Rental and other rental-related income is the full amount of rent and associated payments that you receive, or become entitled to, when you rent out your property, whether it is paid to you or your agent. You must include your share of the full amount of rent you earn in your tax return.
What happens if Rental Bond is retained in case of tenant default or damage caused to property by the tenant?
You must include rental bond money as income if you become entitled to retain it, for instance, because a tenant defaulted on the rent, or because of damage to your rental property requiring repairs or maintenance.
In case of commercial rent, if landlord becomes entitled to rental bond then the amount will be inclusive of GST (if landlord is registered for GST) and GST liability will arise as a result.
What if you received an insurance payout?
If you received an insurance payout, there may be situations where the payout needs to be included as income, for example, if you received an insurance payment to compensate you for lost rent.
What If you received a reimbursement or recoupment for deductible expenditure?
If you received a reimbursement or recoupment for deductible expenditure, you may have to include an amount as income. For example, if you received an amount from a tenant to cover the cost of repairing damage to some part of your rental property and you can claim a deduction for the cost of the repairs, you need to include the whole amount in your income.
Contact Expert Tax on 0449 952 855 or 1300 869 829 for tax related matters.