Rental Income | ETAX/MyTax, Tax Return Information: Learn Tax Tips and Tax Advice Australia

Rental income via Airbnb

April 30, 2021

by Acc Ramji Airbnb Rental Income

If you have investment property and rent out through Airbnb, the revenue from this property is considered assessable income. If you are not charging any commercial rent then ATO can consider your claim as deduction. When you are making a loss, a venture has occurred in this case.

On the other hand, as taxpayers you are entitled to claim in your return. Rental income through Airbnb is deductible if expenses incurred for investment property. The situation is the same as discussed before for rental property. Meanwhile, if the entire property is on rent, you can claim all expenses as deduction like renting property by investor. You need to keep in mind that if you rent out the property, you can claim cost as deduction.

Expenses consider into 3 different categories:

The expenses which occurred are directly connected to your investment property, so you can claim the full amount.
If you have shared areas like a house and you rented out some short of area then the deduction can be calculated portion wise.
If the cost associates to a private residential area, cost could not be considered as deduction.
Deductible expenses for Airbnb property includes repairs and maintenance, cleaning service, professional advertisement for Airbnb listing and food include breakfast for guests.

If you would like to give a house to Airbnb for rent, you need to calculate separately your personal expenses. Whenever you share the house with Airbnb renters, you need to base the share on the floor area and exclude the rest property.

For more information on online tax return 2021, Tax Return 2021, myGov 2021, myTax 2021 or any other tax related matter, please call our professional accountant on 1300 768 284 or you can email us at enquiry@taxrefundonspot.com.au

Rental income for Tax Purposes

February 18, 2021

by Acc Ramji Rental Income

If you have investment property which is more than once, the rental income from investment property is considered as assessable taxable income. Which means that you must pay tax to Australian Taxation Office (ATO). The tax is counted as the marginal tax rate. So you must disclose the rental income and need to pay tax when you do a tax return.

There is a certain income threshold for tax break. If your income is $18,200 or below, you no need to pay tax to ATO. On the other hand, if your income is more than $37,000, you need to pay 19 cents for every single dollar. The rate will change for higher income.

For Example, Ray has income $80,000 annually and has rental income $20,000. So we can add up ($80,000 + $20,000 =$100,000 before tax). Let’s assume that there were no changes and Ray will pay $24,497 in tax for 2020-21. This is because Ray’s income fell in the $90,001 to $180,000 group and taxed is around $20,797 plus 37 cents for every single dollar.

You have to disclose all sources of income in your return. This is because this income is considered as taxable income and you need to pay tax. If you have disposed of the property and made gain that you need to disclose in your return. In addition, if you earn dividend and interest from shares that you need to include in your return. The interest that you earned from a savings account or term deposit from your bank.

It does not matter how much you earn for a particular financial year, but accountants also consider deduction according to your rental income.

Rental income and Tax deduction

February 18, 2021

by Acc Ramji Rental Income Tax Deduction

If you have investment property and you have rental income from your tenant. Taxpayers should know about their deduction. So, it means that you can save your tax according to your property expenses. If you have investment property, you may be entitled to claim your investment property expenses and put a deduction when you lodge your tax return. According to ATO guidelines there are certain rules needed to follow. There are some expenses you can claim such as Maintenance cost, Management cost, depreciation and borrowing expenses.

Please keep in mind that as property owner, if you did not pay any expense from your pocket as taxpayer you are not entitled to claim expenses as deduction in your return. For example, if you rented out property to Jay(tenant), so utility bills, repairs or renovation paid by Jay. It means that property owners are not entitled to claim for any renovation or repair expenses and cannot claim as deduction in their income tax return.

As property owner, you can claim a deduction for the following expenses:

Advertising for tenant
Body corporates Fees
Borrowing expense
Cleaning
Council rates
Depreciation schedule
Gardening/ Lawn mowing
Insurance
Interest on loans
Land tax
Legal Fees
Pest control
Property agent fees/ commission
Repairs and maintenance
Stationary, telephone and postage
Travel expenses
Water charges
Sundry rental expenses

You can also claim any repair cost. As a borrowing expense, you can only claim interest on your investment property.

Please keep in mind that you can only claim interest amount rather than loan principal amount. This means that when you calculate your dedication you cannot consider the principal amount of investment loan. There are some other borrowing fees also considered as dedication in tax return. These expenses include Title search, Loan establishment, Lender mortgage insurance (LMI), if stamp duty charge on mortgage and payment to mortgage broker.

Losses in depreciation can be claimed as deduction in tax return. Deduction is counted on newly purchased items whose value will be declined over the time. For example, blinds, carpets, water system and appliances.

When you have investment property then you can see, as a taxpayer you can save a lot of money by claiming a different type of deduction. Please keep in mind that you need to remember all these expenses when you do your tax return to claim your deduction in your return.