Airbnb Rental Income

With the increase in people using the sharing economy to supplement their income, for instance with AirBnb and Stayz, it’s helpful to keep in mind the tax implications these sorts of earnings can have.

If you rent out part or all of your home on a short-term basis at normal commercial rates, the tax treatment of the related income and expenses is the same as for any residential rental property. This means you must include the rental income on your income tax return, and you will be able to claim deductions for associated expenses.

You cannot claim expenses incurred for the home when it is not available for rental and if you are only renting out one room or part of the home, you can only claim the relevant portion of the total expense. Generally, you should apportion expenses based on the floor-area of the room or area occupied by the guest. You can add to that a reasonable amount based on their access to common areas of the house or unit.

Some of the expenses related to AirBnb income that may be apportioned and deducted against the rental income are:

• Internet and phone line costs
• Water, electricity and gas
• Council rates
• Maintenance and repairs
• Cleaning and laundry costs
• Interest on a home loan
• Depreciation on new furniture and equipment
• Home & contents insurance
• Food and supplies offered to the guest
• Fees from Airbnb and Stayz

As the income is assessable income and needs to be included on your annual tax return, you need to keep records of all your Airbnb income and related expenses, including dates the home or room was available for rental so they can be properly apportioned.

We have a downloadable spreadsheet you can use to record your Airbnb rental income and expenses here.

There may also be capital gains tax (CGT) implications if you are earning income from renting out your home or part of your home through these websites. Generally, your main residence is exempt from CGT when you sell, however, if you’ve used any part of your home to produce income, you may not be entitled to the full exemption on CGT. The floor area calculation used to work out the portion of your deductible expenses can also be used here to work out what portion of the gain may be taxable.

Disclaimer

This is not advice. Items herein are general comments only and do not constitute or convey advice per se. The information contained in these articles is for guidance only and should not be relied upon without obtaining professional advice having regard to your direct circumstances.