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You can deduct your rental expenses from your rental income amount. The amount left is your net rental income. This is the amount you put on your annual tax return.

Get your rental accounts ready

These are the rental expense records you kept over the income year.

Work out your net rental income

Take your rental expense amount from your rental income to get your net rental income.

Use the net rental income for your tax return

If your net rental income shows a profit, it gets added to the rest of the taxable income in your tax return.

A net rental income loss lowers the income you will pay tax on.

Fill in the IR3R and attach to your tax return

You’ll need to use a separate rental income schedule (IR3R) for each rental property.

Copy and attach to your tax return

Make a copy of all IR3Rs. Attach them along with your records to page 3 of your tax return.

What happens next

You need to pay provisional tax if your income tax is more than $2,500 at the end of the tax year.