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Emily33(Newbie)Newbie
19 Mar 2023

Hi all, appreciate your advice on my case.


I rent my property to my parent who paid half of the purchase price. So the rent they pay me is half of the market rent.


I read an article that if the rent received is well below market rent you can claim only expenses up to the amount of rent received (no negative gearing). But I think my case is different. Interest expense has been reduced to half so as my claim for interest expense which is the major property expense.


Can I use the 50% discounted rent as my assessable income and claim tax deductions for the full amount of rental property expenses?


Thank you for your advice in advance.

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Bruce4Tax(Taxicorn)Taxicorn
20 Mar 2023

I rent my property to my parent who paid half of the purchase price. So the rent they pay me is half of the market rent.


Unless their name is on the title, they have loaned you half the money to buy the property.

That would entitle then to interest, but not a discount on the rent.


Can I use the 50% discounted rent as my assessable income and claim tax deductions for the full amount of rental property expenses?


If you do not charge market rent, then your deductions are limited to rent received.




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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
20 Mar 2023

I rent my property to my parent who paid half of the purchase price. So the rent they pay me is half of the market rent.


Unless their name is on the title, they have loaned you half the money to buy the property.

That would entitle then to interest, but not a discount on the rent.


Can I use the 50% discounted rent as my assessable income and claim tax deductions for the full amount of rental property expenses?


If you do not charge market rent, then your deductions are limited to rent received.




Emily33(Newbie)Newbie
20 Mar 2023

Thank you so much for your response! Just one more question.


Their name is not on the title and they gave me the money out of their cash savings so no mortgage with the money. If I pay some interest to them then can I claim the interest expense in my tax return?


Is it acceptable with ATO if I pay them as cash with a proper record rather than bank deposit because my parents are concerned about any negative impact on their age pension?

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Can I claim full tax deductions when I rent my property to my parent with a special arrangement? | ATO Community