There are two ways to account for rental income if you have private boarders living in the same house:
The standard-cost method
The rate for the year ended 31 March 2015
|
Number of boarders |
Standard cost |
|
One or two boarders |
$254 a week for each boarder |
|
Three or four boarders |
$254 each for the first two boarders $208 for each subsequent boarder |
This means that if your income from boarders is less than the standard cost from the table above, you do not have to file a tax return and pay tax on your boarding income.
If you have five or more boarders, you cannot use the standard-cost method. You have to use the actual cost method. You are required to file tax returns and keep records of all income and expenses.
The actual-cost method
Taxpayer can also keep records of actual income and expenses and file tax returns to declare any profit or claim any loss.
Disclaimer: The following answer necessarily sets out general principles only. The facts of particular cases always need to be considered carefully, and it may be necessary to obtain advice from a tax expert.
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