Hi guys,
Looking to rent a 2 bedroom out and host a Korean language learner/Uni student in a room.
Does anyone know what the best practices are for this? I'm still just researching it, but I think there are two options. Put them on the lease (safe and a bit sticky, tricky). Get them to pay their share of the combined rent, no lease signage.
What are the methods of taxing if it's declared as income?
Ideally I'd not want to make it a profit as it'd essentially just being able to find a housemate that can stay with us in a rented 2 bedroom unit. But because my partner is Korean, we'd be able to host Korean students extremely well and would love to do so… but if we have trouble with income and taxes as a result, it won't be worth it.
I'd say you have a pretty good chance of declaring them as a homestay — enjoy the company :)
I noticed that you have to get permission from the Department of Education, does that mean I have to go through a third party who takes a cut of the deal?
I'd rather go through it alone or with the government themselves. :(
@StoneSin: Hmm. Not sure of if that is a hard requirement. Might be worthwhile talking to your accountant!
@rainbow612: I'm not sure yet. But that is fine, yes. Otherwise they will be under 30 and doing the working holiday + study option. I'm not really sure and it doesn't worry me as long as they aren't full adults living with us for a cheap ride.
It depends on the intent e.g., is it to make a profit & under a commercial arrangement, or is the profit negligible & the student a temporary homestay? See:
If it is for profit, then the income is just additional income you declare on your income tax return. You can then also claim deductions to reduce your tax for a portion of the property — see https://www.ato.gov.au/General/Property/Your-home/Renting-ou….
Additionally, just be aware of CGT implications if you own this property i.e., if you do rent out the 2nd room for profit & declare it as income, when you sell your property, you may not be eligible for the full main residence exemption.