Airbnb rental income is taxable

Using sharing apps like Airbnb to rent out a room in your house is taxable. You can only claim expenses related to the part of the house you rent out and you need to apportion the expenses accordingly. However, you can claim 100% of any fees or commissions charged by the rental facilitator or administrator.

You may lose the 100% Capital Gains Tax exemption for your residence even if you are living there permanently. Something to consider with the soaring capital growth of the Australian residential property market.

What deductions can I claim?

The types of expenses that you can claim for renting out all or part of your house or unit using a sharing economy website or app are the same as if you had a rental property. Common expenses you can claim include:

• fees or commission charged by the facilitator or administrator
• council rates
• interest on a loan for the property
• electricity and gas
• property insurance
• cleaning and maintenance costs (products used or hiring a commercial cleaner).

Whether all or part of the expense can be claimed will depend on:

• the proportion of the year you rent out the house or property
• the portion of the property you have rented out (for example, a room or the whole property)
• whether you use the home or part of the house for personal use when it is not rented out.

Your rental income and expenses are declared in a separate schedule as part of your tax return. Your property details will be noted by the Australian Taxation Office and they will cross check with other government agencies to ensure amounts are declared. When you sell your property, the Australian Tax Office will be expecting your tax return to reflect an amount for Capital Gain/losses in the year of sale.

Feel free to contact our team here at Burwood Tax Returns for more information.