If you own a holiday home you might rent it out at times when you’re not using it yourself. Remember, you should seek professional advice if you have any concerns.
If your holiday home is rented out, the rental income you receive is taxable. You can claim expenses for the property to the extent they’re incurred in earning that rental income.
Your expenses will have to be apportioned if:
- your property is genuinely available for rent for only part of the year;
- you used the property yourself for part of the year;
- only part of your property is used to earn rent; or
- you charge less than market rent to family or friends to use the property.
Expenses that relate solely to the renting of your property don’t have to be apportioned.
On the other hand, no deduction can be claimed for expenses that relate solely to periods when the property isn’t genuinely available for rent, is used for a private purpose or relates to the part of the property that isn’t rented out. For example, the cost of cleaning your holiday home after you, your family or friends have used the property for a holiday or a repair for damage you caused while staying there wouldn’t be deductible expenses because they relate to your private use.
Expenses may be deductible for periods when the property isn’t rented out, but only if the property is genuinely available for rent.
