• ### Renting out a room?

#### How to work out the expenses you can claim

If you rent out all or part of your home including through the sharing economy, for tax purposes you need to:

• keep records of all rental income earned and declare it in your tax return
• keep records of expenses you can claim as deductions
• calculate your capital gain or loss when you sell the property.

#### Income you need to declare:

• all income before fees and commissions
• insurance payouts – for example, compensation for damage caused by renting
• bonds or security deposits you become entitled to retain
• letting and booking fees you charge, including cancellation fees.

#### Expenses you may be able to claim include:

• council rates
• interest on a loan for the property
• electricity and gas
• property insurance
• cleaning and maintenance costs
• fees or commission charged by the platform
• other expenses that directly relate to the earning of your rental income.

How much of the expense you can claim will depend on:

• the number of days you rent out the room or whole property during the year
• the portion of the property you have rented out – for example, a room or the whole property.

#### Working out the deductions you can claim

• How big is the property?
• How big is the rented room?
• How big are the shared or common areas?
• How many days was the room rented out?

#### How to work it out

Rented room (claim 100% for days rented):

(Rented rooms size ÷ Total size of house or unit) × (Number of days rented ÷ Total days in the year) × 100 = Percent of expenses claimable

Common areas (claim 50% for days rented):

(Total common areas ÷ Total size of house or unit) × (Number of days rented ÷ Total days in the year) × 50% × 100 = Percent of expenses claimable

Example: how to work out deductions you can claim

(80m2 unit, 10m2 room rented for 150 days)

Rented room:

(10 ÷ 80) × (150 ÷ 365) × 100 = 5.13%

Common areas:

(10 ÷ 80) × (150 ÷ 365) × 50% × 100 = 12.84%

Total percentage of expenses you can claim = 17.97%

End of example