Claim­ing de­duc­tions for your hol­i­day home?

Wangaratta Chronicle - North East Regional Extra - - Regionalextra -

DO you in­tend to claim de­duc­tions for yoru hol­i­day home?

Make sure it’s gen­uinely avail­able for rent by an­swer­ing these four ques­tions.

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.

Dif­fer­ent rules ap­ply if you’re rent­ing out your pri­vate res­i­dence – check out ato.gov. au/sharinge­con­omy for more in­for­ma­tion.

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.

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