If you're a landlord, then you have certain tax obligations each year. You are responsible for making sure you fulfil the tax obligations for the income you earn.
You have to declare the rental income you earn when you complete your annual tax return (IR3), and you need to keep good records.
Our Rental income (IR3R) form makes it easier to work out the income you've earned after deducting expenses. Use a separate form for each rental property.
Depending on whether you made a profit or a loss, the net rental income earned will be either added to or deducted from your other income. That's unless you choose to rent your property for less than market value. In which case, if you make a loss (because the property expenses outweigh the income earned), you can't deduct this loss from your other income.
When you own a rental property you must keep accurate records so that you can calculate the income and expenses of your rental property. These include:
It's easier if you use a separate bank account for your rental activity.
You must keep your records for at least seven years, even if you no longer rent out the property. You don't need to provide these records to us, but you must have them in case we want to see them.
If you receive payments for providing accommodation (including through websites such as Airbnb or Bookabach), the income you receive is taxable.
This includes any payment for one-off or irregular rentals.
You must include the amount you receive in your tax return. You can claim deductions for expenses that relate to you earning this income. If you are unsure whether this situation applies to you, we recommend you seek professional advice.
There are different tax rules if you have a mixed-use holiday home - this is where you use the holiday home yourself, you rent it out as well, and it's unoccupied for 62 days or more.
If you have a mixed-use holiday home and you earn less than $4,000 a year from renting it out, you don't need to include this income in your annual tax return. If you choose not to declare this rental income, you won't be able to claim expenses for the holiday home either.
If you have five boarders or more then you must complete an annual tax return.
If you have four boarders or less, and the income you earn is under the weekly standard cost that we set each year, you don't have to declare this income in your tax return. If you choose not to declare this income, you won't be able to claim expenses for any costs associated with the boarders either.
|If you have ...||then the standard cost each week is ...|
|up to two boarders||$266 for each boarder.|
|up to four boarders||$266 each for the first two boarders.
$218 each for the third and fourth boarder.
If you have flatmates living with you or tenants living in your property, then you must include this rental income in your annual income tax return (IR3).
You can work out the expenses you can claim against your rental income in two ways:
Find out more about claiming expenses
Find out about buying residential property
Find out about selling residential property
Register for myIR to manage your tax and entitlements securely online
Work out if you have to pay tax on a property sale using our decision tree