Dreaming of a Holiday Home

Here’s what to consider before you dive in.

Imagine waking up in a cosy mountain retreat or a breezy beach shack overlooking the ocean—your own private escape. Whether you're dreaming of a sea change, a tree change, or simply a place to unwind, investing in a holiday home can be a rewarding way to diversify your portfolio and create a personal sanctuary.

But before you commit, it’s worth stepping back and asking: how will this property serve you financially, practically, and emotionally?

Decide How You’ll Use Your Holiday Home

Start with a clear plan. Will this be a personal retreat, a rental income stream, or a mix of both?

• If you’re planning to rent it out, peak seasons (like summer for coastal homes) may offer the best returns—but you might need to forgo personal use during those times.

• Research whether similar properties in the area rent year-round or seasonally. This affects your income and budgeting.

• Consider how your usage may change over time—especially if you’re thinking long-term.

Prompt: Could you see yourself using the property more in retirement or during school holidays?

Research the Market Thoroughly

As with any property purchase, location and timing matter.

• What’s the supply vs demand for holiday rentals in the area?

• Is the local tourism scene stable or seasonal?

• How will you cover costs during quieter months?

• Look for capital growth indicators: access to shops, cafes, transport, and planned infrastructure upgrades.

Tip: Choose areas with lifestyle appeal and long-term growth potential.

Understand Local Rules and Regulations

Short-term rental laws vary widely across Australia.

• Some councils require registration or impose limits on how long you can stay.

• You may need to meet fire safety, parking, or noise control standards.

• In Victoria, a 7.5% short-stay levy applies to bookings under 28 days.

Bottom line: Know your obligations before you buy. We can help you navigate the fine print.

Know the Financial Implications

Owning a holiday home comes with ongoing costs. Be prepared for:

• Mortgage repayments

• Council rates

• Home and public liability insurance

• Cleaning and maintenance fees

And don’t forget the tax side of things:

• Tax deductions: You can claim expenses tied to rental income—but only when the property is genuinely available for rent.

• Negative gearing: If costs exceed income, you may be able to offset losses against other earnings.

• Capital gains tax: If you sell at a profit, CGT may apply. Holding the property for over 12 months could qualify you for a 50% discount.

• Stamp duty and land tax: These vary by state and property type.

Prompt: Have you spoken to your accountant about how a holiday home fits into your broader financial strategy?

Ready to Make Your Holiday Home Dream a Reality

If you’re thinking about investing in a holiday home—whether for lifestyle, legacy, or long-term growth—we’re here to help.

Let’s chat about your goals, your borrowing power, and the best way to structure your purchase. Your dream escape could be closer than you think.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.