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  • Rental income from overseas property

    You must include rental income from overseas properties in your Australian tax return.

    This income is the full amount of rent and associated payments you receive or become entitled to when you rent out your property. It doesn't matter whether it's paid to you or your agent.

    If you receive associated payments in the form of goods and services, you’ll need to work out their monetary value for your Australian tax return.

    Your rental income includes any assessable amounts you receive relating to limited recourse debt arrangements involving your rental property.

    If you have paid tax in another country on your rental income, you can claim a foreign income tax offset in your Australian tax return.

    Example: Moving to Australia

    Feng and his family move from Singapore to Australia permanently under an employer-sponsored arrangement. Feng and his wife, Min, have a joint bank account in Singapore which they have decided not to close. They also rent out their apartment in Singapore. The rental income is deposited into the locally held account in Singapore.

    Feng and Min visit a tax agent, Sandra, before the end of the financial year. Sandra asks them about their earnings and assets. Feng tells her about the rental property and offshore bank account in Singapore. When preparing the couple's tax returns, Sandra includes the rental income they received from the apartment in Singapore under the foreign source income label. She also lists each spouse's share of bank interest (that is, 50% each) from their joint account.

    Feng and Min already paid tax on the rental income in Singapore. Since there is a double taxation agreement in place between Singapore and Australia, they are able to claim a tax offset on the tax already paid in Singapore.

    End of example

    For your property located overseas, special rules apply to the deductibility of rental property expenses that can be claimed against your foreign rental income.

    For more information on foreign source income and the special rules that apply to the deductibility of rental property expenses, see Question 20 and D15 Other deductions in the Individuals Supplementary tax return instructions. If you are unsure of your obligations, contact your registered tax agent or us.

    See also:

    Last modified: 01 Jul 2020QC 33237