Income from boarders and lodgers 108-05040010

Scenario: George has a mortgage with a balance of $50,000 and is currently paying 8% interest. George receives $80 per week for providing accommodation and breakfast for Steve.

Step 1: Calculate income received per annum

• Calculation: $80 per week X 52
• Result: $4,160 p.a.

Step 2: Calculate % of income assessable

• Calculation: 50% of income received
• Result: $2,080 p.a.

Step 3: Deduct mortgage interest customer pays

• Calculation: $50,000 @ 8%
• Result: $4,000 p.a.

Step 4: Calculate assessed income

• Calculation: (result of Step 2) minus (result of Step 3)
• Result: Nil income assessed

If the assessable income for board and/or lodging that George received was greater than the mortgage interest paid, only the difference between the two amounts would be assessed as income.

Scenario: Susan receives $50 per week for providing accommodation and all meals to a friend, Jan (full board and lodging). Susan rents the home for $65 per week.

Step 1: Calculate income received per annum (p.a.)

• Calculation: $50 per week X 52
• Result: $2,600 p.a.

Step 2: Calculate % of income assessable

• Calculation: 20% of income received p.a.
• Result: $520 p.a.

Step 3: Deduct rent customer pays

• Calculation: $65 per week X 52
• Result: $3,380 p.a.

Step 4: Calculate assessed income

• Calculation: (result of 2 minus 3)
• Result: Nil income assessed

If the assessable income for board and/or lodging that Susan received was greater than the rent paid, only the difference between the two amounts would be assessed as income.

Scenario: Taylor rents a room of their principal home (owned outright with no mortgage) one weekend each year through Airbnb while a local festival is held. Other than this weekend, the room is not rented and does not attract an income. The room is listed for $100 per day during the weekend and is lodging only with no meals provided.

Step 1: In order to record the income on OINS, determine the income amount over an appropriate frequency

• Calculation: $100 per day X 7 days
• Result: $700 per week

Step 2: Calculate % of income assessable

• Calculation: 70% of income received per week
• Result: $490

Step 3: Record on OINS using the determined frequency. In this example, 1WE. The date of event will be the first day the room/dwelling is occupied

Step 4: Cease OINS entry from the last day the room/dwelling was occupied + 1

As the income is assessed on a daily rate, only $70 per day will be assessable income over the 2 days of the weekend.