IRS Guidelines: How Many Days Are You Using the Home for “Personal Use”?
In order to deduct the mortgage interest on your vacation home as “qualified home mortgage interest”, you need to use the vacation home for your own “personal use” for the greater of: 14 Days per Year or 10% of the number of days that you rent it out for fair market value.
For example, if you rent out the home for 100 days per year, you’d need to live there for at least 14 days per year. On the other hand, if you rent out the home for 200 days per year, you’d need to live there for at least 20 days per year. Keep in mind that “personal use” includes use by your immediate family including your spouse, brothers and sisters, half-brothers and half-sisters, ancestors (parents, grandparents, etc.), and lineal descendants (children, grandchildren, etc.).
Lending Guidelines: Do You Have Control of the Property?
You may still be able to treat the property as a second home for mortgage approval purposes if you rent it out for part of the year. In this case, conventional lending guidelines require that:
You must occupy the property for some portion of the year;
You must have exclusive control over the property; and,
The property cannot be subject to any agreements that give a management firm control over the occupancy of the property.