Tasmania Rental Bond Interest: Who Keeps It?

The Short Answer

Neither the owner, tenant nor deposit contributor receives interest on a rental bond held by the Rental Deposit Authority. Section 29E(5) of the Residential Tenancy Act 1997 makes interest on those bonds the Authority's property and says it is not payable as a disbursement.

Where the Interest Goes

The RDA pools every active bond in Tasmania and invests the combined funds. Interest earned goes toward three purposes:

• Administration costs — running the MyBond portal and processing lodgements, claims and transfers
• Public awareness programs — tenant and landlord education about tenancy rights and obligations
• Dispute resolution services — funding the operations of Consumer Affairs Tasmania's rental dispute functions

This is different from states like New South Wales and Queensland, where bond interest is partially returned to tenants. For bonds held by the RDA, the legislation directs interest into the system that administers them.

Tax Treatment for Landlords

Because the interest goes to the RDA and never reaches the landlord, there's no income to declare. The bond itself is a trust fund, not income — you should never declare the bond amount as rental income on your tax return.

A bond payment becomes assessable income only in the financial year the RDA disburses funds to you — specifically, when you receive bond money to compensate for lost rent or unrepaired damage at the end of a tenancy. If the full bond goes back to the tenant, no taxable event occurs on your side.

What About Holding Bonds Privately?

An owner must not receive bond funds directly from a tenant. Under Section 25(2), the tenant pays the RDA, or an agent where the property is managed by one; Section 25(4)(a) prohibits the owner from receiving the bond. The RDA is the lawful custodian of lodged rental bonds in Tasmania.

If a tenant has paid bond money directly to you, contact Consumer Affairs Tasmania promptly and arrange for it to be paid to the RDA. Section 29E(5) addresses interest on bonds held by the RDA; it does not state how interest on money received unlawfully is treated.

No Fees for Lodgement or Disbursement

One practical benefit of the pooled-interest model: the RDA charges nothing for lodging, holding or disbursing bonds. No lodgement fee, no annual maintenance charge, no disbursement commission. The interest income funds the entire operation.

For context on the complete bond lodgement and disbursement process — including deadlines, claim workflows and dispute procedures — see our Tasmania Rental Bond Guide.

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