Do I have to pay tax on peer-to-peer rental income in Australia?

Yes. The ATO considers income from renting personal items to be assessable income. You must declare it in your tax return, even if it is a small amount. However, you can offset it with legitimate deductions.

Do I need an ABN to rent out my items?

An ABN is not legally required for occasional rental income, but it is recommended if you earn regularly. Without an ABN, some payers may withhold 47% of payments. An ABN is free to register via the Australian Business Register.

When do I need to register for GST?

You must register for GST when your total business turnover (including rental income from all sources) reaches $75,000 in a 12-month period. Below that threshold, GST registration is voluntary.

What deductions can I claim against rental income?

You can claim depreciation on items, repair costs, insurance, platform fees, cleaning, delivery expenses, storage costs, and photography expenses. Keep receipts for everything and only claim the rental-use portion of shared items.

How do I calculate depreciation on my rental items?

Use the ATO's effective life determinations to find how long each asset type is expected to last. Divide the purchase price by the effective life to get the annual depreciation amount. For example, a $1,500 power tool with a 5-year life depreciates at $300 per year.

Can I claim a home office deduction for managing rentals?

If you use a dedicated area of your home to manage your rental business — listing items, communicating with renters, managing bookings — you may be able to claim a portion of home running costs. The ATO's fixed-rate method simplifies this calculation.

What happens if I do not declare my rental income?

The ATO uses data matching to identify unreported income, including payments from sharing economy platforms. Penalties for non-disclosure range from 25% to 75% of the tax shortfall, plus interest. It is always better to declare and claim deductions.

Should I use a tax agent for my rental income?

If your rental income is significant or you have complex deductions (depreciation, vehicle use, mixed personal use), a registered tax agent is worthwhile. Their fee is also tax-deductible. For simple cases, myTax (the ATO's free online tool) is sufficient.

Understanding Tax on Peer-to-Peer Rental Income

Everything Australian renters and owners need to know about declaring rental income, claiming deductions, and staying on the right side of the ATO.

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Is Rental Income Taxable?

This is general information only, not tax advice. Consult a registered tax agent for your specific situation.

Yes. In Australia, income earned from renting out personal items through peer-to-peer platforms like iRentMy is assessable income. The ATO requires you to declare this income in your annual tax return, regardless of the amount.

The good news is that you can claim deductions for expenses directly related to earning that income — including depreciation, repairs, insurance, platform fees, and more. For many rental owners, deductions significantly reduce the net taxable amount.

Since July 2023, sharing economy platforms are required to report transaction data to the ATO. This means the ATO already knows about your rental income, making accurate reporting essential.

Income Thresholds & GST

Rental income is added to your other income and taxed at your marginal rate

Total Income Bracket	Marginal Rate	GST Required?	ABN Needed?
Under $18,200	0%	No	Optional
$18,201 - $45,000	16%	No (if total turnover < $75k)	Recommended
$45,001 - $120,000	30%	No (if total turnover < $75k)	Recommended
$120,001 - $180,000	37%	Required if turnover >= $75k	Required
Over $180,000	45%	Required if turnover >= $75k	Required

Deductions You Can Claim

Reduce your taxable rental income with these legitimate expenses

Depreciation

Claim the decline in value of your rental items over their effective life. A $2,000 camera with a 5-year effective life can be depreciated at $400 per year, reducing your taxable rental income.

Repairs and maintenance

Costs to repair or maintain items in rentable condition are fully deductible in the year incurred. Replacing a broken drill chuck or fixing a tent zipper counts as a repair.

Insurance premiums

Any insurance you purchase specifically to cover your rental items — including platform protection fees — is deductible against your rental income.

Platform fees and commissions

The service fees charged by iRentMy or any rental platform are a direct cost of earning rental income and are fully deductible.

Cleaning and preparation costs

Professional cleaning, sanitising, and preparation costs between rentals are deductible. This includes cleaning products, laundry, and detailing supplies.

Delivery and transport

If you deliver or collect items for renters, the associated fuel, tolls, parking, and vehicle running costs are deductible. Keep a logbook if you use your personal vehicle.

Storage costs

Rent paid for a storage unit or dedicated space to house rental items is deductible. A portion of home storage may also qualify if you use a dedicated room or area.

Photography and listing costs

Costs to photograph your items, create listings, or advertise your rentals are deductible. This includes camera hire, props, and any paid promotion on the platform.

Record Keeping Requirements

Good records make tax time painless and protect you in an audit

Income records

Keep records of every rental payment received, including dates, amounts, and the renter's details. Platform payment summaries count as records.

Expense receipts

Save receipts for all deductible expenses — repairs, cleaning, delivery, insurance, and platform fees. Digital copies are accepted by the ATO.

Depreciation schedules

Maintain a list of all rental items with purchase dates, prices, effective life, and annual depreciation amounts. Use the ATO's effective life tables as a guide.

Vehicle logbook

If you use your car for deliveries, keep a logbook for at least 12 continuous weeks to establish the business-use percentage. Revalidate every 5 years.

Bank statements

Ensure rental income is easily identifiable in your bank records. A separate bank account for rental income simplifies bookkeeping significantly.

Retention period

The ATO requires you to keep records for 5 years from the date you lodge the tax return they relate to. Store digital copies securely as backup.

Tax-Smart Strategies for Rental Owners

Legal ways to minimise your tax on rental income

Prepay expenses before 30 June

Bring forward deductible expenses like insurance renewals, repairs, or cleaning supplies into the current financial year to reduce your taxable income this year.

Instant asset write-off

Assets costing less than the instant asset write-off threshold can be fully deducted in the year of purchase rather than depreciated over multiple years. Check the current threshold on the ATO website.

Split income with a partner

If you co-own rental items, you can split the income and deductions proportionally. This can be beneficial if one partner is in a lower tax bracket.

Keep personal and rental use separate

If you use an item both personally and for rental, you can only claim the rental-use proportion of expenses. Track usage days carefully to support your claim.

Consider an ABN for serious earners

An ABN is free and simplifies invoicing, GST reporting (if applicable), and professional dealings. It also avoids the no-ABN withholding tax that some payers may apply.

Frequently Asked Questions

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