How is rental income taxed when a property is jointly owned?
Understand how joint owners split rental income and deductions for tax purposes.
Summary
When a rental property is jointly owned, each co-owner generally declares their share of rental income and claims their share of deductible expenses according to their legal ownership interest.
What this means
For co-owners who are not carrying on a rental property business, rental income and most expenses are generally divided according to legal ownership. Joint tenants usually have equal interests, while tenants in common can have different ownership percentages.
Interest can depend on who borrowed and what the borrowed money was used for. For example, if one co-owner borrows solely to acquire their own interest in the property, the interest on that borrowing may belong to that co-owner rather than being divided equally. Separate rules about the use of residential rental losses are scheduled to change from 1 July 2027 for some established properties acquired after 7:30 pm AEST on 12 May 2026; those reforms do not change the basic ownership rule for allocating rental income.
Typical actions
- Confirm whether the property is held as joint tenants or tenants in common.
- Identify each owner’s legal interest percentage.
- Split rental income and expenses according to legal ownership.
- Claim your own loan interest in full if you borrowed for your share only.
- Keep title records and loan documents to support the split.
Official sources
Last checked: 25 August 2026
myTax 2026 Rent
myTax instructions for rental income, including co-ownership.
Budget 2026–27 tax system changes
Treasury explains the negative gearing changes scheduled from 1 July 2027 and the grandfathering rules.
Related questions
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- How does capital gains tax work?
- What records should investors keep for CGT?
- What is cost base for CGT purposes?
Important notice: Tax Clarity is an independent information tool. This page provides general information based on official sources. It does not provide tax, legal, financial, or accounting advice. Tax rules can change, and how they apply depends on your circumstances. For advice about your situation, speak with a registered tax agent or qualified professional.
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