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GST and income tax on Australian holiday rentals, motels and caravan parks

Sergej Sitki · founder of ReceptionGO and host
Published 1 November 2026 · 10 min read

General information, not legal, tax or insurance advice. Check your own case with your council, the ATO or the state revenue office, or an accountant. Rates and dates below were checked on the date shown — recheck the linked official page before you lodge, register or set a price from them.

A single holiday apartment is usually input-taxed: no GST on the rent and no credits. A motel, hostel or caravan park that is commercial residential premises charges GST once registered. The threshold is $75,000. Holiday-home interest and rates are deductible only if the home is mainly let. Platforms report the income to the ATO.

Several properties? We’ll show you in 15 minutes. →

The question that arrives in every new host’s first winter is “do I add 10%?”. The useful answer is not a percentage. It is what the premises are. A beach house and a 20-room motel can both be full on Boxing Day and still sit on opposite sides of the GST Act. Income tax then asks a second question the GST question does not: was this holiday home mainly a business of letting, or mainly your holiday with some guests attached?

Residential rent, or commercial accommodation

The ATO’s page on holiday apartments, updated 21 May 2026, states the ordinary case. An individual apartment, even inside a building that looks like a hotel, does not become commercial residential premises just because an on-site manager hands over keys, changes the linen and tops up the tea and coffee. In GSTR 2012/6, example 12, Gus lets his strata apartment through that manager, as agent. The supply Gus makes is input-taxed residential premises. No GST on the tariff. No credits for the fit-out.

Commercial residential premises are the other list: a hotel, motel, inn, hostel or boarding house, and premises similar to those, plus a caravan park or camping ground. The ruling looks at whether you are in the business of providing accommodation to travellers, with the services a guest in that kind of property expects. A traditional B&B that takes unrelated guests, serves breakfast and is run as the accommodation business — not a spare room — needs a proper look against the ruling, not a guess from the word “B&B” on the sign. A farm stay can fall either way. Glamping tents are not a special GST category; the premises test still applies.

If you are on the commercial side

Short-term commercial accommodation — less than 28 continuous days — is a taxable supply once you are registered or required to be. GST is one-eleventh of the price, not 10% on top of a price that already includes it, unless you have built the price that way on purpose and shown it correctly. Stays of 28 days or more can use the long-term concessions. If at least 70% of guests stay 28 days or more, the “predominantly long-term” treatment is available. Meals and other extras billed on their own stay fully taxable. The ruling for the long-term concession is GSTR 2012/7, and it is the page to read before a corporate relocation books a month in the motel.

You must register when GST turnover hits $75,000, counting the current month plus the previous 11, or the current month plus the next 11 if that is the projected figure. Input-taxed sales are excluded. Residential rent from the beach house does not push a small motel over the line; the motel’s own room revenue does. An ABN is part of registering. Below the threshold, registration is a choice, generally locked in for 12 months, and it is often a bad choice for a purely residential let because you add GST without picking up credits that matter.

Income tax: the holiday home has to be mainly let

Rent is assessable whether or not GST applies. The deduction fight is section 26-50. The ATO’s holiday-home guidance, also updated 21 May 2026, says you claim ownership and use expenses only when the home is used or held mainly to produce rental income. Those expenses are the ones owners care about: interest, borrowing costs, council rates, water rates, body corporate fees, land tax, repairs and maintenance. They are not the booking commission, the advertising or the clean after a paying guest — those can still be claimed against the rent you did earn.

“Mainly” is chiefly, principally, for the most part. The Commissioner looks at how the home was actually used, how much time was dedicated to income, how much time was private or available for private use by family and friends, and whether it was on the market when people actually want a holiday — school holidays, public holidays, the peak. One of those factors is not enough. Intention is not enough. A comparison of “days rented versus days we used it” is not, on its own, enough. Practical Compliance Guideline PCG 2026/3 is the ATO’s compliance approach. Read it with your accountant before you claim a loss on a house you occupied every January.

Where the mainly-income test is met, you still apportion. Private nights, a mate at mates’ rates, and a wing of the house you did not let are not deductible. Land tax and the main-residence capital-gains exemption are state and federal questions of their own; the rates change by state and by year, and they are not repeated here because a stale rate is worse than a pointer to the revenue office.

None of this is the old UK furnished-holiday-let regime. Australia does not give holiday rentals a special income-tax status for being “commercial” in that sense. Negative gearing, where it still arises, is ordinary rental law — and section 26-50 is how a holiday house loses the interest deduction without anyone calling it a business.

What the ATO already knows

Under the Sharing Economy Reporting Regime, electronic platforms report short-term accommodation suppliers twice a year. The obligation for this category started on 1 July 2023. The file includes identity, amounts, GST where it is relevant, fees and property details. If the numbers on your return and the numbers on the platform file diverge, you will be the one asked to explain. Direct bookings, and cash, are not in the file. They are still income.

Commissions paid to Airbnb, Booking.com and Stayz are part of the cost of earning that income when the deduction rules allow. The fee structures themselves move; the current host-side picture is in Airbnb, Booking.com and Stayz fees. A Victorian short stay levy is not GST and not income tax. An ACT platform levy is the platform’s liability. Do not net them into a homemade “tax” line on the guest invoice without knowing which Act you are collecting under.

A clean year, in practice

• Decide, with the ruling, whether each property is residential rent or commercial residential premises. Do not let one ABN smear GST across both.
• Keep private-use dates. The Christmas fortnight you kept for family is the fact section 26-50 is written for. The seasonal pattern is discussed in the summer peak.
• Separate bonds from revenue. A bond you might refund is not rent.
• Export the year from one calendar rather than from four OTA inboxes. State night caps, where you have them, use the same nights — see the state rules.