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Edited version of private advice
Authorisation Number: 1051918579455
Date of advice: 8 November 2021
Ruling
Subject: Rental income - private arrangement
Question
Is the arrangement between you and family members to occupy the property considered to be a private arrangement?
Answer
Yes. Your circumstances meet the criteria outlined in Taxation Ruling IT 2167 and is considered to be a private or domestic arrangement in nature. You are not required to lodge a rental schedule in your income tax return.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You own your main residence jointly.
In YYYY, you subdivided your main residence and built another residential property (the property). You currently own the property jointly.
Your family members (the occupants) moved into the property after its completion, and they have resided at the property since completion.
The main purpose of subdividing your main residence and building the property was to provide the occupants a place to live and for them to eventually purchase the property off you once they had a better financial situation. You do not have an income producing intention for the property.
The occupants have not yet begun to make arrangements to purchase the property off you as they are waiting to be in a more financially stable position before applying for a loan.
You currently have a home loan with a bank for the property in your name as co-borrowers.
The mortgage repayments are met by the occupants as if the mortgage was their own. This includes both principal and interest.
The occupants deposit the funds directly into the mortgage by EFT transfer from their personal bank account.
Your name appears on the water, rates, and house insurance. The occupants name appears on the electricity and gas accounts.
The occupants pay for all the utility expenses themselves directly to the utility provider.
The occupants are solely responsible for the repairs and maintenance of the property and pay for all the associated expenses.
Relevant legislative provisions
Income tax Assessment Act 1997 Section 6-5