Can you claim holiday home expenses if you also use it yourself?

Brevity Bookings · 13 November 2026 · 10 min read

General information only, not tax advice, and it doesn't take your circumstances into account. It reflects ATO guidance as at November 2026. For advice on your situation, talk to a registered tax agent (check one on the Tax Practitioners Board register) or contact the ATO.

Short answer: only if the house is used, or held for use, mainly to earn rent, at all times during the income year. If it isn't, the ATO now says you can't claim the costs of owning it, such as interest, council rates, land tax and repairs, even though the rent still goes in your tax return.

That's the view in the ATO's ruling TR 2026/1, issued 20 May 2026. The ATO won't spend compliance resources on this for expenses incurred before 1 July 2026, so the 2026-27 financial year is the first one where it really bites. Costs that are purely about renting, such as advertising, booking fees and cleaning after guests, are still claimable to the extent they're incurred to earn rent.

This is part 1 of a three-part series. Part 2 runs the numbers on charging the family market rent, and part 3 covers mates' rates. Both are coming this week.

The thread running through all three parts: keep good records and let a registered tax agent make the call. Brevity Bookings keeps the record of who stayed and what they paid as you go. More on that near the end.

Does this apply to me?

Pull up a chair if:

you're an individual (not a company or trust) who owns a holiday house or unit in Australia
you rent it out some of the time, to strangers, friends or family
you, your family or your mates also use it for holidays, or keep it free just in case

Skip the chair and call a registered tax agent early if:

the property is owned by a company or trust, or renting it is part of a business (TR 2026/1 is written for individuals who are not in business)
you changed how you use the place partway through the year
you borrowed to buy it and the interest is a big part of your numbers

What counts as a holiday home?

TR 2026/1 (paragraph 12) says a holiday home is a property used, or held for use, for your holidays or recreation, or for the holidays or recreation of your family and friends for no rent or at a reduced rate. "Family and friends" is the ATO's phrase. What counts for the definition is what they pay: it catches stays for no rent or at a reduced rate. A holiday home is a type of "leisure facility", so the leisure facility rules in section 26-50 of the income tax law apply to it (paragraph 90).

Note the "held for use" part. The ATO looks at the pattern of use over time, including when the place is empty (TR 2026/1, paragraph 33). Keeping the house free for the family, even when nobody turns up, is time "held for potential private use", and that is one of the factors the ATO weighs against you (paragraph 41).

What expenses can't you claim on a holiday home?

If the house is a holiday home and it isn't mainly rented out, section 26-50 denies deductions for costs of owning or using it (TR 2026/1, paragraphs 35 and 94). The ATO's common examples are:

interest on the loan used to buy it
council rates
land tax
repairs and maintenance

The ATO's holiday homes page adds water rates and body corporate fees to the list. That covers most of the big-ticket bills, so this isn't a rounding error.

The rent doesn't get the same treatment. It's still assessable income and still goes in your return. Yes, really. Heads they win, tails you declare it.

What can you still claim?

Costs that relate to renting, rather than to owning, stay deductible to the extent they're incurred to earn rent. TR 2026/1 (paragraph 36) gives advertising to rent the property and cleaning after a guest stay as examples. In the ATO's Daniel and Kate example, an owner who rents the house only 10 to 14 days a year can still claim 100% of costs solely tied to renting, such as the platform's service fees or commission (paragraph 126).

What you can't claim is cleaning after your own stay, or after family and friends have used the place for a holiday. The ATO's holiday homes page is clear on that one. It doesn't separate friends who pay from friends who stay free, so ask your tax agent about cleaning after a paid stay. The bleach for Uncle Bazza's long weekend is on you.

What does "mainly" rented out mean?

"Mainly" means "chiefly; principally; for the most part" (TR 2026/1, paragraph 38). The test is objective, not about what you meant to do (paragraph 41). The ATO weighs:

how the house is actually used
how much time it spends earning rent
how much time it's used privately, or held for possible private use
whether it's actually available or rented when people want a holiday, such as school holidays, public holidays and peak seasons

No single factor decides it (TR 2026/1, paragraph 42), and a simple count of days advertised or used isn't enough on its own (paragraph 40). Listing the place online while you're not using it doesn't prove much either (paragraph 111).

The big one is peak periods. The ATO says that if a holiday home is advertised for more than half the year but isn't available or rented for all or most of the times it's in demand, that points to the main use not being earning rent (TR 2026/1, paragraph 112). Peak periods depend on the location (paragraph 113): a snowfield cabin and a beach house have different busy seasons.

So the family Christmas fortnight at the beach is not a small detail. It's probably the main event.

What do the ATO's examples say?

TR 2026/1 works through several owners. In short:

Carla's beach house (TR 2026/1, paragraphs 119 to 121): blocked out for family over the peak periods, with most rental applicants turned away. It's a holiday home not mainly rented, so ownership costs are denied. The ATO says the same outcome follows if she lets friends stay free or below market rent.
Eve's place (TR 2026/1, paragraphs 116 to 118): she uses it a night or two a year, off-peak. It's still mainly rented, so she can claim, but she must apportion for her own nights.
Daniel and Kate's house (TR 2026/1, paragraphs 122 to 126): rented for 10 to 14 days a year. Not mainly rented, so ownership costs are denied, but rental-only costs are still fully claimable.
Cho's Gold Coast apartment (TR 2026/1, paragraph 115): held only for rent and never kept for private use. Not a holiday home at all, so the holiday home rule doesn't touch her costs.

What about mates' rates for family and friends?

Rent from family is still rent, even at a family discount (TR 2026/1, paragraph 67). It goes in your return.

Discounted stays cost you in two ways. Costs have to be apportioned when you charge family or friends less than market rent (TR 2026/1, paragraphs 67 and 68, and the ATO's holiday homes page). And because the holiday home definition includes stays by family and friends for no rent or at a reduced rate, enough mates' rates can tip the house into "not mainly rented", where ownership costs are denied altogether. The slab your brother-in-law brings doesn't count as market rent, worse luck.

Even if it's mainly rented, do you still apportion?

Yes. If the house is mainly rented, ownership costs aren't blocked by section 26-50, but you still can't claim for the nights you used it, for times it was neither rented nor genuinely available for rent, or for parts of the property you didn't rent out. The ATO's holiday homes page lists when to apportion, and PCG 2026/2 sets out the ATO's apportionment methods.

What if your use changes during the year?

The exception needs the house to be mainly rented "at all times during the income year" (TR 2026/1, paragraph 37). A definite and sustained change in how you use it, such as buying or selling it, or switching from family use to renting it full time, can change the main use from that point (paragraphs 46, 47 and 132). In the ATO's example, Carla moves overseas, drops the private-use restrictions, and the house counts as mainly rented from 1 January (paragraphs 133 to 135).

Taking the family off the booking calendar for one month so the books look good is not the same thing. The ATO notes an anti-avoidance rule in section 26-50(7) for schemes entered into to get around the rule (TR 2026/1, paragraphs 44 and 45).

Do denied costs disappear for good?

Not necessarily. TR 2026/1 says denied ownership costs may form part of the property's cost base for capital gains tax, under the usual cost base rules (paragraph 95). Whether they do depends on your situation, so keep every receipt from purchase to sale, and for at least five years after you sell, as the ATO's page on keeping records for property says, and ask your tax agent. Don't assume your agent still has the old paperwork. If you bought the place decades ago, those receipts are yours to keep.

What records should you keep?

The test turns on how the house was really used, so a diary beats a shoebox. Keep a record of:

every night it was rented, and the rent you charged
every night you, family or friends stayed, and what they paid, if anything
when it was available to rent, especially over school holidays, public holidays and your local peak season
each expense, and whether it relates to owning the place or to renting it

How Brevity Bookings helps

Brevity Bookings gives your holiday home its own booking calendar. Family, friends and repeat guests ask to stay, and you approve who books, so the year's pattern of use is in one place instead of a group chat.

Each paying booking, cleaning job and maintenance cost flows into an income and expense ledger that follows the Australian financial year. The Finances section also has a usage log that tags every night of the year as rented, private, blocked or available, and the year's export for your accountant includes those counts. It's bookkeeping, not a tax ruling: it records what happened, and your tax agent decides what it means.

What it costs is on the pricing page. If some of your stays come through the big booking platforms, the fee calculator compares what they charge.

Common questions

When did the holiday home rules start?

TR 2026/1 was issued on 20 May 2026. The ATO won't devote compliance resources to section 26-50 for holiday home expenses incurred before 1 July 2026, unless there's avoidance, fraud or evasion, or you otherwise take inappropriate advantage of the approach (paragraphs 138 and 139).

Is the old position still safe for earlier years?

The ATO won't go looking, but if you ask it to amend an assessment or issue a private ruling, it will apply the ruling's views (TR 2026/1, paragraph 140).

If I rent it out more than half the year, am I fine?

Not automatically. The ATO says a simple count of days isn't enough, and missing out on the peak periods points against it being mainly rented.

Can I still claim booking fees and cleaning?

Yes, for costs that relate to renting, such as booking fees, advertising and cleaning after guests, to the extent they're incurred to earn rent. Not for cleaning after your own stays.

Do I still declare the rent?

Yes. Rent, including rent from family at a discount, is assessable whether or not the ownership costs are deductible.

Where to from here

Look at last summer's calendar: who had the house over Christmas, Easter and the school holidays?
Start a usage record for 2026-27, if you haven't already. A booking calendar like Brevity Bookings keeps it as you go.
Talk to a registered tax agent before you lodge your 2026-27 return, especially if you have a loan on the place.
Come back this week for part 2, is it worth charging the family market rent, and part 3, mates' rates at the holiday home.

General information only, not tax advice. Check your own situation with a registered tax agent.

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