If you are listed on the title deed as the beneficial owner of a property and you have listed your property for rent; you have to include your share of any rental income earned and claim any rental expenses incurred in your income tax return. Your share is based on your ownership interest in the property.
Generally all the ownership and maintenance costs are immediately deductible when a residential rental property is available for rent. Please note any replacements of assets, where the cost is $300 or greater, the cost of the asset is claimed over the useful life of the asset. Asset useful lives are determined by the Commissioner of the Australian Taxation Office.
Renting at less than market value
You are only entitled to claim your rental property expenses to the limit of the rental income earned, that is, there will be no net profit or loss from the rental property.
Renting at market value
You are entitled to claim all ownership, maintenance and costs associated to renting your property against the rental income earned. This may result in a net rental loss which under current income tax legislation, can reduce your taxable income and ultimately reduce your income tax liability. Any unused loss is carried forward to future income tax years until it is completely utilised.
The cost to prepare a residential rental property statement starts at $88.
