Carrying on a business of letting rental properties – supporting information

How to lodge

To apply for a private ruling about whether you are carrying on a business of letting rental properties:

• complete and submit a private ruling application form
• provide the supporting information listed below.

To lodge an objection about whether you are carrying on a business of letting rental properties:

• complete and submit the relevant form
  • Objection form – for taxpayers
  • Objection form – for tax professionals
• provide the supporting information listed below.

The alternative for the carrying on of a business of letting rental properties is the holding of rental properties for investment purposes.

Check first to see whether your question is answered in:

• Rental properties and travel expenses – this explains who can and can’t claim travelling expenses
• Rental properties annual guide – refer to the headings of Co-owners of an investment property (not in business) and Partners carrying on a business of letting rental properties, which explain that most rental activities are a form of investment and do not amount to carrying on a business
• Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? – Paragraph 13 of TR 97/11 lists 8 indicators to determine whether a business is being carried on. Although this ruling refers to the business of primary production, these indicators apply equally to activities of a non-primary production nature, and in this case, rental properties.

Supporting information

Providing this information up front will reduce delays.

If you've previously given us any of the information listed below, you don't need to resend it.

The information we need for a private ruling or objection about whether you are carrying on a business of letting a rental property include (you need to provide us with these details for each property):

• details of the property that you currently own, or have sold, such as  
  • the address of the property
  • the date you purchased the property and its purchase price
  • the reasons you purchased that particular property, in that location, at the time you purchased the property
  • your ownership interest in the property
  • the date when the property was first available for rent
  • the current market value of the property
  • an amount borrowed to purchase the property
  • any money still owing on any loans for the property
  • the date you sold the property, its sale price and the reasons why you sold it
• if you engage the services of property managers in relation to your property  
  • the duties the property managers undertake in relation to the property
  • how much it costs you each year to engage the services of the property managers
• how the rent is collected and how you receive these amounts
• who advertises the property for rent, where the advertising is done and how frequently the property is advertised
• who draws up and negotiates the lease agreements and who vets the rental applications from potential tenants
• whether the property is leased as a long-term rental, short term rental, or both, and how long a typical lease agreement for the property is
• formal documents relating to the leasing of the property such as  
  • lease agreements
  • agreements in relation to the engagement of the services of real estate agents
• your involvement in any repairs and maintenance of the property and how often you carry out repairs and maintenance, including the amount of time you spend on this
• details of anyone else who attends to the repairs and maintenance of the property, under what circumstances that occurs, and how frequently that occurs
• the point of contact for tenants when they need assistance, or whether the tenants are responsible for arranging maintenance themselves
• who undertakes property inspections, when they occur, how often they occur and how much time they typically take
• the number of hours per week on average you spend dealing with issues relating to the rental property, including an itemised list of each of your activities and the time spent on each activity
• details of your employment, such as the number of hours per week you work and the location of your day-to-day work
• whether the rents are your only source of income
• details of any bank accounts used in relation to the rental property and if a separate account is kept specifically for the property
• how the rent amounts are determined and how often the rent charged is changed
• records you keep in relation to your rental activities and the property
• intentions you hold, or did hold in relation to the property, such as  
  • your original intention for the property when it was first purchased
  • if your intention changed in relation to the property, why it changed and what your intention currently is in relation to the property
  • what activities you have undertaken to achieve your intended goal in relation to the property
  • any future projections you have for each property
• any business plan you have in relation to the rental property and any strategies that are in place to expand your rental property activities
• why you regard yourself as carrying on a business of letting rental property rather than holding the property as a passive investor.