Tax Deductions for Airbnb Hosts

As an Airbnb host in Australia, there are several tax deductions you may be eligible for. It’s important to note that tax laws can be complex, and the following information is meant as a general guide. For specific advice tailored to your circumstances, it’s recommended to consult with a qualified tax professional.

Before claiming a tax deduction, you need to meet the following conditions imposed by the ATO:

  • you must have spent the money
  • you weren’t reimbursed
  • the expense must directly relate to earning your income
  • you must have a record to prove that you incurred the expense

If your expense is a mixture of personal and work, you may only claim the work-related portion of it. More importantly, you may not claim an expense if you do not have a record of it.

Here are some common tax deductions that Airbnb hosts in Australia may be eligible for:

  • Deductions for expenses related to hosting: You can claim deductions for expenses directly related to renting out your property on Airbnb. This includes fees paid to Airbnb, cleaning costs, advertising expenses, and property management fees.
  • Interest on loans: If you have a mortgage or loan on your rental property, you may be able to claim a deduction for the interest charged on that loan. However, if you also use the property for personal purposes, the deduction may need to be apportioned.
  • Utilities and other running expenses: You can claim deductions for the costs of utilities (such as electricity, gas, and water) and other running expenses (such as internet and phone) that are incurred as part of your hosting activities. Again, if the property is used for personal purposes, the deduction may need to be apportioned.
  • Depreciation: You may be able to claim deductions for the decline in value (depreciation) of certain assets used in your Airbnb rental, such as furniture, appliances, and fixtures. This is generally claimed over a period of time and may require a depreciation schedule from a qualified quantity surveyor.
  • Insurance premiums: The premiums you pay for insurance coverage related to your rental property, such as landlord insurance, can be claimed as a deduction.
  • Repairs and maintenance: Expenses incurred for repairs and maintenance of your rental property can be claimed as deductions. However, it’s important to distinguish between repairs (deductible) and improvements (capital expenditure).

Remember to keep accurate records of all your income and expenses related to your Airbnb hosting activities. This includes invoices, receipts, and bank statements.

It’s important to note that if you also live in the property you are renting out on Airbnb, there may be certain restrictions and limitations on the deductions you can claim. Consulting with a tax professional or reviewing the ATO guidelines will help you understand the specific rules that apply to your situation.

It’s important to note that to claim these deductions, you must keep accurate records of your expenses, including receipts and invoices. Additionally, you should seek advice from a qualified tax professional to ensure that you are claiming the correct deductions and meeting all the necessary requirements.

This article is general information only and does not provide advice to address your personal circumstances. To make an informed decision you should contact an appropriately qualified professional.