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.

Quantifiable 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.

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 yield is less than 2% of its market 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 released only when the asset is sold for an arm's-length amount that produces non-loss income

The 2% threshold is calculated on the asset's market value at the start of the income year — not at original purchase. A $1m bach earning $15k/year has a 1.5% yield: any loss is quarantined. A $400k bach earning $15k 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.

If your gross rental income is under $4,000 for the year, you can elect not to claim any deductions and not to declare the income — the asset is invisible for tax purposes. This is sensible when:

• The income is small (under $4,000)
• Your loss would be quarantined anyway (yield < 2%)
• The paperwork burden of MUA tracking outweighs the benefit

The election is per-asset, per-year. You can elect in or out each year as circumstances change. If you elect out, you can't claim the apportioned deductions for that year — even the legitimate income-earning portion.