More information

Find out about:

• Rental income
• Rental expenses
• Other tax considerations

Rental income

Rental income is the full amount of rent and rental associated payments you earn when you rent out your property (including renting out a room). If payment is made in goods or services, you will need to work out the monetary value of these. Your gross rental income amount includes:

• rental income – rent paid to you
• rental-related income – such as:
  • any bond money you
    • retained in place of rent, or
    • kept because of damage to the property requiring repairs
     
  • an insurance payout for lost rent, or a reimbursement of any rental expenses, you claimed in 2019–20 or claimed in an earlier year
  • fees retained from cancelled booking.
   

See also:

• Rental income you must declare
• Renting out part or all of your home
• Holiday homes

Rental expenses

You can claim most expenses relating to your rental property but only for the period your property was rented or genuinely available for rent, for example, advertised for rent without limiting its exposure to potential clients.

Expenses could include advertising for tenants, bank charges, body corporate fees, borrowing expenses, council rates, decline in value of depreciating assets, gardening and lawn mowing, insurance, land tax, pest control, property agent fees or commissions, repairs and maintenance, stationery, phone and water charges.

You can claim 100% of fees or commissions charged by a sharing economy facilitator or administrator.

See also:

• Renting out part or all of your home
• Holiday homes
• Deduction for prepaid expenses
• Always check your supplier's ABN
• Expenses prior to property genuinely available for rent
• Apportionment of rental expenses
• Co-owner rents property
• Guide to depreciating assets

Types of rental expenses

There are three categories of rental expenses:

• expenses you incur and can claim an immediate deduction for in the income year, such as interest on loans – see Rental expenses you can claim now
  • Body corporate fees
  • Council rates and local government expenses
  • Interest on loans
  • Land tax
  • Legal fees
  • Agent fees or commissions
  • Repairs and maintenance
  • Travel and car expenses (in some cases only)
  • Other expenses
    • Lease document expenses
    • Mortgage discharge expenses  
     
   
• expenses you can claim over several income years, such as depreciation – see Rental expenses you claim over several years
  • Borrowing expenses
  • Capital allowances
    • Limit on deductions for decline in value of second-hand depreciating assets  
     
  • Capital works  
   
• expenses you can't claim, such as costs your tenant paid, deductions unrelated to your investment property and expenses related to holding vacant land – see Rental expenses you can't claim.

Other tax considerations

• Capital gains tax
• Goods and services tax (GST)
• Negative gearing
• Pay as you go (PAYG) instalments