Working out tax

Question from David updated on 4th September 2019:

I'm just wondering how I would work out tax payable on my property? I am living in the three bedroom house at the front and renting the self contained one bedroom unit at the back. Would I split the it by the total coverage on the property or 75/25 percentage based on number of rooms?




Our expert Matthew Gilligan responded:

I think the better means of apportioning the expenditure incurred in relation to the property would be by looking at the relative total areas, rather than the number of bedrooms. I think this would be a more reasonable basis for allocating expenditure like interest, insurance, and rates etc.

Matthew heads GRA's specialist property and asset planning division. He helps clients create optimal tax structures and build wealth through property. He has an extensive buy-to-hold property portfolio, is currently involved in over a dozen developments, and is author of two books - Property 101 and Tax Structures 101.

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