Rental Income
Income received from renting out a property, which must be declared as assessable income in your tax return.
Rental income is the total income you receive from tenants for the use of your investment property. It is assessable income that must be declared in your tax return. Rental income includes regular rent payments, bond money you retain (e.g., for unpaid rent or damage), letting and booking fees received, insurance payouts for lost rent, and any other payments tenants make in connection with the property.
You can claim deductions for expenses incurred in earning rental income, including mortgage interest, council and water rates, property management fees, insurance, repairs and maintenance (but not capital improvements), advertising for tenants, pest control, cleaning, gardening, and depreciation on fixtures and the building structure. The difference between rental income and allowable deductions determines whether you have a net rental profit (added to your assessable income) or a net rental loss (which can offset your other income through negative gearing).
If you own a property with others (such as a spouse), rental income and expenses must be split according to your legal ownership interest — not your loan contributions or any other arrangement. For jointly owned property (joint tenants), this is typically 50/50. For tenants in common, it's split according to the ownership percentages on the title. You cannot redirect income to a lower-earning partner to reduce tax.
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Negative Gearing
When the costs of owning an investment property (interest, expenses) exceed the rental income, creating a tax-deductible loss.
Depreciation (Rental Property)
Tax deductions for the declining value of a rental property's building structure and plant & equipment (fixtures and fittings).
Capital Works Deduction
A deduction for the construction cost of a building or structural improvement, typically claimed at 2.5% per year over 40 years.
Land Tax
An annual state/territory tax on the value of land you own, excluding your principal place of residence in most states.
Capital Gains Tax (CGT)
Tax on the profit made from selling or disposing of an asset, such as property, shares, or cryptocurrency.