over several years this opens in a new window .

I sold my rental property – do I declare capital gains tax (CGT) on my tax return?

If you sold your rental property during the income year, you may have made a capital gain or loss. You’ll need to enter your capital gain or loss in your tax return.

Check our website for details on CGT when selling your rental property this opens in a new window .

For more tips to help avoid common tax mistakes this opens in a new window  when lodging your return, see our website.