Video transcript - Income from renting your property
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.
Michael, how would you explain the income of your rental property?
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.
And that’s all included in your tax return?
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.
So Michael if you owned the property with your wife, how would that affect the rental income?
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.
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
This video identifies what you must include in your tax return as income from your rental property.