Tax depreciation on an Airbnb property
An Airbnb or short-term rental property qualifies for the same tax depreciation as any other investment property. The key difference from a standard rental is that many Airbnb properties are also used privately by the owner — which requires apportionment of all deductions, including depreciation.
Division 43 — Capital works
If your property was built after July 1985, you can claim 2.5% of the construction cost as a capital works deduction each year. This applies for the periods the property is genuinely used for short-term rental.
Division 40 — Plant and equipment
Airbnb properties typically have furnished and well-equipped interiors — which means strong Division 40 depreciation claims:
- Sofas and furniture
- Beds and bed frames
- Televisions and entertainment systems
- Kitchen appliances
- Outdoor furniture and BBQs
- Washing machines, dryers, and other white goods
- Smart devices (smart locks, security cameras, voice assistants)
Apportionment for private use
If you use the property privately for any period — including for your own holidays, family visits, or personal stays — you can only claim deductions (including depreciation) for the proportion of time it is genuinely rented or available for commercial rental.
If the property is rented through Airbnb for 200 days and used privately for 60 days, you can claim approximately 77% of your annual depreciation deductions (200 ÷ 260 active days, or time-based on 365 days depending on the method).
ATO focus on holiday properties
The ATO specifically targets short-term rental properties in its compliance program. Deductions on properties listed at unrealistically high prices or with unreasonable restrictions that prevent genuine bookings may be disallowed.