Real estate income

This is lease or rent money you get from a property you own. It counts in your income test.

Real estate other than your main home also counts in the assets test.

Read about real estate assets and how they can affect payments from us.

What goes into the income test

Your assessable income from real estate is:

  • the gross income you get from it
  • minus the deductions we allow

Deductions

You can’t claim the same deductions for this as you can claim in your tax return.

What you can claim

Costs you can deduct include:

  • loan interest payments
  • rates
  • costs to maintain the property

What you can’t claim

Costs you can’t deduct include:

  • capital depreciation
  • special building write off
  • costs to build
  • costs of borrowing money such as loan establishment fees

Details we need

We’ll ask you for a profit and loss statement. This is normally your latest tax return.

Net losses

If you make a loss from your rental property, we count that income as zero.

You can’t offset this loss against the income from:

  • another property
  • any other source of income

Income from boarders and lodgers

This is where someone rents 1 or more rooms in your main home. Only part of what they pay you counts as income. The amount depends on whether any meals are included.

What they pay for How much counts as income
Lodging only 70%
Lodging and breakfast 50%
Lodging and all meals 20%

Deductions

We may count less of this income in the income test if having the lodger costs you more than they paid you. You can show us these costs using your tax return.

You can also deduct:

  • the mortgage interest on your main home, or
  • the rent you pay for your main home

Page last updated: 12 October 2017