Rental income
Money you receive from letting a property, assessable in full and declared in your tax return.
All rent you receive is assessable income, declared in the year you receive it. This includes not just the base rent but also bond money retained for damages, insurance payouts for lost rent, and reimbursements from tenants for expenses.
You declare the gross rent, not what your agent deposits. Management fees, repairs and other costs the agent deducts before paying you must be shown as expenses rather than netted off the income.
The ATO receives extensive data from property managers, state revenue offices and rental bond authorities. Undeclared rental income is one of the more easily detected discrepancies in the system.
Gross rent, not net deposits
Your agent collects $31,200 for the year, deducts $2,500 in fees and repairs, and remits $28,700. You declare $31,200 as income and claim $2,500 as expenses — not $28,700.
The bit people get wrong
Renting to family below market rent limits your deductions. The ATO expects claims to be proportionate to the rent charged, so a mates-rates arrangement cannot generate full-market deductions.
Common questions
Do I declare income from renting a room?
Yes. Income from renting part of your home is assessable, and it can also create a partial capital gains liability on your main residence.
Is short-stay income treated differently?
Short-stay letting income is assessable in the same way, with expenses apportioned for the periods the property was available for rent rather than used privately.
When is rent counted as received?
When it becomes available to you, which for most investors means when the agent receives it rather than when it lands in your account.
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