What counts as rental income
The ATO's list of rental income is wider than the weekly rent. It includes:
- payments from renting part or all of a property, including short-term rentals on sharing platforms
- bond money you keep for unpaid rent or damage
- cancellation fees for bookings
- insurance payouts for lost rent or damage
- tenant reimbursements, for example for repairs
- payments received in goods rather than cash, at their dollar value
Rent is declared based on your legal ownership share. Foreign residents who buy Australian property need a tax file number and an Australian tax return to report the rent and any later capital gain.
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How much tax
For a full year as a foreign resident the scale is 30c per $1 up to $135,000, then 37c per $1 from $135,001 to $190,000, then 45c per $1 above $190,000. The 2026-27 foreign resident rates guide shows the table and the part-year rules. Foreign residents do not pay the Medicare levy.
Worked example. A foreign resident owns an apartment alone and has no other Australian income.
- Rent received in the year: $36,000.
- Deductible expenses in the year: $14,000.
- Net rental income: $36,000 - $14,000 = $22,000.
- Tax: 30% x $22,000 = $6,600.
An Australian resident with the same $22,000 and nothing else would be taxed on the amount above $18,200 at 15% in 2026-27: 15% x ($22,000 - $18,200) = 15% x $3,800 = $570, before any Medicare levy.
Who declares what share
The ATO says you declare rental income according to your legal ownership. Its examples show the effect:
- Joint tenants each include half of the income and half of the expenses.
- Tenants in common split by their legal interests. At 75% and 25%, one owner includes 75% of the income and expenses and the other includes 25%.
- A partnership carrying on a business of letting divides profit or loss by the partnership agreement instead.
So two foreign resident joint tenants on the $22,000 above each declare $11,000 and each pay 30% x $11,000 = $3,300. The combined $6,600 equals the sole-owner result, because the 30% rate applies to the first $135,000 of each person's taxable income.
Is tax withheld from the rent?
The ATO's pages on foreign resident withholding list payments for entertainment and sports activities, construction work and casino gaming junkets. Rent is not on those pages. Rent is taxed through your assessment after you lodge a return. If a property manager says an amount is being held back from your rent, ask which law applies and check with the ATO or a registered tax agent. A separate rule withholds 15% from the sale price when a foreign resident sells. That is covered in selling from overseas.
Rental losses
When deductible expenses, including loan interest, exceed rent, the ATO says the net rental loss may reduce your other assessable income. If your other income cannot absorb the loss, you can carry it forward to the next income year. A foreign resident declares Australian-sourced income in the return, so in practice the income available to absorb a loss is other Australian-sourced income. What can be deducted is in the deductions guide.
Lodging a return from overseas
The ATO says the normal lodgment period is 1 July to 31 October. The easiest route from overseas is myTax with a myGov account linked to the ATO. Alternatives are a registered tax agent, a paper return or someone acting under power of attorney. A refund needs an Australian bank account. The ATO says rental property records should be kept for 5 years, which in the usual case runs from the date you lodge, in English or readily translatable into English, on paper or digitally.
Surcharge land tax
Some states charge extra land tax to owners they classify as foreign persons or absentees. The ATO's rental guide says some people living overseas may be charged surcharge land tax, and that because it is imposed on an individual basis it may not apply to every co-owner. See whether expats pay the foreign buyer surcharges.
Keep reading
- Foreign resident tax rates for 2026-27: what the ATO charges non-residents
- Tax deductions for non-resident landlords: what you can and cannot claim
- Do Australian expats pay the foreign buyer stamp duty and land tax surcharges?
- Double tax agreements and Australian property: how treaties treat rent and sale gains
- Australian tax residency tests explained: are you a resident or a foreign resident?
- HECS-HELP repayments when living overseas: what the ATO requires and what it means for a home loan
Frequently asked questions
Do I pay Australian tax on rent if I am an Australian citizen living overseas?
Yes. Rent from an Australian property is Australian-sourced income whatever your citizenship. What changes with residency is the rate table. A citizen who is a foreign resident for tax pays from the first dollar at 30%, while a resident gets the tax-free threshold.
Do I need an Australian tax file number?
The ATO says foreign residents who acquire Australian property need to apply for a tax file number and file Australian tax returns reporting rental income and any capital gains. The return is how the tax on the rent is assessed, because the ATO's foreign resident withholding pages do not list rent among the payments withheld at source.
Does the tax-free threshold apply to my rent?
No. The ATO says a foreign resident has no tax-free threshold, so net rent is taxed from the first dollar at 30%. In a year you change residency, a pro-rata threshold can apply for the months you were an Australian resident: $13,464 plus ($4,736 divided by 12, multiplied by the months resident, counting the month you left), according to the ATO.
What if my home country also taxes the rent?
Your home country may tax the same rent under its own rules. Treaties and home-country credits address that. In the UK convention, for example, the UK gives a credit for Australian tax. The treaty with your country, if there is one, and your home country's filing deadlines are the things to check. See double tax agreements and Australian property.
Sources
- Owning real property in Australia, Australian Taxation Office
- Rental properties guide 2026: rental income, Australian Taxation Office
- Rental income you must declare, Australian Taxation Office
- Rental properties guide 2026: other tax considerations, Australian Taxation Office
- Rental properties guide 2026 (NAT 1729), Australian Taxation Office
- Tax rates: foreign residents, Australian Taxation Office
- Foreign resident PAYG withholding, Australian Taxation Office
- Lodge your tax return from outside Australia, Australian Taxation Office
- Records for rental properties and holiday homes, Australian Taxation Office
Checked 7 October 2026.
Expat Finance is an independent guide. It is not a lender, mortgage broker or credit provider, it does not hold an Australian credit licence, and it does not give credit, legal, tax or migration advice. It is not affiliated with any bank, the ATO or the Foreign Investment Review Board. General information only, not legal, tax, migration or financial advice.