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 an foreign income tax offset in your Australian tax return.

Example: Moving to Australia

Feng and his family will 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 will also rent out their apartment in Singapore. The rental income is deposited into the locally held account.

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. 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%) from the joint account.

Feng and Min already paid tax on the rental income in Singapore. There is a double taxation agreement in place between the Singapore and Australia, and they are able to claim a tax offset on the tax already paid in Singapore. When the returns are processed they each receive a refund.

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, see Question 20 in the Individuals Supplementary tax return instructions. If you are unsure of your obligations, contact your recognised tax adviser or us.

See also:

Last modified: 25 Feb 2016QC 33237