Renting out your place for the summer? Here’s how the tax works.
As summer approaches, many homeowners are preparing to list their properties for short-term stays. It can be a great way to earn extra income, but it also comes with tax responsibilities that shouldn’t be overlooked. Here’s what you need to know about the tax side of short-term rentals.
Airbnb income is taxable
Any income earned from short-term rentals is taxable, whether you host through Airbnb or any other short-stay rental platform. Even if it’s just a few weekends here and there, it needs to be included in your annual tax return.
The good news is you can usually claim expenses related to hosting, such as cleaning, insurance, rates, and even a portion of your power bill, depending on how much of your home is used for guests.
The short-stay standard-cost method
If you’re renting out part of your main home for fewer than 100 nights a year, you might qualify for the short-stay standard-cost method. This allows you to use a fixed nightly rate to calculate your income, and anything earned up to that rate is exempt from tax.
For the 2024–25 income year:
$63 per night if you own the home
$57 per night if you’re renting it
Anything earned above these thresholds is taxable, and you’ll need to file a return.
GST obligations and threshold
If your Airbnb or short-term rental income exceeds $60,000 in any 12-month period, you’ll need to be GST registered.
From 1 April 2024, all online booking platforms such as Airbnb, Bookabach, and Holiday Homes must now automatically collect and pay GST on your behalf, even if you’re not GST registered.
If you’re not registered, Airbnb will still collect 15% GST from your guests and pass 8.5% back to you as a flat-rate credit. That credit is considered income, so it’s taxable too.
Get advice before you list
Short-stay rental rules can be complex, especially when it comes to interest deductibility, mixed-use property, and bright-line. Getting advice early helps you:
Understand what applies to your property
Maximise deductions and credits
Plan for GST and income tax obligations
Avoid surprises at tax time
If you’re planning on listing your property this summer, our team can help you set things up right so you can focus on enjoying the season with confidence.