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Aussies unsure of how to declare Airbnb tax

09-airbnb-logo.w190.h190.2xAs Aussies scramble to get their tax returns filed on time, thousands of Airbnb hosts have been left scratching their heads, unsure of the rules and too scared to ask the Australian Tax Office (ATO). Airbnb Australia claims to have 40,000 hosts, each earning an average of $7,100 – this equates to almost $300 million in income.

In May, The Byte reported on the ATO issuing new guidelines for Uber and Airbnb, but those hosting travellers in their home were fine as long as they earned under $75,000. Airbnb Australia’s country manager, Sam McDonagh, said it was up to individual users to comply with local tax laws and declare the income in their annual tax return. “We’re 100 per cent tax compliant in every country we operate in and certainly for our hosts and guests, we advise them that they need to comply with all the taxation legislation wherever they are,” he said. “We encourage them to report all income that they earn in their tax return every year and that information is readily available for those hosts on the website.”

It’s not just the tax office, local council regulations are also vague. The City of Sydney, for example, does not permit visitor accommodation in residential areas.

An anonymous Airbnb listener told the ABC: “I didn’t want to ask the council because I didn’t want them to say no.” “If I was to run [my Airbnb listing] as a long-term lease it wouldn’t need council approval and, in my view, it shouldn’t matter if it is a short- or long-term lease.”

There is also the matter of insurance and public liability. Airbnb Australia said it was working on providing insurance cover for its Australian hosts. “We’ve rolled out comprehensive public liability cover in North America and that will completely cover Australia and New Zealand by the end of the year,” Mr McDonagh said.

Should there be clear guidelines for Airbnb users? Have your say.

Written by Alex Harmon

Source: ABC News





7 Responses

  1. Bruce says:

    What has $75.000 got to do with the price of fish? Holiday rentals are not subject to GST. So the only issue is if the rental income is being put on individuals tax returns and you would have to be a moron to think you didn’t need to declare such income. I’m sure most of this is already reported so why the media articles implying its not?

    • Danielle says:

      I believe the $75,000 they were referring to would be in relation to registering for GST as a business.

      As a business operation once your turnover figure exceeds $75,000 in a given tax year, it is a requirement to be registered for GST.

  2. Keith says:

    From the very first dollar you earn using Airbnb this is taxable income. Short-term rentals are NOT residential leases. The NSW Residential Tenancies Act is very, very clear on this matter plus the NSW Consumer and Administrative Tribunal (NCAT) has ruled that short-term letting agreements are NOT leases. Is that clear enough?

    Therefore, any income earned via Airbnb or any other internet platform where the ‘host’ is selling commercial short-term letting in a residential property is taxable income, and is probably a breach of the NSW Environmental Planning and Assessment Act.

    Talk to the Accommodation Industry about this. They pay all sorts of commercial rates and taxes. Those short-term letting should too.

  3. Julie says:

    But if you are earning income from letting a property, you can also off-set some of the costs associated with the property from your tax. You might even end up negatively gearing the property. So the ATO might lose money if every AirBnB landlord declared their income but also their expenditure.

  4. Declan says:

    Our building – the building alone – is worth a little under $200 million. That doesn’t include the contents belonging to a couple of hundred people. Add to this a figure which I’ve heard is in excess of $8 million if someone is killed, and usually more over the course of someone’s lifetime if they are permanently injured. At a recent Inquiry before members of the NSW State Parliament, no one could/would guarantee insurance coverage in the event of a major claim – and where short-term letting is not permitted, no Insurance Company is likely to pay. All said that ‘this is yet to be tested’. I don’t want to be the test guinea pig – in strata there is no limit to one’s liability.

  5. Geoff Jackson says:

    I know this post is a few months old but the tax issue is hotting up. There is an interesting article in the Australian Financial Review this morning that the Australian Taxation Office is “increasingly vigilant”. I discuss it in my blog if anyone is interested. http://lossforprofit.com/blog/

  6. Keith says:

    Hi Geoff
    It looks like Airbnb listings have jumped 71.5% in the last six months = 22,464 homes across Sydney lost to residents. That’s just Airbnb and that’s just Sydney.
    Some Local Govt Authorities say that in some areas of their shires they estimate 70-80% of housing are short-term lets.
    Add to that the foreign investors buying up housing and leaving it empty…we need to hear from Social Housing Groups and the NSW Tenants Union, who have stayed remarkably silent.
    Why do you reckon NSW State Parliamentarians look set to give Airbnb and Co a free reign with our homes – is it because so many of them are directly profitting from or supporting those that are short-term letting property they hold?
    Keith