Owning and renting a property
Our Rental properties guide 2025 will help you, as an owner of rental property in Australia, work out what:
- rental income is assessable
- expenses are allowable deductions
- records you need to keep
- you need to know when you sell your rental property.
Many, but not all, of the expenses associated with rental properties are deductible. This guide explains:
- how to apportion your expenses, if only part of the expense is deductible
- what expenses are not deductible
- when you can claim those expenses that are deductible
- some you can claim in the tax return for the income year in which you spent the money
- others must be claimed over several years (including decline in value of depreciating assets and capital works expenses).
When you own a rental property, you may also need to know about:
- capital gains tax (CGT)
- general value shifting regime
- goods and services tax (GST)
- negative gearing
- pay as you go (PAYG) instalments.
Natural disasters and hardship
We have special arrangements for people affected by natural disasters such as a cyclone, flood or fire occurring during the income year. For more information on help in natural disasters or if you're experiencing financial hardship, see Support in difficult timesExternal Link.
If your records are lost or destroyed, we can help you to reconstruct your tax recordsExternal Link, and make reasonable estimates where necessary.
We can also help you by:
- fast tracking refunds
- giving you extra time to pay debts, without interest charges
- giving you more time to meet activity statement, income tax and other lodgment obligations, without penalties.
Granny flat arrangements and capital gains tax
A granny flat arrangement is a written agreement that gives an eligible person the right to occupy a property for life.
A granny flat arrangement is exempt from CGT if:
- the owner or owners of the property are individuals
- one or more eligible people have an eligible granny flat interestExternal Link in the property
- the owners and the people with the granny flat interest enter into a written and binding granny flat arrangementExternal Link. This arrangement must not be commercial in natureExternal Link.
Other CGT events that are not related to a granny flat arrangement, or sit outside the arrangement, are subject to normal CGT rulesExternal Link. For example, the sale of a property that was used in a granny flat arrangement, which has since terminated, is subject to the normal CGT rules.
Is your rental property outside Australia?
If your property is located outside Australia, special rules apply to the deductibility of your rental property expenses.
For more information on foreign source income, see question 20 in the individual tax return instructions. If you're unsure of your obligations, contact your recognised tax adviser or us.
Continue to: What's new in the rental properties guide?External Link
Return to: How to get the Rental properties guide 2025External Link