Renting a room to my brother in ppor

[gldsaucer]

Hi I am currently renting a room in my 2 bedroom unit to my brother. I am living in the property as well. Can I claim any tax deductions? I tried to search ATO website but could find a satisfactory answer.

 

[wobbycarly]

You want to be careful.

Sure, you can claim deductions, BUT:

• You will also need to lodge your income
• You will affect the CGT-free status of your PPOR

These 2 things might put you in a worse financial position than if you just "take the cash". Assuming you don't have a formal lease in place, generally, it's simpler and neater, to simply take some 'board' from your roommate - no deductions, no additional income, no CGT implications.

Hope this makes sense - it's been covered here a few times, so I've just summarised.

 

[AlmostBob]

Payments from a family member for board or lodging are considered to be domestic arrangements and are not assessable income. In these situations you also can't claim income tax deductions

http://www.ato.gov.au/corporate/content.aspx?menuid=0&doc=/content/00262404.htm&page=10#P291_19653
and
http://law.ato.gov.au/atolaw/view.htm?docid=ITR/IT2167/NAT/ATO/00001

 

[pennyk]

I agree... having a 'boarding' arrangement would usually make more sense than rental in this contex.

 

[Jamie M]

I agree with the guys above. Prob best to treat it as a private arrangement whereby your brother "boards" with you. Perhaps talk to an accountant and get them to crunch the numbers for you.

Cheers

Jamie

 

[gldsaucer]

Makes sense then thinking about cgt..Thanks guys..

 

[Aaron_C]

Just get him to pay you cash and be done with it. Don't overcomplicate it with CGT proportioning blah blah blah.