The ATO is cracking down on any income earned from short term rentals on platforms like AirBNB and Stayz. The income reported on the tax return will be checked against the income recorded with AirBNB or Stayz. Over claiming on deductions will also be examined. For example, if only one room is rented out deductions cannot be claimed for the whole house. The ATO can also check bank accounts so it is important to report all income earned.
Tax pointers for short term rentals
Keep records
All income needs to be declared, even if it is a one off rental
You can claim deductions for expenses incurred in renting the property. Again keep records!
All deductions need to be proportional to the amount of time the property (or room) is rented. This means, if you rent one room, you can only claim deductions for that portion of the accommodation, for the time the room was available.
If the accommodation is rented to friends or family at below market rates, then the deductions cannot exceed the income earned.
Short term rental activity will probably impact on the main residence CGT exemption when selling your property.
If you need more information on the tax implications of short term rentals please contact our office and we will be happy to help. Always easier to have it set up correctly from the beginning.
