20/10/2026
π‘ Rental Property Deductions: What If Your Property Is Also a Holiday Home?
The ATO has updated its guidance on rental property income and expenses from 1 July 2026, including properties that are also used privately as holiday homes.
π What does this mean for property owners?
If your property is considered a leisure facility, such as a holiday home, it must be used mainly to generate rental income for you to claim expenses associated with owning and maintaining it.
If this requirement isnβt met, expenses such as the following may not be deductible:
π Interest expenses
π Council and water rates
π Body corporate fees
π Repairs and maintenance
Some expenses may still be deductible, including advertising, cleaning after guest stays, and booking fees or commissions.
If your property is mainly rented out but you occasionally use it privately, certain expenses may still be deductible under the usual rules. However, youβll need to apportion your expenses to exclude periods of private use.
π‘ Thinking of claiming holiday home expenses? Make sure you understand the rules before lodging your tax return.