Chartered Accountants ANZ (CA ANZ) has flagged changes to the taxation of holiday homes following new draft guidance from the Australian Taxation Office (ATO).
From 1 July 2026, certain holiday homes may be treated by the ATO as ‘leisure facilities’, preventing owners from claiming deductions for interest, rates or maintenance, unless the holiday home is mainly rented out to generate income.
Holiday homes in popular seasonal areas such as ski lodges or beach houses which are not available for rental throughout peak seasons, will trigger ATO attention and may result in the denial of deductions.
Other triggers that will generate ATO interest may include:
- Limited attempts to rent out the property.
- Parts of the property being inaccessible for use by guests.
- Pricing the property well above market rate to drive interest away from the property.
- Renting the property to family or friends significantly below market rate.
CA ANZ Australian Tax Leader, Susan Franks, said holiday homeowners need to look closely at these changes to ensure they’re not caught off guard.
“Understanding the ATO’s proposed approach is essential for holiday homeowners. Staying informed now can help avoid compliance risks later,” Ms Franks said.
“With the ATO tightening its approach, holiday homeowners need to be proactive.”
“Make sure your property is genuinely available for rent, especially in peak season, advertise widely, set a fair market rent, and avoid restrictions that turn away guests, like ‘no children’, ‘no pets’ or ‘requiring references for short stays.”
Keep thorough records and, above all, talk to your Chartered Accountant about these changes to stay on the right side of tax rules.”
About Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand represents more than 140,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. Chartered Accountants are known as Difference Makers. The depth and breadth of their expertise helps them to see the big picture and chart the best course of action.
www.charteredaccountantsanz.com
For more information contact:
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AUSTRALIA Owen Roberts, Public Affairs Specialist M +61 422 644 847
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