AirBnb accommodation are a great way to offer short term rentals as they are more financially rewarding to the hosts and offers more flexibility to house owners in managing the property.

There are various aspects to be considered in preparing an AirBnb tax return some of which we have discussed here:

Rental income or business income

If you are renting out all or part of your house or apartment then it is said to be your rental income. GST does not apply to residential rental income. However, if you operate an enterprise like arrangement in renting out the place then it can be classified as your business income. In determining this, there are factors to be considered such as whether you own the place or are leasing the place, the level of revenue created or the kind of property being rented out etc.

AirBnb Deductions you could claim in full

–        Service fees, cleaning and commissions charged

–        Bathroom, Bedroom, Kitchen supplies

–        Safety equipment

–        Appliances and furniture

AirBnb Deductions you could claim partially

These expenses relate to shared areas of the place if part of the house was rented out. This includes expenses such as:

–        Mortgage interest

–        Council rates

–        Insurance

–        Utility bills etc.

The above mentioned expenses would need to be apportioned if the place was not available for rent for part of the year or if there was any private use of the property.

AirBnb and CGT

An AirBnb property is subject to Capital Gains Tax (CGT) at the time of sale since it has derived assessable income. Calculating CGT on an AirBnb property could be complex if the pattern of renting has changed over time such as private use, renting part of the house etc.

ATO Data matching

The ATO received information from digital platforms about income received by AirBnb hosts. This is carried out in order to educate taxpayers about their obligations to report the right income from AirBnb even if the level of activity was not significant.

We understand that you may have questions pertaining to this information. If you would like to find out more or discuss about your circumstance please feel free to contact us on 0452214559 and we will be more than happy to assist.