As most people are "stuck" in Australia for the foreseeable future and overseas holidays are a distant dream, there is an increasing demand for staycations. You may live in a particularly attractive part of the country and believe that more visitors than ever will choose to take a holiday in your part of the world. In this case, you may decide to rent out your property to visitors and advertise on one of the prominent home rental sites. Yet how does this affect your tax position, and what do you need to bear in mind?

Declaration

Clearly, rental income will be over and above any other remuneration you may get from your normal job or self-employment. Consequently, you will need to account for tax on that income, but the good news is that you can also offset some expenditure against your end of year bill.

What You Can Claim

You may need to upgrade your property or perform some overdue repairs to make it as attractive as possible to potential tenants.

You can also claim the cost of your utilities and other direct expenses. These will include electricity, water, heating, sewage, and you will need to itemise these as a separate deduction.

Apportionment

However, you do need to be careful here if you use this property for your own needs as well. After all, some Australians decide to move out of their main residence during the peak travel season, move in with friends and maximise their rental income. If you are in this position, bear in mind that you'll only be able to claim deductions on a prorated basis. You will need to be particularly careful to calculate just how much of your expenditure is related to the time when people were actually in your property, or it was otherwise available, and you were not.

Other Things to Bear in Mind

As far as other deductions are concerned, you can claim the cost of any damaged or stolen items during a short-term tenancy. If you rack up personal costs related to the property management, these are allowable as well.

Remember, your claim is valid even if the property is vacant but so long as it is otherwise marketed as available for short-term rental.

Getting Good Advice

As you can see, there are complications involved. This is why it's a good idea to get an experienced tax accountant on your side. They'll make sure that you only claim what is allowed and, importantly, that you do not miss anything either. To learn more, contact a local tax accountant.