Hi, I purchased a caravan to rent out for income producing use.
I did all the things the ATO listed to make it genuinely available for rent, including:
- advertise it widely so it will attract users and respond to enquiries in a reasonable period
- make it available during peak periods when people want to rent it
- ask for a fair rent comparable to other listings
- ensure it's in a location and condition that will make it likely to attract tenants
- not refuse to rent it to interested people without adequate reasons.
In addition, I created very detailed instructions and videos I put online for hirers. I spent a lot of time doing this.
Unfortunately it was not successful. In the 9 months it was available, I only received one suitable booking over Christmas / New Years. All the other bookings were not serious or did not have the correct tow vehicle and could not legally tow it.
I ended up using the van 12 nights (short trips when not rented out) and it was rented out for 10. Despite using the van more than I rented it, I believe I should still be able to claim deductions for periods when the caravan was not rented out.
The information on the ATO web page contradicts itself though so I want to seek clarification.
On one hand it says:
1. “If you purchased or use the caravan or RV mainly for private use, you count the periods the caravan or RV is not rented or hired, even if it's available for rent or hire on the platform, as private use.”
In the next paragraph it says:
2. “If you purchased or use your caravan or RV mainly for income-producing use, you're entitled to claim deductions for periods when the caravan or RV is rented or genuinely available for rent.”
I satisfy both of these paragraphs. In the first paragraph, I mainly used the caravan for private purposes even though it was not my intention. In the second paragraph, I purchased it mainly for income-producing use, even though it unfortunately did not work out.
My intention was to hire the caravan out full time. I have emails to Camplify prior to purchasing the caravan evidencing this. Given my intent, I believe I am entitled to claim for period when the caravan was not rented out.
If you can please clarify this, that would be great.
Thanks you
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