Rental property owners should remember three simple steps when preparing their return:
- Include all the income you receive
This includes income from short term rental arrangements (e.g., a holiday home), sharing part of your home, and other rental-related income such as insurance payouts and rental bond money you retain. - Get your expenses right
- Eligibility – Claim only for expenses incurred for the period your property was rented or when you were actively trying to rent the property on commercial terms.
- Timing – Some expenses must be claimed over a number of years.
- Apportionment – Apportion your claim where your property was rented out for part of the year or only part of your property was rented out, where you used the property yourself or rented it below market rates. You must also apportion in line with your ownership interest.
- Keep records to prove it
You should keep records of both income and expenses relating to your rental property, as well as purchase and sale records.
And remember, renting property (including all or part of your own home) will usually give rise to a capital gain or loss when you sell the property – which you will need to include in your return in that year. For more information, see Capital gains or losses.
See also:
These myTax 2020 instructions are about rental income and rental properties.