How High Earners Can Leverage the Augusta Rule to Rent Their Home Tax-Free

If you’re a business owner or high earner with a home in a desirable area, you may be sitting on a hidden tax break — even if you never thought of yourself as a landlord.

It’s called the Augusta Rule, and it allows you to rent your personal residence to your business (or others) for up to 14 days per year, tax-free. It’s a little-known strategy used by everyone from consultants to real estate investors to executives who host corporate events, retreats, or off-site meetings.

Named after the residents of Augusta, Georgia — who wanted to rent out their homes to Masters tournament attendees without triggering IRS taxes — this provision of the tax code is perfectly legal and highly underutilized.

How It Works

Under IRC Section 280A(g), if you rent out your home for 14 days or fewer in a calendar year, the rental income is completely excluded from your taxable income. You don’t need to report it on your tax return. At the same time, your business can deduct the rental expense — making this a powerful deduction strategy.

In practice, this means your business gets a tax deduction for renting space (like a living room, office, or backyard) for events such as:

• Strategic planning meetings

• Content creation or client filming

• Investor dinners

• Board or leadership retreats

• Marketing workshops

And you, as the homeowner, receive that rental income tax-free.

Practical Example

Let’s say you own a consulting business and decide to hold quarterly planning meetings and a few client events at your home. You document the use, take meeting notes, and rent the space to your company at $1,200 per event — a fair market rate based on comparable venues in your area.

• That’s $1,200 × 12 days = $14,400 in total rent paid.

• Your business deducts the $14,400 as a legitimate expense.

• You personally receive $14,400 tax-free — with zero income tax liability.

What You Need to Document

To stay compliant with the IRS:

• Make sure the use of your home is for a legitimate business purpose.

• Determine market rates using event space platforms like Peerspace or local hotel conference room rates.

• Create a simple invoice from yourself to your business.

• Keep meeting agendas, invitations, and receipts.

This documentation shows that your business incurred a legitimate expense and that the amount paid was reasonable.

Can You Pay Yourself Rent Monthly?

No. The Augusta Rule only applies to 14 total days per year, and once you exceed that limit, you must report the rental income and can no longer use the tax-free provision. It’s ideal for periodic, documented use, not ongoing business operations.

Who This Works Best For

This strategy is especially beneficial for:

• S Corp or C Corp owners

• Coaches, consultants, or service providers who host events or meetings

• Real estate professionals with staging or team sessions

• Content creators who use their home for branded shoots

Even if you’re not in a traditional office-based business, this strategy is often easier to justify than people think — especially with good documentation and fair pricing.

Final Thoughts

The Augusta Rule is one of those rare tax strategies that gives you a double benefit: a deduction on your business side and tax-free income on your personal side. When used strategically, it’s a simple way to move money from your business to your personal bank account — tax-free.

Want help setting this up or determining the right rate to charge your business?

Book a free strategy call and let’s walk through your options.