Similarly to last year, users of the highly popular Airbnb platform will struggle to get away with illegal deductions on their 18/19 tax return.
The ATO have announced that they will make a significant effort to track down nearly $8.7 billion in expected tax revenue.
By making use of modern data-matching technology, the ATO can receive information regarding the use of homes being rented online. They can compare your property against others in the area to ensure you are within a similar tax bracket. If not, you will become a target for inquiry.
In particular, the ATO believe there will be a number of incorrect claims during periods of no tenancy. In order to claim any deductions, tax payers must have evidence that their home was available in these periods and not used for private purposes.
There are a number of tax laws and regulations surrounding online rental deductions. Some of the major notes to remember include:
- The income you receive is definitely taxable, contrary to what you might have heard.
- Some expenses can be claimed in full, like the cleaning, depreciation on furniture used, Airbnb fees etc.
- Other expenses (interest, rates, electricity, etc) can be claimed but must be apportioned based on how much of the house has been rented and how much of the house is to be shared.
- The expenses also need to be apportioned according to the amount of days the extra rooms are genuinely available for rent.
- CGT is applicable on the small portion of time that the whole home was not your principle place of residence.
The laws are alike for other online rental platforms, such as Stayz.
To ensure you are receiving a great tax return, without making illegal deductions, you should turn to a property tax specialist for assistance.
