The way Australians travel domestically is changing. Holiday parks are becoming increasingly popular as more people are seeking flexible and budget-friendly options. In the first five months of 2022 holiday and caravan park revenue increased twenty per cent above pre-pandemic levels. 

With travel picking up again, now is the time for holiday park operators to ensure they’re taking full advantage of depreciation deductions. 

There are significant depreciation deductions available within holiday parks in both capital works deductions (Division 43) and plant and equipment depreciation (Division 40). 

Examples of claimable capital works deductions within a holiday park include reception buildings, playgrounds, BBQ shelters, picnic tables, swimming pools, cabins and amenity blocks. 

Examples of claimable plant and equipment assets include power units for powered sites, air conditioning units, furniture, blinds, linen, towels, jumping pillows and swimming pool filtration systems. 

In scenarios where a holiday park is leased to a tenant, both owners and tenants are eligible to claim depreciation deductions. Owners can claim depreciation for the building’s structure and any assets they own within the property. Tenants can claim deductions for assets they purchase and install during a fit-out. For instance, if a holiday park tenant upgraded the bathroom block such as new toilet bowls and sinks, applied a fresh coat of paint and installed new benches they would be eligible to claim the deductions for those upgrades. 

Case study: Depreciation deductions within a holiday park

‘Shore Holiday Park’ is located on the coast of Western Australia, is owner-operated and has many onsite facilities for guests including cabins, powered and un-powered camping and caravan sites, a large swimming pool, playground, water playground, a modern shower and bathroom block, laundry, convenience store, on-site restaurant, bar and café, BBQs, picnic areas and a recreation room. 

Shore Holiday Park is eligible for temporary full expensing as they make an annual turnover of less than $50 million. 

There are lucrative depreciation deductions found within Shore Holiday Park: 

In the first full financial year, the owner of Shore Holiday Park claimed $10,437,209 in depreciation deductions.

In the five years cumulative the owner of Shore Holiday Park claimed $10,950,809 in depreciation deductions.

Shore Holiday Park underwent renovations in year one, which explains the high first-year depreciation claim. 

As the owners of Shore Holiday Park applied temporary full expensing, they were able to claim qualifying plant and equipment assets as an immediate deduction, which explains the high first-year depreciation claim. 

To claim depreciation deductions holiday park operators should get in contact with a specialist quality surveyor to organise a site inspection. 

BMT is here to help with your commercial real estate evaluation. The team can provide obligation-free preliminary estimates on all types of commercial properties. 

To learn more about the depreciation deductions available in holiday parks call BMT on 1300 728 726 or Request a Quote.

The example used and the information provided in this article is of general use only and should not be used as a quote or advice. BMT recommend consulting an accountant before making financial decisions. Contact BMT for a specialised tax depreciation schedule.