Hi,
If I take in a lodger/boarder for a short period of time, do I pay tax on the rent he pays?
At the time I am not claiming any deductions for him/her being there, it is the family home and I am still living there also?If you declare the income, then you may be able to claim your expenses but you may also be open to cgt.
Ditto what Scott said.
I have a boarder (own a 2brm unit) and so I declare his rent but I also claim half of all my property expenses. Nice way to get some tax effectiveness from my PPR and legitimately reduced my tax.
In your case, if it's for a short period only and you don't intend to repeat it in the future then the extra bookkeeping might not be worth it but put simply, I would always declare it.
Hope that helps,
AndyYes it will reduce your expenses on your ppor by offsetting some of the expenses but unfortunately will open up the PPOR to possible Capital Gains Tax issues.
Richard Taylor | Australia's leading private lender
Whether the "rent" is income or not will depend on if the boarders are paying for rent of the room – or just contributing to household expenses. see para 17 of TR 2167.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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