The ATO has issued an information sheet to let taxpayers know that money earned from renting out a room in a house is rental income.<\/p>\n
This applies to rooms rented by traditional means or<\/em> through a sharing economy website or app.<\/p>\n Also, taxpayers can only claim expenses related to the part of the house they rent out (so expenses will need to be apportioned accordingly).<\/p>\n The following example illustrates how the ATO would expect rental deductions to be calculated.<\/p>\n Example: renting out part of a unit or house<\/strong><\/p>\n Jane has a two-bedroom unit with two bathrooms.\u00a0 She lives alone and only uses her spare room as an occasional home office, for storage and when she has guests.<\/p>\n Jane mainly uses the ensuite bathroom.\u00a0 The second bathroom is accessible from the main areas and mainly used by visitors.<\/p>\n Jane decides to rent out the spare room on a sharing economy website to earn extra income.<\/p>\n When paying guests come to stay, Jane removes all excess items from the room and does not access the area.<\/p>\n She also gives paying guests access to common areas including the second bathroom, kitchen, living area and balcony, and to her wi-fi.\u00a0 For the period guests are staying and have access to these, Jane can claim 50% of associated costs.<\/p>\n Jane had the room available and occupied 150 days in the year.\u00a0 When she is not renting out the room she uses it as storage and a home office.<\/p>\n Claiming Rental Deductions<\/strong><\/p>\n Jane calculates what she can claim based on the following additional factors:<\/p>\n She works out she can claim 17.97% of her general expenses<\/em><\/strong> (such as electricity, interest on her mortgage, internet expenses, rates and body corporate fees) after adding the following two calculations together:<\/p>\n (10\/80 x 150\/365) x 100 = 5.13%<\/p>\n ((50\/80 x 150\/365) x 50%) x 100 = 12.84%.<\/p>\n She can claim 100% of the expenses associated solely<\/em><\/strong> with renting out the room, such as the facilitator\u2019s commission or administration fee.<\/p>\n Note that CGT may also apply if a property used to generate rental income is sold.<\/em><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" The ATO has issued an information sheet to let taxpayers know that money earned from renting out a room in a house is rental income. This applies to rooms rented by traditional means or through a sharing economy website or app. Also, taxpayers can only claim expenses related to the part of the house they…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-13959","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"\n\n
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