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Renting your property with AirBnB? Your tax implications explained.
Nov 17, 2019
Are you renting out your investment property with Airbnb?
You might be about to receive a letter from the Australian Tax Office (ATO) in the coming months. The ATO have been gaining access to Airbnb’s user database along with other digital platforms to gather information regarding tax payers renting out their investment properties.
The ATO will be matching tax returns lodged with income declared for rental properties to ensure the digital platform rental income has been included in their tax returns. If you have made a mistake you can expect a stern warning or worse an audit if the return isn’t amended by the requested date. The ATO have stated the main objective “is to identify and educate those individuals to ensure they include the correct amount of rental income from these sources in their returns and pay the appropriate tax.”
As part of renting out all or part of your residential house or unit through a digital platform, like Airbnb, Home Away or Flipkey, you will need to keep records of all income earned which are generally provided on statements from the platforms along with receipt records of expenses paid on the property to claim as a tax deduction.
Deductions that you can generally claim can include:
- Council Rates
- Interest on a loan for the property
- Electricity and Gas costs
- Property Insurance
- Cleaning and Maintenance costs including repairs
- Appliances and Furniture
- The commission charged by the platform
If you are renting out via a sharing platform you also need to consider the number of weeks the house has been rented out and available for rent and apportion these accordingly for the private weeks if you are using the house yourself during the year.
With so many possibilities available to you with property these days, whether it be short term Airbnb holiday homes, home sharing or permanent tenants, it is important to get the right advice to ensure you aren’t left with a bill from the ATO when your taxation return is assessed.
Contact our friendly staff
at Mulcahy & Co to schedule an appointment to discuss your investment property tax implications.
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