Tag Archives: rental income and expenses

One of the area the ATO often focuses it’s attention on is Rental Income and Expenses.

Rental Income

  • You need to ensure you include all the income you’ve received from your rental in your tax return, including short-term rental arrangements, insurance payouts, letting or booking fees, and rental bond money you retain.
  • Rental income also includes any money received for renting out a room in your property or any goods and services you may have received as a form of payment.
  • In this instance you would need to work out the market value of these goods and services and include this income in your tax return.
  • Rental income also includes any amount that you may have received as reimbursement from a tenant for damage they have caused where you have claimed the repair as an expense.

Rental Expenses

  • Rental Expenses fall under a couple of areas
  • These are immediate deductions which you can claim in the year you incurred them and include the following: interest on loan, rates, insurance, advertising, agent’s fees, repairs & maintenance etc you will find a full list on the ATO website.
  • Please be aware that these are only deductable to you if you have incurred them, and they are not paid by the tenant.
  • The other is deductions you can claim over several years for the decline in your depreciating property. This includes capital works & plant and articles.
  • Capital works covers a building, extensions eg adding a room, garage or pergola it also such things as adding or removing an internal wall, kitchens & bathroom renovations and any structural improvements. such as sealed driveways, retaining walls & fences. These items are depreciated over a longer 40 year period.
  • Plant and article covers, window coverings, flooring, appliances, etc. These items are depreciated over shorter periods of time as set out by the ATO guidelines for effective lives and allow you to accelerate your depreciation in the earlier years of property depreciation.
  • These deductions can vary greatly from property to property as there are varying factors to consider eg: age of the property and the plant and articles within.
  • We at Write it Off are more than happy to discuss your individual needs with you regarding your property to ensure you get the maximum amount of depreciation available to you.