ATO Focus on Holiday Homes

The ATO will focus on deductions claimed for rental properties in popular Australian holiday destinations this tax time, having identified many incorrect claims for holiday homes by investors last year.

Assistant Commissioner Kath Anderson has reminded holiday home owners that they can only claim tax deductions for expenses made during a period when the home is rented out or genuinely available for rent.

She also said if they rent their property at a discounted rate, or “mates’ rates”, they can only claim deductions equal to the amount of rent charged.

She also reminded all rental property owners that they should declare all rental income, keep an accurate record of expenses, and strong evidence of the property being rented or genuinely available for rent at market rates. She said “advertising through a real-estate agent or an online site is not always enough evidence to demonstrate that a property is genuinely available for rent”.