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Many Australians own a holiday home, but according to the Australian Taxation Office, there
are a small number of holiday home owners who, on average claim deductions that are six
times higher than income earned from the property.
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You can only claim deductions to the extent their holiday home expenses are incurred for the purpose of producing rental income.
Is there a commercial-like purpose to the availability for rental? An apportionment of expenses may be appropriate.
Some questions to answer can help ensure the claims are a valid rental deduction:-
- How many days was it rented out and was the rent in line with market values?
- Where do you advertise for rent and were any restrictions placed on tenants?
- Have you, your family or friends used the property?
A reasonable level of experience and judgement (from your tax professional) can assist
satisfying these subjective issues.
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