• Video transcript - Income from renting your property

    Attention

    To see the video of this transcript, go to Income from renting your property.

    End of attention

    Host

    You’ve finally got your rental property and the tenants have moved in.

    Now you’ll need to work out what income to declare.

    Michael recently purchased this house, so let’s find out what he’s learnt.

    Host

    Michael, how would you explain the income of your rental property?

    Michael Lo

    Well, it includes everything I receive when I rent out my property. It also includes renting at a reduced rate to family or friends although in that case the deductions I can claim is usually limited to the amount of rent I receive.

    Host

    And that’s all included in your tax return?

    Michael Lo

    That’s right, and it’s not just the actual rent. It can also include any rental bond I’ve kept; for instance if I had to repair any damage by my tenant or when I receive a letting or booking fee.

    Income can even be a government rebate for the purchase of a solar hot-water system or if there was an insurance payout for unpaid rent.

    Host

    So Michael if you owned the property with your wife, how would that affect the rental income?

    Michael Lo

    If I owned the property equally with my wife I’d only have to declare half the income. And also I could only claim half the expenses.

    Host

    And if your property is negatively geared - that is, the rental income is less than the loan interest and other expenses - you may be able to claim the loss against your other income, such as salary or wages.

    If you’d like to find out more and to watch other videos in the series go to ato.gov.au/rental

      Last modified: 06 Mar 2015QC 40935