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Tinni(Newbie)Newbie
29 July 2024

Hi all,


My situation is, my mother lives in a "rumpus room" in our house with her own toilet but shares bathroom with us. She pays us a rent and gets rent assistance from centerlink. I have been told this is a "domestic agreement" so I dont need to include on my tax return however, she does claim rent assistance from centerlink so I want to know if that effects my tax return? Not sure if im making sense just don't want to get caught out when I file. Thanks!

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1,398 views
3 replies

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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
29 July 2024

I have been told this is a "domestic agreement" so I dont need to include on my tax return however, she does claim rent assistance from centerlink so I want to know if that effects my tax return?


Rent assistance goes to someone who is paying rent.


Rent is taxable income, and will affect your CGT main residence exemption to some extent.


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Most helpful reply

Bruce4Tax(Taxicorn)Taxicorn
29 July 2024

I have been told this is a "domestic agreement" so I dont need to include on my tax return however, she does claim rent assistance from centerlink so I want to know if that effects my tax return?


Rent assistance goes to someone who is paying rent.


Rent is taxable income, and will affect your CGT main residence exemption to some extent.


Liked by Tinni
DuncanS2(Dynamo)Registered Tax Professional
29 July 2024

@Tinni


Find this interesting.


I understand a "domestic arrangement" involves reimbursement of expenses eg Food, Electricity


One might think that Rent Assistance from Centrelink is used to provide Rent. Recall that the Rental Agreement or similar is provided to Centrelink.


Will look forward to hearing from the ATO.


Duncan

Liked by Tinni
Taxduck(Taxicorn)Taxicorn
29 July 2024

A domestic arrangement is one where a relative is paying for board and lodging. (meals and accommodation) See below

Rental property as investment or business | Australian Taxation Office (ato.gov.au)

The ATO is pretty vague about this as they don't define board and lodging as mentioned in the link. However they do describe the payment as rent. The social security guide defines lodging as the provision of accommodation and a payment for lodging is the same as a rent payment. (so eligible for rent assistance)

In the ATO link the ATO describes this arrangement as a domestic arrangement and the "rent does not need to be declared as income."

Your situation certainly appears to be a domestic arrangement, so the rent you receive does not need to be declared even though your mother receives rent assistance.

Liked by Tinni

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family agreement rental with rent assistance | ATO Community