64 Jolimont Street, East Melbourne VIC 3002

Accounting News

AirBnb – wrong tax outcome?

We are seeing an evolution of income earning opportunities and waiting for regulators to keep up.

 

 

Uber, Bitcoin and AirBnb are examples of new ideas that have generated new ways of creating income and doing business.  Legislation can lag behind.

Whilst legislation and Australian Taxation Office Rulings have addressed ride sharing and cryptocurrency, there are gaps in house sharing treatment.

Where a home is made available through a home sharing site such as Airbnb, it may provide a significant benefit for the home owner to move out and obtain temporary accommodation (e.g. a hotel).  Current legislation would decree that the hotel costs would be private or domestic and therefore not deductible against the home rent received.

Whilst there is no doubt that the only reason for the incurring of the costs is to derive rent, most tax advisers opinion is that the expenditure is private and not deductible.

The rules need to change – maybe a dominant purpose rule.

 

 

AcctWeb



W Marshall & Associates 64 Jolimont Street, East Melbourne VIC 3002

Important: This is not advice. Clients should not act solely on the basis of the material contained in this Commentary. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before taking any action. The Commentary is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.