Did you know that since launching in Australia In 2012, Airbnb has facilitated over 1.3 million short-term stays across multiple cities?
With great popularity comes great responsibility.
Whether you are a seasoned or new Airbnb homeowner the same rules will apply. That’s why we suggest getting familiar with the ins and outs of Airbnb’s rules and regulations that apply in your city.
If you rent out a part or all of your home, the money you receive is considered income, which has to be declared on your income tax return. Some expenses are deductible, such as service fees, cleaning expenses, repairs and maintenance, food, photography for the listing and extra insurance premiums.
Capital Gains Tax (CGT)
Capital gains tax (CGT ) is payable when you sell a rental property. This is the tax on the profit when you sell an asset that has increased in value. While capital gains tax is generally not payable on the family home, if you are renting out your home or even a small part of it, on Airbnb, you may be required to pay additional funds to the ATO when the time comes to sell.There are certain expenses you can claim for the percentage of the area of your house that you decide to rent out. These tax advantages include:
- Internet and phone bills
- Water, power and council rates
- Repairs and maintenance
- Interest on your mortgage
- Depreciation on the cost of furnishings
Town Planning Law
Most properties on the short-term rental market are in residentially zoned areas.
Renting by room: Renting out 2 or 3 rooms to guests in a home does not generally need planning approval.
Renting multiple rooms: If multiple rooms are rented, and if breakfast or cooking facilities are provided, then planning approval and a licence as Bed and Breakfast Accommodation or as Backpackers’ Accommodation is required. Renting out a self-contained flat in a home, the same rules apply. Business insurance will also be needed.
Renting an entire house: If you rent out the entire house or apartment for short-term stays, this may mean the use may no longer qualify as a ‘home use’. If the zoning allows ‘serviced apartments’, ‘holiday lettings’ or ‘tourist accommodation’ then short-term stays may be allowed with planning approval.
We suggest you check the above with your local planning authority before signing up to be an Airbnb host.
Residential Tenancy Law in Australia does not allow tenants to sub-lease the property without the owner’s / landlord’s consent. If requested to approve an Airbnb use, an owner could reasonably refuse to consent because of the extra wear and tear on the property.
When it comes to insurance, renting a room in a home is the same as having a home office — both are business uses which are not covered by a standard Homeowner Insurance policy. Landlords policies will differ, as coverage is provided for guest injuries in investment properties. Malicious property damage by guests is not covered by insurance policies. Airbnb fills these gaps by providing “Host Protection Insurance” to cover injuries and a "Host Guarantee" to cover property damage by guests.
As a platform and marketplace, Airbnb provides some useful considerations that may help you better understand laws and regulations in your own city.
Your regulation checklist:
When it comes to equipping yourself with the right tools and knowledge to set yourself up for Airbnb success, we recommend walking through the checklist below to cover the basics. Airbnb also provides all hosts with comprehensive information to guide you according to your city’s regulations.
Business Licenses: Many cities require owners of certain businesses to have a license before the business can be operated.
Building and Housing Standards: Most local governments have rules and regulations that specify minimum construction, design, and maintenance standards for buildings, including regulations on habitability, health, and safety.
Zoning Laws: Most cities have laws that set out the way you can use your home. These rules are often found in a zoning code, planning code, or city ordinances.
Special Permit: Some cities may require a special permit to rent out your home. Contact your local government to see if you need one, and, if you do, how to get it.
Taxes: Many cities require hosts to collect a tax for each overnight stay, and pay that tax to the city.
Landlord-Tenant Laws: When hosting longer stays, you may be subject to landlord-tenant laws.
For more support related to property management for Airbnb, get in touch – we love to chat!