Residential Rental Properties FAQ's

The ATO has released frequently asked questions (FAQs) and other information to help you understand your rental property obligations and what information you need to provide in order to lodge correctly.

Many residential rental property owners have had their rental income affected by COVID-19. As a result, you may be wondering what you can claim this tax time.

Question 1 
My tenants are not paying their full rent or have temporarily stopped paying rent because their income has been adversely affected by COVID-19. Can I still claim deductions on my rental property expenses?
Yes. If tenants are not meeting their payment obligations under the lease agreement due to COVID-19 and you continue to incur normal expenses on your property, then you will still be able to claim these expenses in your tax return.

Question 2 
I'm considering reducing the rent for tenants whose income has been adversely affected by COVID-19 to enable them to stay in the property. The tenants are not in default of their rent. Will my deduction for rental property expenses be reduced because of this?
No. If you decide to reduce the rent to enable your tenants to remain in the property (thereby maximising your rental return in a changed rental market), your deduction for rental property expenses will not be reduced.

Question 3 
 If I receive a back payment of rent or an amount of insurance for lost rent, is this amount assessable income?
Yes. These amounts should be declared as income in the tax year in which you receive the amounts.

Question 4 
If the bank defers loan repayments for a period of time as a result of COVID-19, can I continue to claim interest on the loan as a deduction?
Yes. If interest continues to accumulate on your loan, it will be an expense that you have incurred and is therefore deductible. Interest remains deductible on the loan even if the bank defers the repayments.

Question 5 
Can I access the new instant asset write-off for my property?
No. If you are a property investor, you cannot access the instant asset write-off deduction.

For more information on COVID-19 FAQ's please visit the ATO website or contact our office. 

The Money Edge | Bundaberg 

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