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 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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