TAX IMPLICATIONS OF RENTING OUT A ROOM OR PART OF YOUR HOUSE.
The tax office has determined that renting out a room, part of your house, either privately or through websites such as Air Bnb, means that the income you receive is taxable.
You can only claim expenses related to the part of the house that you rent out, and the expenses must be apportioned accordingly.
However, you can claim 100% of any fees or commissions charged by the organisations such as Air Bnb.
Click here How It Works to lodge your tax return for your rental income.
As a general guide you should apportion your expenses on a floor area basis, on the area solely occupied by the renter, and add to that a reasonable amount for their access to common areas.
If you use the room in any capacity when you do not have a guest staying, for example: storage or a home office, then you can not claim deductions for expenses when the room is not occupied.
You can only claim expenses for when the room was available for rent.
Renting out a home or part of a home is a growing area which provides people with extra income. However, from a taxation point of view it is quite complicated and can even give rise to capital gains issues once the property is sold. For more information, see our Capital Gains Tax page.
If you have received income from renting out your home or part of your home, or intend to do so, please Contact Us so that we can advise you on the correct treatment from a taxation point of view.
Click here How It Works to lodge your tax return today.