AirBnB Tax

AirBnB Tax Implications

Short Term Rentals like AirBnB are becoming more popular as the returns have a greater potential yield than a traditional long term client. However the rules are slightly different when it comes to tax. Let us help you make sure you aren’t going to get caught out at tax time.

Scenario 1

You own your own home and have a room or two spare and want to rent it out for a few nights a year.
If you earn under $4,000 you may be exempt. If it is over that amount there are a few options available depending on how often you rent it out.
You may be able to apply a standard-cost per night if the total room nights is under one hundred nights or you will need to follow the normal income tax rules.

Scenario 2

You own a rental home and decide to rent it for AirBnB instead of a long term residential rental with no personal use.
If it is only short term accommodation for other i.e. you and no closely related people use it you may be able to claim all of the expenses related to the property. Normal income tax rules would apply

Scenario 3

Holiday Home used personally and for AirBnb
Mixed use rules may apply if the property is vacant over 62 days a year. If it is not vacant for over 62 days you can apply income and expenses per the normal tax rules.
Typically you would apportion certain costs like Interest costs based on area used and days in use. This differs from the standard rules as it is based on days in use rather than a full year. Days in use includes personal use days and rented days. Other costs would be applied if they directly relate to the rental income generated in the property.

GST Issues

As AirBnB is considered a commercial operation you may have to register for GST if your income goes over 60k in a financial year. The main issue that can arise with AirBnB is that personal use is considered when working out if you go over the 60k Threshold. You need to record how many nights are used personally or by family and friends and apply the market rent to those nights. You would then add that figure to your actual rental income to see if you are over the threshold.
Can occur through personal use or if the property is held within another entity that is GST registered.

We recommend speaking to a specialist to make sure you get your accounts right when it comes to short term rental accommodation. Speak to Amy or Jeremy to make sure you are on the correct path.