Inland Revenue has recently published a factsheet outlining the tax rules that apply to “mixed-use” asset holiday homes. Owners of “mixed-use” holiday homes will have to calculate their income tax obligations differently from the beginning of the 2013/14 income tax year.
Essentially a holiday home is a mixed use asset “… if during the tax year, your property is used both for ‘private use’ and ‘income-earning use’, and it’s also unoccupied for 62 days or more”.
The mixed-use asset rules don’t apply in situations where “… a residential property is used for long-term rental, or a home office and your expense claim is based on floor area”.
Various exemptions apply and these are noted by Inland Revenue in the form together with a worked example of calculations required for a mixed-use holiday home.
Read the fact sheet here: