By Varun Agarwal, co-founder of PropRetire · Published 13 Nov 2026 · Law as read 13 Nov 2026 · 2 min read

Own a rental with your partner? How the rent and the loss split

You and your partner bought a rental together, and one of you earns a lot more. Can the higher earner take more of the loss?

No. Owners who are not running a rental business split the rent and the costs by their share on the title, whoever earns more or pays the bills. An agreement between you doesn't change that.

By each owner's legal interest, as the title deed shows it. Joint tenants each hold an equal share, so each declares half the rent and claims half the costs, and so half of any loss.

Owning a rental together is a partnership for income tax, but not a partnership at law, so a partnership agreement doesn't move the split. That is the ATO's ruling TR 93/32, paragraphs 3 to 6, and TR 2026/1, paragraphs 22, 26 and 52.

Not while the title says half each. In the ATO's own example, Laura and Wendall own a rental as joint tenants. Laura earns $167,000 a year and Wendall $31,000, and an agreement they drew up gives her 80% of any loss.

The ATO's answer is that each includes half the income and half the costs, even if Laura pays most of the bills. An agreement to split it any other way "has no effect for income tax purposes", as its Rental properties 2026 guide says.

Then the split follows those shares. Tenants in common can hold any shares the title records. If Laura's were 75% and Wendall's 25%, she would include 75% of the income and costs, and he 25%.

The only exception is a rare one, where there is enough evidence that the owners' equitable interests differ from the title.

A loan one owner took out alone, only to buy their own share, is theirs. Its interest isn't divided between the owners, as TR 2026/1 paragraph 75 says, and nor are its borrowing costs.

A loan in both names splits like the rest. In the ATO's example, Norman and Lucinda borrow $209,000, $170,000 of it for a rental they own as joint tenants and $39,000 for a car. At 6.75%, a year's interest is $14,108, and $14,108 × $170,000 ÷ $209,000 is $11,475 for the rental. Each claims half, $5,737.50.

For a home contracted from 7.30 pm Canberra time on 12 May 2026, a rental loss no longer comes off wages from 2027-28, unless it is a new home. It is held for later years instead, under section 26-155 of the Income Tax Assessment Act 1997.

Does the negative gearing change apply to property you own? covers the cutoff and the exceptions.

The title deed, which says whether you are joint tenants or tenants in common, and each owner's share.

Each loan's papers, with whose names it is in and what it paid for. The rental property tax calculator lays one year's rent and costs side by side.