Renting out all or part of your property?

Before we begin - if you are renting out accommodation, whether it be for a week, a month or a year, DECLARE ALL INCOME!  

The ATO has the capacity to cross-reference data from banks, government agencies and third parties against data about car and real estate purchases.  

The ATO has said these are the three main tips when renting out part or all of a property:  

Be aware of capital gains tax ramifications

Just like running a business from home, once income is earned from a primary place of residence there are Capital Gains Tax (CGT) implications.

It is possible that if a property significantly increases in value, the amount of CGT owed may even be higher than the amount of income received.

Noting this, the ATO encourages anyone considering partial or full rental opportunities to consult with an independent advisor and keep accurate records

Are you entitled to this deduction

Think you can get away with that cheeky deduction? Not so fast. The ATO warned incorrect claims “will not go unnoticed”, flagging that it was using sophisticated data analytics and risk modelling.

As such, people renting out part or all of their property should note that deductions can only be claimed against the income earned through accommodation sharing, and only to the portion of the house that is being rented out.

Have you made a mistake?

The ATO said it will always try to help out taxpayers who may have made a mistake or accidentally omitted incomes.

“Any taxpayer who thinks they might have made a mistake or needs assistance in understanding their obligations should contact the ATO or their agent,” the ATO said.

If you rent out or are considering renting out all of part of your property, DC Advisory Group can make sure you are adhering to the ATOs regulations.  Contact us today to make your appointment.