When using an online accommodation sharing platform to earn income, you must report to us income from renting out:
- part (one or more rooms) or all of your home (your main residence), whether or not you were living in the home at the time or at other times during the year
- any other property you own – see Owning and renting a property or holiday home.
Income to declare
If you rent out all or part of the house or unit, the payments you receive are assessable income. This means:
- you must declare the income as rental income in your tax return
- you can only claim deductions for the proportion of associated expenses that reflect both
- the proportion of time the room/property is rented (or occupied for payment)
- the proportion of the property that is rented.
You will need to keep records such as:
- statements from platforms that show your income
- receipts of any expenses you want to claim deductions for.
Watch:
Media: How to include rental income and expenses in myTax
https://tv.ato.gov.au/ato-tv/media?v=bd1bdiubtjsfhwExternal Link (Duration: 01:59)
Capital gains tax
When you sell the property, you may need to pay capital gains tax (CGT). Even if it is or was your home (main residence), renting out any part of it usually means losing part of your CGT main residence exemption.
Deductions you can claim
Common expenses you can claim a portion of as deductions include:
- council rates
- interest on a loan for the property
- electricity, gas and water
- property insurance
- cleaning and maintenance costs (products used or hiring a commercial cleaner).
You may be able to claim 100% of fees or commission charged by the platform.
How much of the expense that can be claimed will depend on:
- the number of days you rent out the house or property during the year
- the portion of the property you have rented out (for example, a room or the whole property).
Find out more about rental expenses to claim.
Renting out part of a home
If you are only renting part of your home (your main residence), for example a single room, you can only claim expenses related to renting out that part of the home. This means you need to apportion the expenses for both private and income-producing use.
As a general guide, apportion the expenses based on the floor-area solely occupied by the renter (user) and add to that a reasonable amount based on your guest's access to common areas.
You can only claim expenses for the days in a year when the room was rented. When a room in your home is not being rented out, it is treated as being used privately as part of your home.
Example: Renting out part of your home
Jane has a two-bedroom unit with two bathrooms in a popular downtown area. Jane lives alone and only uses her spare room as an occasional home office for storage and when she has guests. She mainly uses the ensuite bathroom. The second bathroom is accessible from the main areas and is mostly used by visitors.
Jane decides to rent out the spare room using an online platform to earn extra income.
The unit is 80 square metres in total. The spare room being rented is 10 square metres.
Jane also gives paying guests access to common areas including the second bathroom, kitchen, living area and balcony, which totals 50 square metres. She also offers her guests access to her wi-fi for free.
For the period guests are staying and have access to common areas (along with Jane), Jane can claim 50% of the deductible portion of associated costs related to the common areas.
Jane had the room occupied 150 days in the year.
Jane calculates what she can claim based on the following questions:
- How big is the room? 10 square metres.
- How big is the house? 80 square metres.
- How big are the common areas? 50 square metres.
- How many days is the room rented out? 150 days.
She works out she can claim 17.97% of her general expenses after adding the two calculations together:
- room occupancy − (10÷80) × (150 ÷ 365) × 100 = 5.13%
- common areas − ((50÷80) × (150 ÷ 365) × 50%) × 100 = 12.84%.
Jane can claim a deduction of 17.97% of her general expenses such as electricity, interest on her mortgage, rates and body corporate fees.
She can also claim 100% of the expenses associated solely with renting out the room, such as the platform's service fees or commission.
End of exampleRenting out your home on an occasional basis
If you rent out your whole home (main residence) on an occasional basis through the sharing economy, you can claim the portion of expenses relating to the period you rented it out.
This applies if you rent out your home when you're away for a period of time, or if you vacate it to allow paying guests to stay.
In this case, the total expenses you can claim must reflect the portion of the financial year your home was rented out.
You can claim 100% of any expenses that are only related to renting out your home to paying guests (such as fees or commission charged by the platform).
Example: Renting out your home on an occasional basis
John and Mary live in a one-bedroom unit in the city, which they list as available for rent on an online platform for paying guests. When they accept a booking for their unit, they stay with Mary’s parents.
Because the unit is John and Mary’s home (main residence), and they only vacate the place when there's a booking, they can only claim expenses based on the time that it was rented out.
Last year, John and Mary rented out the unit for 100 nights. This means they can claim 27.93% (calculated as (100 ÷ 365) × 100) of the general expenses for the unit (such as electricity, interest on their mortgage, rates and body corporate fees).
John and Mary can claim 100% of the expenses associated solely to renting out the unit, such as the sharing platform's service fees or commission.
End of exampleYou can find out more information about: