renting rooms out in my house.

Hey got a question for tax people.

Before everyone says its illegal and tax evasion im not doing it yet just asking the question.

I have two spare rooms available in my house and im currently living there. I have two mates looking for a place to live where I could rent out a room for 150 each direct debited into my bank. Would the tax man catch on to this ? or is cash in hand better.

If so how is this any different from me transfering my mum weekly board when I lived there.

I read the Smh article where lots of people do this but cgt and finds apply if caught out.
 
I'm not an accountant, Trey, but I reckon you paying your mum board would be viewed more as a 'domestic arrangement'. She would also have been cooking you meals and probably washing your clothes. (I bet she even made your bed occasionally.)
Renting rooms to mates for $300 pw combined is more of a commercial arrangement - unless you're going to cook for them and do their washing and make their beds.
 
I'm with depreciator on this one.

How would the ATO find out ?? Friends fall out. Or someone dobs you in...Like the mate's GF who hates your guts and reckons you broke them up. Then you have a whole hell of a mess. And a CGT issue when you sell too.
 
The only way I can see you getting away with it is with no paper trail. No written contracts etc. and all rent paid as physical cash in hand. The argument for doing it legitimately is good conscience and as someone on the forums pointed out to me, partial depreciation of a bunch of household items.
 
The only way I can see you getting away with it is with no paper trail. No written contracts etc. and all rent paid as physical cash in hand. The argument for doing it legitimately is good conscience and as someone on the forums pointed out to me, partial depreciation of a bunch of household items.

Perhaps negative gearing after share of costs are factored in. And non-cash deductions like Depn and cap allowances. etc.
 
Perhaps the solution is to not try to get away with it. Declare the income, claim the tax deductions, pay the CGT at some future point. Do it above board.

As a bonus the rental income will even assist you in your affordability for future IP purchases.
 
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