When you own a residential rental property, the tax you pay depends on whether you are an investor or dealer in residential rental property as dealers are taxed more heavily.
Rental property investors generate ongoing rental income, without any firm intent of resale, while property dealers/speculators buy property intending to sell it and have established a regular pattern of buying and selling property.
In this article we focus on the first category – rental property investors.
Rental income and paying tax
If you're charging rent, you may need to pay tax on the rental income you earn in the same year you receive it. Your rental income could be from a house, land, caravan, sleep-out, building, holiday home or room in your own home.