I'm thinking of buying a holiday house. Is there a way to make it a negatively geared investment property?

Hi Bethany,

The income of the property after all expenses such as rates interest on the loan to purchase it & depreciation costs versus the rental income are what will determine if it is a negatively geared investment property. Assuming that you are renting it out & not living in it yourself.

Hope this helps.

Hello Bethany.
A lot of my clients seek to have negatively geared investment property. I like to point out that depending on your income and therefore your marginal tax rate, such a strategy is not always beneficial.
For every $ of loss (income - expenses) you claim as a deduction on your tax return, you get back only a percentage equal to your marginal tax rate, i.e. 30 cents. Therefore you have really lost $0.70
With holiday homes the amount of deduction claimable is a percentage based on the number of weeks in the year that the property was available to be rented.
If you spend say 6 weeks holidaying in the property during a tax year then the maximum claim for expenses is 46/52.
Feel free to message me to assist clarifying any of this.

Hi Bethany

If you are renting it out as a holiday letting, you can claim a tax deduction on the portion that is not for private use and it needs to be available for rentals for the remaining period. You should speak with your accountant for specific advice on your tax situation but I have experience with this as we actually manage our own holiday house in this way.

Give me a call if you would like to discuss further 0408 698 210 or send me an email.

Regards
Joanne Foltman
Mortgage Broker

Interesting question. I suggest speaking with your accountant. I'm sure others would love to know the answer too! I would.

Don't ever call it a holiday house is a first step. Then make sure you lease it for most of the year to an permanent renter and always have it listed for permanent letting. Do this and you might be a chance.

unless you have a large income why would you want to lose money just to be able to claim the loss. make a profit by renting it to short term tenants. claim depreciation and maintenance