Blog: To Airbnb or to not Airbnb, that is the question

Kirsten Hawke

The idea of renting your accommodation through Airbnb seems like the perfect way to turn empty holiday homes or spare bedrooms into income earning assets.

Blog: To Airbnb or to not Airbnb, that is the question

On paper it sounds great but what are the tax implications?

The rules are complicated, to say the least so BUSINESS buddy has investigated the situation in New Zealand.

If you want to be an Airbnb host you need to consider your income tax situation, GST and your home ownership structure.

If you use Airbnb to provide short-term accommodation in your house in which you also live, the IRD’s mixed – use asset (holiday home)  rules don’t apply and guests are not classed as boarders.

The exception to this rule is when you list a whole house which is vacant for 62 days each year, mixed - use asset rules do apply and calculations differ from those for homes where the hosts also live. 

Airbnb claimable expenses

Anything you spend as an Airbnb service provider may be claimed as an expense.

For shared expenses, like power and internet, claims need to be fair and reasonable, which is the key.

Therefore, no claiming for two televisions because you have two eyes or spending thousands of dollars on essential alcoholic liquid for guests.

You can claim some utilities, rates, insurance and interest – and food and all other consumables that the guests use.

You can also claim depreciation on chattels and appliances used by guests only.

You can claim some depreciation on other shared chattels and appliances, like claiming a portion of utilities.

You will have to apportion your expenses and, to do that, you need to know:

  • The floor area used exclusively by Airbnb guests
  • The shared area used by you and Airbnb guests
  • Total number of guests, plus you and your family

So in a nutshell, if you spend money to keep your property attractive for guests, you can claim some of those costs.

GST on Airbnb

Unlike residential rent, GST applies to Airbnb.

You must register for and file GST if your turnover is anticipated to be $60,000 or more in the next 12 months.

Opening up your home to Airbnb guests can be an amazing and financially rewarding experience.

However, it will only stay that way if you keep good accounting records and provide accurate information to the Inland Revenue.

To talk further about this topic, or for any of your business needs, please do not hesitate to call BUSINESS buddy on 0800 283 399.

Kirsten Hawke