Holiday home rental expenses under the ATO's new rules
Find out which costs you can claim on a holiday home you rent out, and how to split them correctly.
Free guideWhy it matters.
You own a place at the coast or in the mountains. You list it on a booking platform when you're not there, and the bookings help cover the loan, rates and upkeep. Then tax time comes around and the questions start. Can you claim the interest, the insurance and the repairs? What about the weeks your family stayed, or the long weekend you blocked out just in case?
The ATO issued new guidance in May 2026 and has made holiday homes a focus. For costs you incur from 1 July 2026, how you actually use the property matters more than ever. Get it wrong and you could lose deductions you were counting on, or claim ones you're not entitled to and face an amended assessment, a penalty and interest. Get it right and you can claim with confidence, keep the right records, and plan your own stays without second-guessing every booking.
What the guide covers.
After reading this guide, you'll be able to work out what you can claim on your holiday home and keep the records to back it up.
- How the ATO decides whether your holiday home is used mainly to earn rent
- Which costs you can claim in full, which you must split, and which you can never claim
- How to work out your claim when you, family or friends stay at the property
- The booking and pricing habits that can put your deductions at risk
- A checklist of the records to keep from purchase through to sale
Don't leave it to chance.
Getting holiday home claims wrong can be costly. If the property isn't used mainly to earn rent, the ATO won't allow costs like interest, rates, insurance and repairs. If you overclaim without taking reasonable care, the base penalty is 25% of the shortfall, on top of the tax itself.
Our Individual tax return service looks at how your property was really used during the year, not just the rent it earned. We help you work out which costs you can claim and how to split them for personal use, and we check your records. Every return comes with a next-year plan, so you know how your own stays and booking choices might affect your next claim.
This page and the guide are general information only and don't consider your personal circumstances. Speak with us before acting on them.