Can I do a 1031 exchange on a vacation home?
Sometimes. A vacation home qualifies for a 1031 exchange only if it’s genuinely held for investment rather than personal enjoyment. The IRS offers a safe harbor: rent it at market rate at least 14 days a year and limit your personal use to no more than 14 days (or 10% of rented days) for the two years before and after the exchange.
A pure second home you use yourself doesn’t qualify — the property has to be an investment. Meeting the rental/personal-use safe harbor (from Revenue Procedure 2008-16) is how a vacation property can be brought inside §1031.
The same logic applies on both ends of the exchange. Because personal use is fact-specific, document your rental activity and get advice. Related: can I 1031 into a primary residence.
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General education — not tax or legal advice. This explains how §1031 exchanges work in general terms and uses simplified assumptions. Rules and tax rates change and your situation is specific. Talk to a qualified CPA or tax attorney before you rely on any of it. See our full terms & legal notice.