Real estate income

Real estate income is the amount you receive from your real estate, such as for leasing or rent.

Your assessable real estate income is the gross income for the property less allowable deductions. For example, you can deduct interest payments, rates and maintenance costs.

We do not allow all the same deductions as when you do your tax. You cannot deduct:

  • capital depreciation
  • special building write off
  • construction costs
  • borrowing costs, for example, loan establishment fees

We will ask you to give us a profit and loss statement, usually your latest tax return, so we can work out your assessable real estate income.

Total net losses from rental property

If your net income from your rental property is a negative amount, we consider your income from that property to be zero. You cannot offset a loss from one property against the income from another property or any other source of income.

Income from boarders and lodgers

If you have a boarder or lodger, we only assess a percentage of the amount you receive as income. The amount we assess depends on whether you are providing meals.

Accommodation you provide Proportion of the amount you receive that we assess as income
Lodging, accommodation only 70%
Bed, accommodation and breakfast 50%
Full board and lodging, accommodation and meals in addition to breakfast 20%

If you can show us you have spent more in costs than the amount allowed, we may assess a lower amount. You can show us this using your income tax return.

If you have a mortgage or pay rent for your principal home, this may be deducted from the amount of income assessed.

Real estate may also be considered an asset which could affect your payment rate. Read more about real estate assets and their impact on your payment.

Page last updated: 25 January 2016