Mixed-Use Asset Calculator

The mixed-use asset (MUA) regime applies to a property or asset that:

• Is used for income-earning activities (paid rentals to unrelated persons at market rates), AND
• Is used privately (by you, family, friends, related persons, or rented at less than market rates), AND
• Is unused for at least 62 days in the tax year.

The most common asset is a bach — used for paid Airbnb in summer, family holidays at other times, and vacant for the off-season. Boats, yachts, planes, and helicopters with similar use patterns also fall in. A property rented continuously to unrelated tenants throughout the year is NOT a mixed-use asset (no significant private use); rules under the standard rental regime apply instead.

Shared expenses (rates, insurance, mortgage interest, depreciation, repairs, utilities, body-corporate fees) are apportioned using:

Deductible portion = expense × (income days) / (income days + private days)

Notice what's not in the denominator: vacant days. This is the MUA regime's defining feature. If your bach is rented 50 days, used privately 30 days, and vacant 285 days, the deductible fraction is 50 / (50 + 30) = 62.5% — not 50/365 = 13.7%. The legislative rationale is that vacant time isn't producing benefit to anyone, so it shouldn't dilute deductions.

Costs that relate only to the paid use, such as platform fees, advertising and cleaning between guests, stay out of the formula and are deducted in full; costs that relate only to private use stay out too (s DG 9(3)(a)). Repairs and maintenance are always apportioned, except repairs to damage (other than wear and tear) done while the asset was earning income (s DG 7(2), s DG 4(4)).

By contrast, ordinary "private-vs-business" apportionment (e.g., for a partly-used home office) uses calendar-time fractions. The MUA rules are explicitly more generous on this point because the legislative intent is to permit legitimate income-related deductions on assets that have significant idle time.

The MUA regime offsets the generous apportionment with a stricter loss rule. If your apportioned deductible expenses exceed your gross income (a tax loss), AND the asset's gross income is less than 2% of its statutory value, the loss is quarantined:

• Cannot offset other taxable income this year (no offset against your salary or other rentals)
• Carries forward indefinitely
• Can only offset future income from the same asset
• Is deductible only in a later year when the asset's income is more than that year's deductions, up to the difference (section DG 17)

The 2% threshold is calculated on a statutory value, not today's market value. For land it is the later of the most recent council capital or annual value and your cost on acquisition (section DG 16(1B)); for a boat or aircraft it is the adjusted tax value. A bach valued at $1,000,000 under that test earning $15,000/year has a 1.5% yield: any loss is quarantined. A $400,000 bach earning $15,000 has a 3.75% yield: losses flow through to other income normally. The intent is to deny offset for assets where the income is so token that it's clearly a private use case dressed up as an investment.

Section DG 21 gives two separate routes. You can elect to treat the income as exempt, claiming no deductions and declaring no income, if either of these applies for the year:

• Your income from the asset is less than $4,000
• You have quarantined expenditure for the year (a loss, with income less than 2% of the asset's statutory value), at any income level

The election is per-asset, per-year, and a company that owns the asset can't use it. If you elect out, you can't claim the apportioned deductions for that year — even the legitimate income-earning portion.