We own the rental together. How do we split the rent and expenses?
For most co-owners, rent and expenses are split by your legal share of the property, as shown on the title. Who paid the bills, or a private agreement to split it another way, makes no difference for tax. The main exception is interest on a loan you took out yourself to buy your own share, which you claim in full.
The short version
- Ben and Aisha each report a $1,000 loss, even though Aisha paid every bill.
- Each claims all the interest on their own loan, while rent and other costs still follow the 50/50 title.
- The ATO says income and expenses follow legal interest despite any agreement between co-owners, spoken or written. A different split by agreement has no effect for income tax.
You bought the rental together. One of you earns more, so it seems sensible to put more of the loss on that person's return. Or one of you pays every bill from their account, so surely they claim them?
It is a really common assumption, and it trips up a lot of couples. The ATO's rule is simpler than people expect, and it doesn't care who tapped the card.
Your share on the title decides it
If you own a rental with someone else and you aren't running a rental property business, you split the income and the expenses in line with your legal interest in the property.
There are two common ways to hold a property together:
- Joint tenants: you each hold an equal interest. Two owners means 50% each.
- Tenants in common: you can hold unequal shares, for example 70% and 30%, or 20% and 80%.
Your title or contract of sale shows which one you have. If you aren't sure, check those documents or ask the conveyancer or solicitor who handled the purchase.
Who paid doesn't matter
Worked example
Ben and Aisha, joint tenants in Newcastle
Example only. Ben and Aisha own a rental as joint tenants, so 50% each. In the year, rent is $30,000, interest on their joint loan is $24,000 and other costs are $8,000. Aisha earns more and paid every bill from her account. Example only.
| Step | Sum | Result |
|---|---|---|
| Each owner's rent | $30,000 x 50% | $15,000 |
| Each owner's interest | $24,000 x 50% | $12,000 |
| Each owner's other costs | $8,000 x 50% | $4,000 |
| Each owner's net result | $15,000 minus $12,000 minus $4,000 | $1,000 loss each |
Ben and Aisha each report a $1,000 loss, even though Aisha paid every bill.
Putting the whole $2,000 loss on Aisha's return because she earns more is not allowed.
This feels unfair to the person who did all the paying, and that is a real conversation to have at home. But it is a conversation about your household money, not about tax. For tax, the title wins.
What goes on each tax return
Each owner reports their own share of the property on their own return. That means their share of the gross rent and their share of each expense, not a single net figure, and not the amount that landed in the joint account.
So for a 50/50 property, each of you shows half the rent, half the council rates, half the insurance, half the agent's fees and half of any repairs. Your share of capital works and depreciation follows the same percentage too.
If you use different tax agents, give them both the same totals. Returns that don't match each other are an easy thing for the ATO to spot.
Unequal shares
Tenants in common with unequal shares do exactly the same thing, just with different percentages. Every line, rent, interest and every other cost, goes through the same split.
Notice the total result is the same in every column. The split just decides how much of it lands on each tax return.
The interest exception
Interest is the one cost that can follow the person, not the title. If you borrowed money to buy your own interest in the property, you can claim all the interest on your loan. You don't split it with the other owners.
Borrowing expenses work the same way. They are claimed by the owner who incurred them.
Worked example
two separate loans
Example only. Priya and Sam own a rental as joint tenants. They each took out their own loan to buy their own half. Priya's interest for the year is $14,000 and Sam's is $10,000. Example only.
| Step | Sum | Result |
|---|---|---|
| Priya's interest claim | Her own loan, not split | $14,000 |
| Sam's interest claim | His own loan, not split | $10,000 |
| Rent and other costs | Split 50/50 by the title | Half each |
Each claims all the interest on their own loan, while rent and other costs still follow the 50/50 title.
It gets harder when the loan and the title don't match, for example a joint loan but one name on the title. The ATO has an example where a sole owner claims 100% of the interest on a joint loan, supported by a written agreement and repayments made from her own account. Situations like this are worth checking with a registered tax agent, because the paperwork matters.
Can we change the split?
Not just by deciding to. Changing the shares means one owner transferring part of their legal interest to the other. That is a property transaction, and it can come with stamp duty and capital gains tax questions. Talk to a solicitor and a registered tax agent before doing it.
There are also very limited cases where the ATO accepts that the real (equitable) ownership is different from the title, and cases where owners genuinely carry on a rental property business as partners. Both are uncommon for people with one or two rentals.
The money talk at home
The tax rule settles who reports what. It doesn't settle what feels fair between the two of you. If one partner is paying more of the rental's costs, that is worth talking about openly instead of letting it simmer.
Some couples agree that whoever pays more of the property costs pays less of the household bills. Others top up the rental account in the same shares as the title. Either is fine, as long as you both agree and the tax returns still follow the title.
Keeping joint records simple
- Record every rent payment and every cost once, at the full amount.
- Apply each owner's percentage to the totals at the end of the year.
- Keep any loan that belongs to one owner on its own line, so the interest isn't split by mistake.
- Give each owner's tax agent the same totals and the split, so both returns match.
This is general information. If your situation has a twist, like a loan in one name or a family member on the title, check with the ATO or a registered tax agent.
Key numbers
| What | Figure and source |
|---|---|
| Joint tenants hold equal interests | Equal ATO |
| Tenants in common may hold unequal interests | Unequal, e.g. 20% and 80% ATO |
| Split by legal interest | Legal interest ATO |
| Side agreements ignored | No effect ATO |
| Own loan for own interest | Claim all interest ATO |
| Equitable interest exception | Very limited ATO |
Free official help
- ATO: Rental income, co-ownership of rental property
The ATO rules for splitting income and expenses between co-owners, with examples. - ATO: Interest expenses
How interest is claimed, including joint loans and loans for your own share. - ATO: Rental properties guide 2026
The full ATO guide to rental income and expenses. - ATO: Negative gearing and CGT reform
The ATO summary of the changes that start on 1 July 2027.
Questions people ask
Can we put all the rental loss on the higher earner?
Not if you own it jointly. Income and expenses follow each owner's legal interest, and an agreement to split it differently has no effect for tax.
I paid all the expenses. Can I claim them all?
No. For co-owners, costs are split by your share on the title, whoever paid them.
What if only one of us is on the loan?
Interest on a loan you took out to buy your own interest is claimed in full by you. Where the loan and title don't match, get advice from a registered tax agent.
How do I know if we are joint tenants or tenants in common?
Check your title or contract of sale, or ask the conveyancer or solicitor who did the purchase.
Get the free pay check sheet
Type in one fortnight's pay and bills and see where it all goes. Works in Excel and Google Sheets.
Keep reading
- Positive vs negative gearing: what it actually means for your tax and your bank account
7 min read
- The 2027 negative gearing and CGT changes: what's law, and does it affect my rental?
8 min read
- Is it a repair or an improvement? What can I claim straight away on my rental?
7 min read
- How do we split bills fairly when one of us earns more?
6 min read
- All landlords guides
Sources
- Rental income, Rental properties guide 2026, ATO. https://www.ato.gov.au/forms-and-instructions/rental-properties-2026/rental-income, accessed 2026-10-16.
- Interest expenses, ATO. https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/rental-expenses/interest-expenses, accessed 2026-10-16.
- Rental properties guide 2026, ATO. https://www.ato.gov.au/forms-and-instructions/rental-properties-2026, accessed 2026-10-16.
- Tax reform: Boosting home ownership: Reforming negative gearing and capital gains tax, ATO. https://www.ato.gov.au/about-ato/new-legislation/in-detail/individuals/tax-reform-boosting-home-ownership-reforming-negative-gearing-and-capital-gains-tax, accessed 2026-10-16.
- Treasury Laws Amendment (Tax Reform No. 1) Act 2026, Federal Register of Legislation. https://www.legislation.gov.au/C2026A00049/asmade/text, accessed 2026-10-16.