Tax concerns deter renting out spare rooms in Australia — ABC News Australia

In Brisbane, Australia, homeowner Ali Bradley is putting off plans to rent out spare rooms at an affordable price because of potential tax consequences and complex regulations. The woman, whose children are leaving home, has several vacant rooms and would like to provide affordable housing, ABC News Australia reports.

Bradley said she is not seeking to make money from such accommodation. According to her, residents' contributions could help her cover the substantial costs of maintaining an old house. At the same time, she is concerned about expenses, income tax, possible capital gains tax implications and complex rules.

Taxes and safety

Property economist and Queensland University of Technology lecturer Lyndall Bryant is studying barriers faced by homeowners who could take in lodgers. According to her, this form of accommodation used to be more common among students and apprentices moving to large cities.

Bryant said homeowners are primarily concerned about income tax, capital gains tax and the possible impact on their pension. Some people are also worried about safety and security when an unfamiliar person lives in their home.

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The Australian Taxation Office explained that some living arrangements are not taxed, including those involving children or close relatives. The agency noted that such cases generally differ from situations in which a room is offered for rent to an unfamiliar person.

Calls for clear rules

Census data indicate that there could be up to 13 million spare bedrooms in the country. Bryant cited examples of overseas schemes encouraging homeowners to take in lodgers, including the possibility of setting a tax-free threshold for affordable room rentals.

Rosie Lon, chair of the Shared Living Alliance Australia and New Zealand, called on state authorities to provide homeowners and lodgers with clear information about their legal protections. In Queensland, lodgers and residents renting rooms are generally not covered by standard residential tenancy legislation if the homeowner lives in the house and rents out no more than three rooms. Queensland's Department of Housing and Public Works said it is not currently considering changes to the rules governing such arrangements.