Private ruling: Rental property expenses
Published: July 2011
Ruling period: Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012
Date scheme commenced: 1 July 2008

Ruling: Q1: Are you entitled to a deduction for 100% of expenses on a rental property which is jointly owned? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 6-5

Reasons for decision: Summary: Co-owners of rental property generally hold the property as joint tenants or tenants in common. The income and loss from a rental property must be shared in the proportion of ownership. Taxation Ruling TR 93/32 states that the net income or loss from a rental property must be shared according to the legal interest of the owners, except in those very limited circumstances where there is sufficient evidence to establish that the equitable interest is different from the legal title. A person's legal interest in a property is determined by the legal title to that property under the land law legislation in the State or Territory in which the property is situated. The legal owner of the property is recorded on the title deeds for the property issued under that legislation. You are currently funding all of the outgoings of the property yourself, as your spouse does not work. While we accept that you are paying all of the expenses relating to the property, this does not mean that the equitable interest in the dwelling is different from the legal interest. Therefore, you must include both the rental income received and outgoings spent according to your percentage of ownership as stated in the title deed of the property.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: You and your spouse jointly own a rental property. | Your spouse does not work. Therefore, you pay for all of the expenses relating to the property.