Rent in Advance: What Every Perth Property Investor Needs to Know

Expanding your Perth property investment portfolio requires careful planning and a solid understanding of key financial aspects—one of which is rent in advance. At D Residential Group, we specialise in boutique property management, helping investors navigate rental payments and legal compliance with ease.

Here’s everything Perth landlords need to know about rent in advance and how it impacts their investments.

What is Rent in Advance?

Rent in advance refers to a tenant paying rent before it is due, often to secure a rental property. Under Western Australia’s Residential Tenancies Act, landlords (lessors) can request up to two weeks’ rent in advance—any additional advance payments must be agreed upon in writing.

Key Legal Considerations for WA Landlords

✔️ Limits on Rent in Advance – Landlords cannot request more than two weeks’ rent upfront. This regulation ensures fairness and transparency in rental agreements.

✔️ Security & Pet Bonds – A security bond, usually equal to four weeks’ rent, can also be collected. If a tenant has pets, landlords can request a pet bond of up to $260.

✔️ Written Agreements for Additional Payments – If a tenant voluntarily offers to pay more than two weeks in advance, this must be documented in writing.

✔️ Trust Fund Management – Property managers, like D Residential Group, hold rent in advance in a trust account. This ensures compliance, transparency, and accurate financial tracking for both landlords and tenants.

How Rent in Advance Affects Your Tax Position

When it comes to tax, rent in advance is considered taxable income when it is received—not when it is due. This means that the financial year in which you collect rent in advance determines how it impacts your tax obligations.

Rental Income & Tax Timing

ATO Rules for WA Investors – The Australian Taxation Office (ATO) applies a cash basis approach, meaning rental income is taxed in the financial year it is received.

EOFY Considerations – If a tenant pays rent in advance before 30 June, that income must be declared in the current financial year, even if it applies to a rental period extending into the next financial year.

Potential Tax Implications

Higher Taxable Income – Receiving a lump sum payment in advance could increase taxable income, potentially pushing landlords into a higher tax bracket.

Impact on Deductions – Rental property expenses (interest, maintenance, depreciation) remain deductible in the year they are incurred, so timing advance rent payments does not impact when deductions can be claimed.

Smart Tax Strategies for Perth Property Investors

Income Spreading – If a large rent payment is expected in June, landlords may consider adjusting other taxable income or making prepaid deductible expenses (e.g., maintenance, interest payments) to offset the tax impact.

Depreciation & Tax Offsets – Ensuring all allowable depreciation and deductions are claimed can help reduce the impact of higher taxable income from advance rent payments.

Maximise Your Investment with Expert Property Management

At D Residential Group, we take the stress out of managing rental income, trust accounts, and legal compliance. Our expert team ensures rent in advance is handled securely, while keeping you compliant with WA tenancy laws.

Want to streamline your investment portfolio? Contact us today to discover how our boutique property management services can help you maximise returns while enjoying peace of mind.