There has been a rise in popularity recently of using Air BnB (or similar) to rent out a spare room or a holiday home to earn some extra money.

Unfortunately, some people don't think of the tax implications that this could cause. It's important to be aware that any income that you receive (less any costs associated) will need to be included in your tax returns and have income tax paid on this amount. If it is a holiday home that is being rented out then the mixed use asset rules will apply, apportioning deductible and non deductible expenses based on days rented and days used personally.

Another consideration is GST consequences. Because the rental received is short-term, this can potentially be subject to GST. The threshold to register for GST is $60,000, and whilst your Air BnB income may not take you over this you need to consider any other income that you already earn. Also, if you are already GST registered, then you will need to account for GST on your short term rental income as well.

If you are considering, or have been renting out a space, then don't hesitate to contact us to discuss your tax requirements. And don't forget about any other implications of renting out your own space, such as insurance. Your insurance company will want to know if there are tenants in the property, and will recommend specialised insurance for this.