Thinking about hosting on AIRBNB? It’s a smart way to earn extra income by renting out your space to travelers. But remember, any money you make needs to be declared for taxes in Australia. Whether you’re renting a room or a whole property, it’s important to understand your tax obligations. Remember, fulfilling tax obligations doesn’t solely entail paying taxes on your income; you’re also entitled to deductions for expenses incurred to generate that income. So, let’s navigate through all the provisions related to AIRBNB in this article.  Tax agents can provide the best advice considering the various claimable expenses through their tax returns services.

Is GST applicable for AIRBNB?

AIRBNB earnings are not subject to Goods and Services Tax (GST), meaning you’re not responsible for charging GST on the income you collect, nor can you claim GST credits for related expenses. This rule applies even if your turnover surpasses the GST threshold of $75,000. 

Do you need to get an Australian Business Number (ABN)?

You don’t need an ABN to rent out your home on AIRBNB. It’s treated like regular rental income, not business income, but it’s advised to keep track of your earnings and expenses.

Expenses claimable as an AIRBNB tax deduction

You’re eligible to claim several tax deductions linked to your AIRBNB rental. Yet, if you’re only renting a portion of your home, it’s crucial to allocate these deductions accurately. The ATO is closely monitoring over-claiming expenses in the short-term rental sector. It is advisable to use tax return services of a Tax accountant or Tax agent to claim and report the expenses accurately. 

Deductions you might claim for AIRBNB include the following. 

Direct Expenses: Expenses directly associated with operating an AIRBNB hosting are fully deductible. While the list is not exhaustive, examples include:

• Cleaning of the rented area,
• Repairs and maintenance in the rented area
• Cost of food or any provision made to the guest.
• Listing and management fee in AIRBNB.
• Any Photography or advertisement cost.
• Any purchase made for appliances in the rented area.
• Depreciation for the assets used in the rented area.

Other Expenses: The deductible portion of expenses is contingent upon the area of the property utilized for AIRBNB. If the entire property is dedicated to AIRBNB rentals, all expenses are deductible. However, if only a portion of your property is used for AIRBNB, you should allocate expenses for deduction accordingly. Such deductible expenses include following:

• Water, Electricity, and Internet Cost.
• Council Rates
• Property Insurance
• Mortgage Interest Rate

Tax rate on the income from AIRBNB.

The net income from AIRBNB, after deducting relevant expenses, is considered taxable income, and must be reported in your annual income tax statement. There is no separate tax rate for this income; instead, it aligns with your individual tax rate determined by your income.

Attraction of Capital Gain Tax (CGT)

Usually, capital gains tax (CGT) doesn’t apply when selling your primary residence. However, if you’ve rented out your home on AIRBNB, even temporarily, a portion of the gain from selling the property may be subject to CGT.

The CGT period commences when the property first generates income, and the proportion of gain is determined based on the rented floor area, mirroring the method used for apportioning expenses. Consult a tax accountant or tax agents or tax professionals for best advice on capital gains tax for properties rented out on AIRBNB.

Fortunately, if you’ve owned the property for over 12 months, you’re eligible for the standard 50% CGT discount, effectively halving your liability.

FAQs About AIRBNB Tax Obligations in Australia

Do I need to pay tax on AIRBNB income?

A. Yes, any income earned through AIRBNB must be reported to the Australian Taxation Office (ATO) as part of your taxable income.

Q. Is GST applicable to AIRBNB income?

A. No, AIRBNB income is GST-free. You don’t need to charge GST on your earnings or claim GST credits for related expenses, even if your turnover exceeds $75,000.

Q. Do I need an ABN to host on AIRBNB?

A. No, AIRBNB income is considered rental income, not business income. You don’t need an ABN but should keep accurate records of your income and expenses.

Q. What expenses can I deduct from my AIRBNB income?

A. You can deduct both direct and indirect expenses, such as:

• Cleaning and maintenance costs.
• AIRBNB listing fees.
• Utilities like electricity, water, and internet.
• Property insurance and mortgage interest (apportioned if only part of the property is rented).
  Note: Expenses must be accurately apportioned if you only rent part of your property.

Q. How do I calculate tax on my AIRBNB income?

A. Net AIRBNB income (income after allowable deductions) is taxed at your individual income tax rate. Ensure all deductions are accurately recorded to minimize your taxable income.

Q. Does hosting on AIRBNB impact capital gains tax (CGT)?

A. Yes, if you sell your property after renting it on AIRBNB, the portion of the property used for AIRBNB may attract CGT. The percentage of assessable gain is based on the floor area and rental duration. However, you may qualify for a 50% CGT discount if the property was held for more than 12 months.

Q. Can I claim the full cost of expenses if I only rent part of my home?

A. No, you must apportion expenses based on the area rented and the duration it was rented out. For example, if 25% of your property is rented, only 25% of the expense is deductible.

Q. Are there risks in over-claiming expenses?

A. Yes, the ATO closely monitors short-term rental deductions. Over-claiming can lead to audits and penalties. It’s advisable to consult with a tax professional to ensure compliance.

Q. How do I keep track of my AIRBNB-related finances?

A. Maintain detailed records of:

• Income from AIRBNB bookings.
• All receipts for deductible expenses.
• The portion of your property rented and the rental duration.

Q. Should I consult a tax professional for my AIRBNB taxes?

A. Yes, tax laws are complex and vary depending on your circumstances. A tax accountant or agent can help you maximize deductions, comply with ATO regulations, and minimize risks through tax return services.

In conclusion, though hosting on AIRBNB provides an easy way to get some extra money coming in, it equally creates some reporting obligations to the ATO and confusion about claimable expenses. Tax laws are sometimes complex, and it may change with your circumstances. Hence, engaging on tax return service with the best tax accountant in Perth is highly advisable for compliance with the tax obligations on AIRBNB in Australia.

Use our Tax Calculator tool to evaluate your personal tax situation. At TFP Tax Return Services, we specialize in individual tax returns managing everything from simple to complex cases. Our experienced Tax Agent, Tax Accountant, or Tax Advisor is just a call away to assist with your tax matters.

We’re here to help—get started by filling out your enquiry form at

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