Private ruling: Rental income - private arrangement
Date of advice: 8 November 2021
Published: January 2022
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the arrangement between you and family members to occupy the property considered to be a private arrangement? | A1: Yes. Your circumstances meet the criteria outlined in Taxation Ruling IT 2167 and is considered to be a private or domestic arrangement in nature. You are not required to lodge a rental schedule in your income tax return.

Relevant facts and circumstances: You own your main residence jointly. In YYYY, you subdivided your main residence and built another residential property (the property). You currently own the property jointly. Your family members (the occupants) moved into the property after its completion, and they have resided at the property since completion. The main purpose of subdividing your main residence and building the property was to provide the occupants a place to live and for them to eventually purchase the property off you once they had a better financial situation. You do not have an income producing intention for the property. The occupants have not yet begun to make arrangements to purchase the property off you as they are waiting to be in a more financially stable position before applying for a loan. You currently have a home loan with a bank for the property in your name as co-borrowers. The mortgage repayments are met by the occupants as if the mortgage was their own. This includes both principal and interest. The occupants deposit the funds directly into the mortgage by EFT transfer from their personal bank account. Your name appears on the water, rates, and house insurance. The occupants name appears on the electricity and gas accounts. The occupants pay for all the utility expenses themselves directly to the utility provider. The occupants are solely responsible for the repairs and maintenance of the property and pay for all the associated expenses.

Relevant legislative provisions: Income tax Assessment Act 1997 Section 6-5