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You've finally got your rental property and the tenants have moved in.
Now you'll need to work out what income to declare.
Michael recently purchased this house, so let's find out what he's learnt.
Michael, how would you explain the income of your rental property?
Well, it's everything I receive when I rent out my property. It also includes renting
at a reduced rate to family or friends although in that case what I can claim is usually limited
to the amount of rent I receive.
And that's all included in your tax return?
That's right, and it's not just the actual rent. It can also include any rental bond
I've kept; for instance if I had to repair any damage by my tenant.
Or when I receive a letting or booking fee. Income can even be a government rebate for
the purchase of a solar hot-water system. Or if there was an insurance payout for unpaid
rent.
Michael, if you owned the property with your wife, how would that affect the rental income?
If I owned the property equally with my wife I'd only have to declare half of the income.
And also I could only claim half the expenses.
And if your property is negatively geared - that is, the rental income is less than
the loan interest and other expenses - you may be able to claim the loss against your
other income, such as salary and wages.
If you'd like to find out more and to watch other videos in the series go to ato.gov.au/rental.