Types of mixed-use expenses
Fully deductible expenses
You can claim 100% of any expense solely for the income-earning use of the asset. For example, costs of advertising for tenants for your holiday home, costs of repairs when your boat was damaged during a charter trip.
Not deductible expenses
You can't claim any expenses for the private use of the asset. For example, costs of a quad bike stored in a locked garage and unavailable to the general public renting your holiday home.
If an expense relates to both income-earning use and private use, you need to apportion it.
Private use of an asset
"Private use" of your mixed-use asset means use by:
- you, your family or associated people, whether you receive income from the asset or not
- non-associated people if you receive income at less than 80% of market rates.
Income received for private use is exempt income and expenses for private use is not deductible.
"Income-earning use" of your mixed-use asset means use by a non-associated person who pays you at 80% or more of market value.
Income-earning days include time you spend, either occupying or using the asset to:
- repair damage to your asset, provided the damage occurred during income-earning days
- relocate the asset, provided you're paid to do so.