In May 2026, the ATO released new guidance on how it treats rental properties, and it changes how short-term rentals are looked at from 1 July 2026. If your property earns income on Airbnb or Stayz and you also stay in it sometimes, this affects you.
I sat down with our accountant, Jason Gillespie from Wingr, to talk it through. Jason’s practice works with short-term rental managers and investment property owners, so he sees this from every angle. Here’s what I took away.
A quick note first. This is general information, not advice. If you have questions about your own situation, talk to your tax agent.
The ATO isn’t seeing more. It’s using what it sees differently.
The ATO has had access to Airbnb, Booking.com and Stayz data for years. It can see which properties are listed and when they’re booked. What has changed is how it uses that information.
The old way was simple. You counted the days you used the property yourself and claimed the rest. Jason’s example: stay 28 days out of 365, claim 337/365 of your costs.
That’s gone. The question now is the dominant use of the property. Is it mainly an investment property you stay in now and then? Or is it a holiday home you rent out when it suits you?
You decide. Australia runs on self-assessment. The ATO gives you guidelines, you make the call, and you need to be able to back it up.
Why the answer matters
If your property isn’t mainly used to earn income, you can’t claim the ownership costs. No interest. No council or water rates. No body corporate fees, capital works or depreciation. You can only claim the costs tied to the stays themselves, like advertising, cleaning after a guest and booking fees and commissions.
One thing Jason was clear on. If you stayed in your property for part of the year, you were never meant to claim the full deductions. Some owners have been. That’s part of what the ATO is cracking down on.
What the ATO is looking at
There’s no single test, and Jason was honest that it’s subjective. The ATO weighs up several things, including:
- Whether you block out peak periods like Christmas and Easter
- Whether the property makes a loss year after year, giving you a tax benefit each time
- Whether it’s advertised at rates so high no one is likely to book it
Blocking out Christmas won’t make your property a holiday home on its own. But it will weigh heavily.
Jason gave two extremes. Own a ski apartment in Thredbo and keep it off the market every winter so you can use it? That’s a holiday home. Stay in your rental for a week because your own house is having work done? That’s an investment property with an owner stay. Easy to call. It’s everything in between that gets grey.
The ATO gives its own example of what’s fine. A week, or a few weekends, in the off-season when there was no booking (or very little chance of one). You can still claim deductions in that case. You just split your costs and don’t claim for the days you used it.
And there’s no magic number of days. Twenty-eight nights a year doesn’t automatically tip you into holiday home territory.
What good records look like
If the ATO asked tomorrow, here’s what Jason would want you to have:
- Your booking calendar. Take screenshots at different times of the year showing it’s open. A calendar blocked five or six months ahead will work against you.
- Proof your nightly rates are reasonable across every period, not set high to keep the place empty.
- Owner stays that are short and, where you can, outside peak periods. There’s nothing stopping you staying when it isn’t booked.
- Expense records for trips you make to do maintenance.
- Notes of conversations with your property manager, especially about decisions like blocking dates.
- Your usual ownership records: rates and water rates notices, land tax, repairs and maintenance, and property management statements. None of that has changed.
Wingr also has a free Rental Property Checklist if you’d like help getting your records in order.
Where a property manager helps
When you engage someone to manage your property, you’re paying fees whether there’s a guest or not. That alone shows you’re treating it as an investment. Jason agreed it’s a tick in the box.
It also helps with evidence. Our software records the days your property was available, the days it was blocked and the days you stayed. Our pricing tool sets your rates against the market, so it’s not you picking a number. If you forget to screenshot your calendar (and let’s be honest, most of us will) the data is still there.
Jason’s final word
If you’re thinking of blocking out peak periods, talk to your property manager first. Start keeping your documentation now.
As Jason put it: “If push comes to shove with the ATO, you’re going to have to justify the position you took.” The more care you’ve taken, the better off you’ll be.
You can read the ATO’s guidance for yourself here: New guidance for rental property owners.
Jason is happy to answer questions. You can reach the Wingr team on (07) 3349 3574 or hello@wingr.com.au.
If you’d like to see what your property could earn as a genuine investment, enquire today to get your free appraisal.