My partner and I live in different states due to work reasons. We own a home in state A which he lives in as his primary residence and I rent a property in state B.
He is able to purchase an investment property in state B as sole owner/investor (I am unable to contribute). Is he allowed to rent the property out to me at market value and subsequently claim all relevant deductions for property related expenses such as interest, maintenance, etc...
Hi @renting_interst,
By paying rent at market value to your partner, it could be viewed as an 'at arm's length' arrangement. Under this, he may be able to claim deductions for expenses associated with owning an investment property, and would also need to declare any rental income he receives for it. If you were to pay less than market value, then it would likely fall under a domestic arrangement, and his claim for expenses would be limited.
You can check out this previous post 'Rent or domestic agreement' where we've answered a similar scenario.
Unfortunately we aren't in a position to give definitive answers on how tax law applies to each situation, so the above post also suggests how to obtain a direct decision on this if you'd like to seek one :)
Hi @renting_interst,
By paying rent at market value to your partner, it could be viewed as an 'at arm's length' arrangement. Under this, he may be able to claim deductions for expenses associated with owning an investment property, and would also need to declare any rental income he receives for it. If you were to pay less than market value, then it would likely fall under a domestic arrangement, and his claim for expenses would be limited.
You can check out this previous post 'Rent or domestic agreement' where we've answered a similar scenario.
Unfortunately we aren't in a position to give definitive answers on how tax law applies to each situation, so the above post also suggests how to obtain a direct decision on this if you'd like to seek one :)
15 Apr 2026 · 4 min read time
15 Apr 2026 · 8 min read time
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