Using your home to generate more income is great, but you may be wondering – do you pay tax on Airbnb income in Australia?
The answer is yes, you must pay tax on Airbnb income in Australia. Income earned using short term property rental platforms such as Airbnb or Stayz must be declared to the Australian Tax Office (ATO) as income.
In this blog, Stellar Accounts CPA Debbie Hoffman explains four essential things you need to know when it comes to Airbnb tax implications. If you have any questions, feel free to reach out to us here.
Tax Implications of Running an Airbnb
- Any income earned from short term property rentals must be declared
Always declare income generated via short term rentals such an Airbnb on your tax return.
You may be surprised to learn that the ATO has many data matching processes and receives income information streamed direct from many holiday providers like Airbnb and Stayz.
So, if you do not report your income and you are identified via data matching processes, you could be fined and penalised for failing to report this income to the ATO.
- Airbnb isn’t classed as business income by the ATO, but you should treat your record keeping like one!
While the ATO doesn’t class monies earned via Airbnb (or similar) as a business, it pays to have business like systems in place for your record keeping.
We strongly recommend:
- Ensuring that you keep records of all income and associated expenses as you go throughout the year.
- Putting money aside to meet possible tax implications (and avoid being caught out at tax time).
- Obtaining landlord permission if subletting or leasing a room on a short-term basis.
- Being aware of Capital Gains Tax issues if you rent a room in a home that you own.
- GST and Airbnb rent
GST does NOT apply to residential rent. This means that you cannot claim GST on expenses related to generated rent income.
But the rules are different if you provide accommodation in commercial residential premises, such as a hotel room, serviced apartment or a bed and breakfast.
- Tax deductions you can claim for an Airbnb
If you run an Airbnb, you can claim certain deductions on your tax return. These include:
- Commercial cleaning of the rented area
- Repairs and maintenance
- Food, such as breakfast provisions made available to the guest
- Professional photography for the listing
- Service fees and commissions charged by Airbnb
- Internet, phone and cable TV costs
Why Choose Stellar Accounts?
If you use a property for Airbnb and need help preparing your tax return or looking from some expert advice, here are 4 reasons Stellar Accounts could be the right partner for you:
- We are an Airbnb specialist – working with clients to help them understand obligations and get the best tax results possible.
- We will make you aware of any tax implications if friends or family stay in your Airbnb.
- Debbie Hoffman from Stellar Accounts is a CPA and Registered Tax Agent.
- Our Airbnb/Investment Property Tax Returns are very affordable (from $175) and can be completed online saving you time and money!
- We can also take care of all of your tax, bookkeeping and any other accountancy related matters all in the one place and all online too.
Do you pay Tax on Airbnb income in Australia?
We hope this blog has helped clarify any questions you had about paying tax on Airbnb income in Australia.
For more personalised advice from our CPA, Debbie Hoffman, we’d be happy to help! Enquire online here or call us 0428 887 104.
Find out more about Airbnb and Investment Property Tax Returns here.
Stellar Accounts is Brisbane’s leading small and new business accounting firm. We have a reputation for simplifying your accounting, tax and bookkeeping needs so you don’t need to stress or worry.
With more than 20 years’ experience across a wide array of industries – our clients (typically small and medium sized businesses) – gain a distinct advantage over their competitors because we keep them in the loop of the latest information and regulatory requirements. Call us on 0428 887 104.
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