Homeowners can share their homes in various ways—whether by renting out a room, offering short stays through platforms like Airbnb, charging a friend for temporary accommodation, or receiving board from family members such as university students. These arrangements can impact your taxable income and the expenses you can claim at tax time, so it’s essential to keep records and know what to declare. This article focuses on immediate tax considerations only. However, future implications, such as capital gains tax and potential effects on Centrelink benefits, should also be considered.

Rental Income and Expenses

Whether you rent out your entire home or just a part of it (like a room or a granny flat), you’ll need to declare the rent received as income when lodging your tax return. All rent or associated payments, such as bond money or cancellation fees, are considered assessable income. This applies regardless of the arrangement’s duration, from a single-night Airbnb booking to a long-term rental agreement.

You may be able to claim immediate deductions for certain rental-related expenses, such as advertising to attract tenants, repairs and maintenance, and purchasing assets below a specific value for the rental. Other deductions, like those for depreciating assets, must be claimed over time. However, you can only claim rental expenses for periods when your home is actually rented or genuinely available for rent. If only a part of your home is rented, only expenses related to that specific part are deductible.

Domestic Arrangements

If friends or family members stay in your home and pay you for food and accommodation (often called “board and lodging”), this is generally considered a domestic arrangement rather than a rental. In such cases, the payments don’t need to be declared as income on your tax return, and you also can’t claim tax deductions for expenses related to having them stay.

However, be careful: if you have a home-sharing arrangement with friends or family where you’re making a profit or if the arrangement resembles a standard commercial rental, calling it “board and lodging” won’t be enough to avoid tax implications. In such situations, it’s best to seek professional advice to ensure you comply with tax regulations.