Rental Property Private Use Apportionment (2025-26)

General information only. Speak with a registered tax agent for advice.

If you use a rental property for private purposes — even a few weekends a year — you cannot claim 100% of your expenses. The ATO requires you to apportion deductions based on the time the property was genuinely available for rent versus the time it was used privately or withheld from the rental market. Getting this apportionment wrong is one of the most audited areas of rental property claims.

The apportionment formula

For a property used partly for private purposes and partly as a rental, the deductible percentage is:

(Days rented + Days genuinely available for rent) ÷ 365

Private-use days are excluded from both the numerator and the denominator (they don’t count toward the 365 — the formula divides by total days, not rental days).

Wait — actually the formula works like this: private days reduce the deductible fraction because you’re allocating based on use. Practically, the easiest way to think about it is:

Deductible % = (365 − private-use days) ÷ 365

Or equivalently: claim deductions for every day that isn’t a private-use day, expressed as a fraction of the year.

What counts as “genuinely available for rent”

This is the critical question. The ATO is strict about this. A property is genuinely available for rent if:

• It is listed on a rental platform (real estate agent, Airbnb, Stayz, etc.) at a market-rate price
• You are not blocking dates for personal use
• The property is in a rentable condition

A property is not genuinely available for rent if:

• You’ve told the agent to hold it vacant while you decide whether to visit
• It’s listed at an above-market rate that makes rental unlikely
• You’ve blocked dates on Airbnb “just in case” but without booking them personally
• The property requires repairs that prevent tenants from occupying it

Vacant days that are genuinely on the market count in your favour. Vacant days where you’ve effectively withheld the property from tenants count as private-use days.

Holiday homes and short-term rentals

Holiday homes that you use personally are the most common apportionment scenario. If you rent the property on Airbnb for part of the year and use it yourself for school holidays, you must:

1. Count every night you or your family stayed as a private-use day.
2. Count every night it was rented as a rental day.
3. Count vacant nights where it was genuinely listed as available as rental days.
4. Vacant nights where you held it off the market count as private-use days.

Apply this percentage to all time-based expenses: interest, insurance, council rates, property management fees.

Renting a room in your own home

If you rent out a single room in a property where you also live, apportionment is by floor area, not by time. You calculate the percentage of the home’s total floor area occupied by the rented room (and any shared areas attributed to the tenant).

For example, if you have a 4-bedroom home of equal room sizes and you rent one bedroom, the floor area of that room divided by the total floor area gives you the deductible percentage. Shared areas (hallway, kitchen, bathroom if shared) are sometimes split 50/50 between the room and the rest of the home, or attributed to the tenant at a reasonable fraction.

Time-based vs area-based apportionment:

• Holiday homes with mixed personal/rental use: apportion by days
• Room rentals in your own home: apportion by floor area

Repairs and maintenance: area matters

If you carry out repairs to a shared area of the property (e.g., fixing the driveway or painting common areas), you apportion that repair cost by the same percentage as your other area-based expenses.

If you repair or replace something that is exclusively for the tenant’s use (e.g., the lock on the rented bedroom door), that cost is fully deductible — no apportionment needed.

Apportionment scenarios

Scenario	Days rented	Days private	Days vacant (available)	Deductible %
Full-year tenanted rental	365	0	0	100%
Holiday home: rent 200 days, personal 30 days, genuinely vacant 135 days	200	30	135	91.8% (335 ÷ 365)
Holiday home: rent 200 days, personal 30 days, withheld 135 days	200	165	0	54.8% (200 ÷ 365)
One bedroom in 4-bedroom equal home	365	0	0	~25% (floor area basis)

Note the difference in rows 2 and 3: whether you list those 135 vacant days as available for rent can be worth over $10,000 in additional deductions on a typical property.

Worked example: Byron Bay holiday home

You own a 3-bedroom holiday home in Byron Bay. During 2025-26:

• 182 nights: rented through Airbnb at $400/night — gross income $72,800
• 28 nights: you and your family used it (school holidays, Easter)
• 155 nights: genuinely listed on Airbnb at market rates but not booked

Annual expenses:

• Mortgage interest: $36,000
• Council rates: $3,200
• Insurance: $2,400
• Property management and Airbnb fees: $9,100
• Utilities and cleaning: $5,500

Total expenses: $56,200

Deductible percentage: (182 + 155) ÷ 365 = 337 ÷ 365 = 92.3%

Deductible expenses: $56,200 × 92.3% = $51,873

Your rental income is $72,800 and your deductible expenses are $51,873, producing a taxable profit of $20,927. You cannot claim the remaining $4,327 in expenses (the private-use portion).

If instead you had withheld those 155 vacant nights from the market (blocked but not used), your deductible percentage drops to 182 ÷ 365 = 49.9%, and your deductible expenses fall to just $28,044 — a $23,829 swing.

Common mistakes

Claiming 100% of expenses on a holiday home. This is a major ATO focus area. If you stay at the property at any point, you must apportion. The ATO cross-references agent statements, Airbnb data, and flight/accommodation records.

Blocking dates on a platform without booking them. If you block weeks on Airbnb “in case you want to go” but don’t actually use them, the ATO may treat those as private-use days — you need a firm personal booking to call them a personal use day, but you also need the property actually listed and available to count them as rental days.

Listing at inflated rates to deter bookings. The ATO will not count days where your listing price is unreasonably above market rates as “genuinely available.”

Not keeping a usage diary. You need a contemporaneous record of which nights were rented, which were personal, and which were vacant but available. An Airbnb calendar printout and agent statements will cover most of this, but personal use must be tracked separately.

Using area apportionment for time-based expenses on holiday homes. For holiday homes, the split is by days, not floor area.

Key takeaways

• Apportion by days for holiday homes; by floor area for room rentals in your own home.
• Days genuinely available for rent count in your favour — list the property at market rates.
• Withheld vacant days count as private use and reduce your deductible fraction significantly.
• Keep a usage log: dates rented, dates used personally, dates genuinely listed but vacant.
• The ATO actively reviews holiday home claims and cross-checks short-term rental platform data.

ATO sources

• Rental properties — private use
• Holiday homes and short-term rentals

Next step

• Forecast after-tax outcomes with the Investment Property Calculator
• Check disposal impact in the CGT Calculator