ATO Update on Tax Claims including a Holiday Home
- johnry8
- Nov 28, 2025
- 2 min read
If you own a holiday home and claim tax deductions for it, the ATO might start paying closer attention this year. The ATO are now using AI tools that show whether a property is truly being rented out or mainly used for personal use.
The old approach of listing a property occasionally and claiming full deductions is no longer safe.
Why the ATO Is Doing This
Holiday homes have become an area of concern because many owners claim large deductions even when the property is rarely available for rent. The ATO wants to make sure deductions are only claimed when the property is genuinely being used to earn income.
Who This Affects Most
You may be at risk if:
Your holiday home is used mostly by you, your family or your friends
You claim full year deductions, but the property is rarely rented
You remove the listing during school holidays or other peak times
You do not keep clear records of when the property was available
How to Stay on the Safe Side
You can reduce your risk by doing the following:
Make sure the property is genuinely available for rent
Keep records of advertising, enquiries, bookings and blocked dates
Claim expenses only for the periods the property was earning income
Keep personal use and rental use clearly separated
Seek advice if you are not sure what you can claim
These steps make it easier to show the ATO that your claims are accurate and honest.
If your holiday home is mostly for your own use, the ATO may question any large deductions you claim. If you rent it out properly, make sure your documentation is clear and up to date.
Want to make sure your holiday home claims are correct? The team at Rise Accountants are happy to help.