AirBNB

Hi Homeowners

Thinking of renting your home (or part of it) on AirBNB or some similar website?

It should be pretty obvious that the income, less relevant deductible expenses over the period of the let, will be taxable and needs to go on your tax return.

However, you also need to be aware that as soon as you earn income from your home, the capital gains tax principle primary residence exemption (PPR) is potentially no longer available in full.

Part of the capital gain will generally be taxable on sale, based on a prorated basis.

So before you celebrate your new earnings from renting out the home whilst you are on vacation, make sure you consider how much capital gains tax this will cost you when you eventually sell the property.

You also need to keep detailed records of all lettings (income & expenses) until you eventually sell the property,

Lindsay

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2 thoughts on “AirBNB

  1. Instead of renting out your house on Airbnb when you go on holiday, what if you arrange a home swap with someone? No cash exchanged, therefore no tax problems, right? There are websites for home exchange.

    1. Great question Michael, however transactions like these (where no cash changes hands) are treated as any other barter type arrangement. You are deemed to receive the rent you would have charged at market value which is then taxable income. Unfortunately the cost of your holiday rental in someone else house, being private in nature would not be deductible.
      Lindsay

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