Guests shouldn’t have all the fun—homeowners deserve a vacation too. One of the best perks of investing in a vacation rental? Owning a personal vacation spot you can escape to whenever you want. A place where you can plan a family reunion, get away for a romantic weekend, or gather the friends together for some R&R.
Before reserving those dates on your calendar, there are some things to think about to help ensure you’re still making money, while making those vacation memories.
The short answer—as often as you’d like. However, here are some things to consider:
Your tax bill depends on the amount of time you (or your friends and family) stay at your vacation home versus how often you rent it. An important tax rule concerning your personal visits is the 14-day rule.
Staying at your property more than 14 days of the year? Or, more than 10% of the total days you rent it to others at a fair rental price?
The IRS will generally classify your vacation home as a residence, rather than a business. You may be able to write off some expenses, but not all costs associated with renting.
Staying at your property 14 days or less in the year?
The IRS will generally classify your home as a business—so you can write off relevant business expenses.
Vacation rental tax rules are complex and there are varying situations and caveats to the 14-day rule that come into play here. Whether you want your vacation home classified as a residence or a business, work with a tax professional to make sure you’re following all the rules.
When you manage with Vacasa, we keep track of how often you’ve stayed at your home —and provide all the information you and your tax professional will need to fill out the right form come filing time.
As you’ve learned above, your tax deductions and how much you owe at tax time depend on the amount of time you spend at your vacation home for personal purposes. But, here’s the kicker—your friends’ and family’s stays can count toward that personal time.
According to the IRS, here’s whose stays count towards personal use:
Use your high and low seasons as a guide. Understanding your vacation home’s busy and slow periods can help you plan your own stays. Many holidays—such as Memorial Day and 4th of July—can fetch top dollar from paying guests. So, many homeowners leave those long weekends open for lucrative bookings.
Some seasons are busier than others. For instance, ski towns fill up in the winter with skiers and snowboarders, while coastal areas attract droves of summer travelers. Some places aren’t as cut and dry. Winter on the Oregon coast is rainy and chilly, yet still attracts visitors looking to storm watch.
According to the IRS, personal use of your vacation rental is “use by the owner, owner’s family, friends, other property owners and their families. Personal use includes anyone paying less than a fair rental price.”
Generally, time spent maintaining your vacation rental does not count against your personal use. Even staying a week conducting repairs and fixing up your home does not have to be reported to the IRS. The easiest way to block your home for a personal stay is with our homeowner app.
Your vacation home is first and foremost yours. However, your personal use could be taking up days that otherwise could earn income, and affect how the IRS classifies your home and its revenue. At Vacasa, we document and provide you with all of the information you and your accountant will need to maximize your investment and keep you in compliance.
An investment property is a property (or piece of land) that you buy to generate income, as opposed to a property you purchase to live in or occupy as an office. With an investment property, you can earn income in several ways, including:
Yes, you can stay at your vacation rental for free. Your vacation home is first and foremost yours. However, your free stay could be taking up days that otherwise could earn income. Many homeowners also offer up their vacation rental to their friends and family for free (or a discounted rate) or donate a few nights to charity auctions—both which are considered personal use by the IRS.
Call 844-518-0967 to speak with a Homeowner Consultant, who can answer preliminary questions and see if we’d be a good fit for you.
If you'd like to move forward, we’ll put you in touch with our market expert in your neighborhood to explore the financial potential of your home, outline our management fee, and introduce your local team.
Vacasa offers property management and other real estate services directly through Vacasa LLC and through Vacasa LLC's licensed subsidiaries. Click here for more information about Vacasa's licensed real estate brokerage/property manager in your state. Vacasa’s licensed real estate brokerages/property managers include: Vacasa Alabama LLC; Vacasa Arizona LLC; Vacasa of Arkansas LLC; Vacasa Colorado LLC (Micah Victory); Vacasa Delaware LLC, 302-541-8999; Vacasa Florida LLC; Vacasa Illinois LLC 481.014072, Micah Victory Managing Broker Lic# 471.021837; Vacasa Louisiana LLC, Dana MacCord, Principal Broker, ph 504.252.0155 (Licensed in LA); Vacasa Michigan LLC, 602-330-9934; Vacasa Missouri LLC, Vicki Lyn Brown, Designated Broker; Vacasa Nevada LLC; Vacasa New Hampshire LLC,45 NH-25, Meredith, NH 03253, Susan Scanlon, Broker of Record; Vacasa Minnesota, Broker: Micah Victory, license #40877637; Vacasa New Mexico LLC, 503-345-9399; Vacasa New York LLC, 888-433-0068, Susan Scanlon, Real Estate Broker; Vacasa North Carolina LLC; Vacasa Oregon LLC; Vacasa Pennsylvania LLC; Vacation Palm Springs Real Estate, Inc., California DRE #01523013, Mark Graham, California DRE #00700720; Vacasa Real Estate LLC (licensed in Texas, Debra Brock, Designated Broker); Vacasa Real Estate LLC (licensed in Washington, Robert Brush, Designated Broker); Vacasa Seasonals Inc., California DRE #02160171, Lisa Renee Stevens, California DRE #01485234; Vacasa South Carolina LLC; Vacasa South Dakota LLC; Vacasa Tennessee LLC; Vacasa Vacation Rentals of Hawaii LLC, 69-201 Waikoloa Beach Dr. Ste. #2F17, Waikoloa, HI 96738; Vacasa Vacation Rentals of Montana LLC, Terah M. Young, Licensed Property Manager; Vacasa Virginia LLC; Vacasa Wisconsin LLC; Vacasa Wyoming LLC. In Canada, this advertisement is provided by Vacasa Canada ULC, CPBC lic. number 75826, 172 Asher Rd. V1X 3H6 Kelowna, BC.