Airbnb Tax Advice for Australians

If you manage or run an Airbnb or short-term rental property in Australia, you may be looking for personalised tax advice and wondering how the Australian Taxation Office (ATO) classifies the income you generate.

Most of the time income from these types of properties is deemed to be investment income, however, in a very small percentage of cases, it will fall into the category of business income.

We recommend that you get the correct tax advice before you begin renting out your property or rooms within it.

And that’s where we come in – here at Stellar Accounts, our Certified Practising Accountant and Registered Tax Agent specialises in Airbnb other short-term accommodation types and can discuss your personal situation and offer personalised advice.

Where To Put Airbnb Income on Tax Return Australia?

The ATO says it is “rare for someone to be carrying on a business because they are renting out a property.”

In fact, about 95 per cent of the time income generated from an Airbnb or short-term rental is classified as investment income, which means that rental income should go onto your income tax return. For that vast majority, no GST can be added to the rent and no ABN is needed.

But if you are deemed to be carrying on an enterprise renting out commercial residential premises, your GST and income tax obligations will be different from someone who is generating investment income from the accommodation.

The ATO says commercial residential premises include:

  • hotels, motels, inns
  • hostels, boarding houses
  • caravan parks, camping grounds
  • other establishments that provide similar services to the above.

More about commercial residential premises and GST on the ATO website here.

Not sure if your Rental is classes as a business?

To determine if you’re running a business, the below are just a few things the ATO will take into consideration:
1. You have multiple properties you use as short-term rental accommodation
2. You do not live in the property
3. The rental properties are your ONLY source of income
4. You manage all aspects of the business yourself – ie manage bookings, arrange maintenance and cleaning etc

A situation that may be deemed as running a business may be that you have multiple rooms, occupancies at the same time, similar to a motel or hotel, backpackers.

We believe that people who aren’t sure if their income is investment or business related should request a private ruling from the ATO.

If you’re still not sure about what type of income you’re generating, Stellar Accounts is always happy to help so please reach out to us here. We also share more information on the topic in this blog.

Why Choose Stellar Accounts for Your Airbnb Tax Advice

  • We specialise in Airbnb and other short-term accommodation types. Plus, we understand what related expenses you can and cannot claim (5 deductions you can claim are outlined in this blog here!)
  • We operate solely online and over the phone, so you can be anywhere in the country utilise our services
  • As a privately-owned small business, we strive for the best results for each client
  • 20+ years-experience in audit, financial accounting, taxation and bookkeeping

Click here to contact our fully qualified Certified Practising Accountant and arrange a phone or zoom chat to prepare your tax return.

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Stellar Accounts is Brisbane’s leading small and new business accounting firm. We have a reputation for simplifying your accounting, tax and bookkeeping needs so you don’t need to stress or worry.

With more than 20 years’ experience across a wide array of industries – our clients (typically small and medium sized businesses) – gain a distinct advantage over their competitors because we keep them in the loop of the latest information and regulatory requirements. Call us on 0428 887 104.

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