Income received by way of rent from residential, commercial or industrial property is assessable income when it is received and includes:
•Bond money only if you derived it because a tenant defaults to pay the rent or due to damage to the property which require repairs
•Insurance payments for loss of rent
•Reimbursement of deductible expenses.
However, rental income excludes:
•Rent due but not paid.
Rental income also excludes money received from a boarder in the following circumstances:
•From a family member as this is considered a domestic arrangement
•From an exchange student, as this is also considered a domestic arrangement
•From a boarder who only pays for expenses that are shared (food, electricity etc). In this case there is no benefit to the owner, which means no assessable income and therefore no deductions.
If the tax payer is running a boarding house then the income is assessable and deductions can be claimed.
NOTE: Do not confuse this with a room/rooms being rented out in a house, which would be assessable income as rent is being paid and there is a benefit to the owner.
You must include the full amount (Gross Rent) you earn in your tax return, not the net amount you receive from the property manager or agent.