Claiming deductions for your holiday home?

As a rental property owner, you probably know that you can claim deductions on expenses for your investment property when it's rented out. But what happens when your property isn't rented out? You can claim a deduction if your property is genuinely available for rent; ask yourself the following four questions to help you determine this:


How do you advertise your rental property?

You need to advertise in a way that maximises exposure to potential tenants such as an online site. Advertising in ways that limits exposure to potential tenants, such as by word of mouth, means your property may not be genuinely available for rent.


What location and condition is your rental property in?

It's important that your rental property is in a location and condition that tenants will want to rent it in. If your property is poorly cared for, or in a remote area, it is unlikely to be tenanted, and may not be classed as genuinely available for rent.


Do you have reasonable conditions for renting the property and charge market rate?

If you place unreasonable conditions that reduce the likelihood of your property being rented out, such as setting the rent above market rate, your property may not be considered genuinely available for rent. Likewise, if you, your family or your friends stay for free, your property will not meet the criteria during that time period. If the property is being tenanted at a discounted rate ('mates' rates') then the allowable deductions are limited to the amount of rent charged, not market rates.


Do you accept interested tenants, unless you have a good reason not to?

If you refuse to rent out your property to interested potential tenants without a good reason, this indicates that you may not have a genuine intention to make income from the property and could be reserving it for private use. In this case, your property wouldn't meet the criteria for being genuinely available for rent.


Different rules apply if you're renting out your private residence – check out the ATO information on the sharing economy and tax


If you would like to discuss this or any topic further, please email:


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