Airbnb has become hugely popular since its emergence in California in 2008 and is now present in over 190 countries. Using apps and its website, Airbnb is able to advertise millions of properties world wide for individuals or groups seeking accommodation. Additionally, it allows property owners to rent out a portion or the entirety of their premises. While Airbnb is a great source of additional income there are certain tax implications you must be aware of as a result.

Income Tax

Under the arrangement with Airbnb the host receives a fee from the guest. Airbnb withholds a percentage as a host service fee from this payment. However, for tax purposes you must include the total amount that is paid by the guest. The host fee is deductible in addition to:

  • Holding costs such as interest, rates and land tax
  • Non holding costs such as utility costs, repairs and depreciation/decline in value.
  • General expenses (breakfast, welcoming baskets and towels etc.)

It is important to remember that deductions should be apportioned to represent any private usage of the property or instances when the property was not genuinely available for rent.

Capital Gains Tax (CGT)

Generally your principle place of residence (PPOR) is exempt from capital gains tax. However, if a residence has been used to provide Airbnb accommodation only a partial main residence exemption is available. The extent to which the partial main residence exemption is available will depend on the period that your home was used for producing income.

GST

Generally a supply of accommodation via Airbnb is an input tax supply of residential rent and is not subject to GST. However, it may be considered a supply of accommodation in commercial residential premises if provided on a larger scale. In this case the GST provisions may apply.

If you have previously used Airbnb to rent out all or part of your premises, or you are looking to do so and are unsure of your tax obligations contact us here at The Quinn Group on (02) 9223 9166 or submit an online enquiry form today.

Our dedicated tax team will be able to assist with any queries you may have.