Just after some info regarding short term rental of a holiday home to enable it to be classed as an investment property, while still used as a holiday home.
I have found some info that basicaly says that the home must be available for rent the whole year at commercial rates. I would expect the deductions to be proportional to the time spent in the house by the owner.
eg : 26 weeks use by owner and 26 weeks rented out- 50% of expenses deductable, or something like that.
But what about the more common situation of:
4 weeks by owner, 12 weeks by rental, 6 weeks rented to friends at reduced rate, 30 weeks vacant in off season, and the property is "advertised" for rent the whole time.
Seems like there may be a few grey areas on this one.
Thanks.
I don't think it is a grey area. If you are staying there then you cannot claim for this period. If your friends are staying there then you cannot claim, or have to account for market rents, if it is vacant and you are looking but cannot find tenants it should be claimable.
You just have to keep track of it all.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry,
I have purchased new furniture to help with the holiday rental. This will be depreciated over time with the rest of the house. I also have a boat and motorbike that are kept at the house at all times. Would it be possible to now claim the depreciation, registration, insurance and maintenance of these items? Of course i would have to say they were available to tenants to use and there would be the added risk and insurance issues.
Seems to make sense in theory.
Yep i think that as long as you are trying to rent then you should be able to start claiming, but you had better check with your accountant first.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If you are keeping the boat and motorbike for your personal use, I doubt you could claim their maintenance.
If you say they were available for tenant's use, and turns out they weren't when you happen to be audited by ATO, then there will be storm on the horizon.
If you can't afford to buy a holiday house, then you probably shouldn't. If you want assistance in buying a holiday house by combining it as an IP, then go for it, but do it properly and above board. I believe in a good night sleep.
I agree with Terry, check with your accountant.
Nani
Email MeThe road to success is always under construction
Thanks for the replies,
In one sense you are correct samson, i probably cant afford a holiday house of this size. But I can afford one for the 10% of the year that I can actually use it, and would like to get something back for the other 90%of the year.
I do want to keep it all above board, but at the same time I want to get every dollar back that I am entitled to.
Seems that as usual alot of this would come down to documenting, or otherwise proving, to the ATO that you are doing what you claim to be doing.
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