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How income tax and lease inducement payments work when you’re leasing out commercial property.

Income tax

All your income from leasing out commercial property is taxable, and you can claim lease-related expenses against your income.

Learn more about what expenses you can claim.

Rental property expenses 

Lease inducement payments

Lease inducement payments are financial incentives you give to people you want to take up a commercial lease. They can be cash payments or payments towards rent or fit-outs.

Your tenant must declare these payments as income, while you can claim them as expenses.

Lease surrender payments

Lease surrender payments are paid by tenants to landlords when they want an early release from their lease.

Your tenant can claim these payments as expenses, while you must declare them as income.

Record keeping

You'll need to keep your commercial rental records for 7 years.

Rental property records
GST and commercial accommodation
The tax difference between commercial and residential property

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Last updated: 13 Dec 2023
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