Granny flat income

Question from Greg updated on 22nd January 2013:

We have a separate one bedroom, self contained 'granny flat' on our property (it doesn't have an oven). We currently rent it out for $190 a week. Do we need to declare this income?

Our expert Mark Withers responded:

Yes, you must declare the income where you are letting a flat attached to your home. You can choose one of two methods to determine the expenses you can claim. Either keep a recoprd of the actual expenses for the flat or keep a record of the entire costs of holding the property and apportion these based on the percentage by area rented out.

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

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