Thinking of joining the sharing economy and renting out part or all of your home? You may want to consider these points:
- You need to keep records of all income earned and associated expenses (e.g. commissions, council rates, interest on a loan for the property, gas, electricity, etc) and declare them in your income tax return
- GST is not payable on residential rent
- Where only part of the house is being rented, expenses must be apportioned on a floor-area basis
- Capital Gains will apply if you sell your main residence if it has been used to earn income e.g. renting out a room on a sharing economy platform. Capital Gains will be applied to any profit made on the sale of your home based on the proportion of your floor area rented out and the length of time it was rented. Normally your main residence is exempt from Capital Gains Tax.
For further information contact an accountant or refer to ATO website.
