Generally, if you rent out part or all of your home, the rent money you receive is assessable. This means that you must declare your rental income in your income tax return, but you can also claim deductions for any associated expenses.
However, be warned. If you rent out part of your home, such as one room, you also may not be entitled to the full main residence exemption from capital gains tax (CGT). This means you will be required to pay CG
Interest can be claimed for the cost of funds borrowed to purchase a rental property and to meet maintenance costs or running expenses while the rental property is being let (or is available to be let) under a commercial arrangement to generate assessable income. In these circumstances the interest paid is deductible even if it exceeds the income generated.