| 02 9982 2466

Claiming tax deductions for your holiday house

Leasing out your holiday house to others can make owning the property more affordable.

The principles that apply to an investment rental property also apply to leased or rented holiday houses. This means owners are entitled to claim expenses for the property based on the proportion of the income year when it was rented or available for rent. Some deductible expenses include:

However, if owners use the holiday house during the year, they cannot claim any deductions for the expenses that relate to that private use. This includes use by other family members, relatives or friends. For example, if the house is available to rent for most of the year, but two weeks are unavailable for personal use, then that two weeks must be ignored when calculating deductions.

If owners choose to charge relatives and friends a lower rent rate, the ATO will only allow deductions that are confined to the amount of rent received for that period. However, if the rent received surpasses the allocated rental fees for that period, then the total expense may be claimed.

Owners can also make claims for feasible travel costs if any travel is made to inspect, maintain or repair the holiday house. The provision is that travel must be solely for these purposes, and not combined with simply visiting the property to have a holiday.

Posted on 9 August '15 by , under Tax.

Leave a Comment

You must be logged in to post a comment.

Join Our Mailing List!

Subscribe to our mailing list to receive all the latest financial newsletter updates as well as information on important dates on our business calendar.

Recent Updates

Firm News

Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

Business Calender