Being at the forefront of a disruptive new sector can offer big opportunity, but disruption can also come coupled with government and regulatory uncertainty.
This has definitely been true in the ATO’s approach to keeping Airbnb hosts and property investors informed as to how they need to collect and pay tax.
While some aspects of Airbnb tax collection are relatively straightforward (yes, you need to include booking income and expenses on your tax return), the correct approach for the collection and payment of GST (especially for owners who hold property in an SMSF or company structure) have stumped even the savviest bookkeepers.
Recently, however, The ATO has clarified some of this uncertainty via a recent update on The sharing economy and tax.
For the first time, it now appears there is some certainty that the default approach most owners have been applying to Airbnb GST obligation is the correct one.
The ATO outlines the following example below:
Yes, thankfully in this instance common-sense prevails. GST is not to be collected for short-stay booking at a residential property.
The ATO’s further clarifies that this GST approach applies even if the residential property is owner under a corporate structure:
While this clarification is comforting, We are property managers, not accountants, and everyone’s tax situation is different so please speak to you licensed tax professional for any additional clarification.
You can refer to this article for further details from the ATO: The sharing economy and tax.