What are typical tax deductions for AirBNB rentals?

If you live in Australia and you are looking for some extra income from an existing or proposed property, the chances are that you have considered renting your property out on AirBNB.  Clients are often led to believe that the returns are better with Short Term Rental (STR) than traditional long term leases.  While in some cases this might be true, it is important that in ALL cases you have proper tax planning to ensure you are claiming as much as possible from the ATO and giving your property the best chance of being positively geared from a cashflow perspective.

So what are some of the common AirBNB tax deductions and what are some of the overlooked deductions?

Common AirBNB Tax deductions:

1. Interest – the biggest deduction by far!
2. AirBNB host management fees – (should NOT be more than 20% ex-GST)
3. Council rates
4. Insurance
5. Repairs and maintenance
6. Body corporate fees for strata properties
7. Advertising for tenants if not included in the host management fee
8. Airbnb service fees and commission.

Overlooked AirBNB Tax Deductions

1. Capital Works deductions – you will need a quantity surveyors report for this
2. Capital Allowance for assets – also on the quantity surveyors reports (and anything below $300)
3. Cleaning charges and ALL cleaning materials and cleaning utensils
4. Soft furnishings such as pillows, sheets, towels
5. Hard kitchen furnishings such as cutlery, small appliances, utensils, cookware
6. AirBNB Cancellation Fees – (this is where YOU caused the cancellation)
7. Software you use to manage your AirBNB property or bookings
8. Computers and accessories you use to manage your AirBNB property or bookings
9. Photographic equipment you use to take photos in order to rent the property on AirBNB
10. Food, meal and coffee provisions for AirBNB guests (that you pay for)
11. Utilities such as electricity, gas and water used by AirBNB guests (that you pay for)
12. Internet used by your AirBNB guests i.e. monthly internet fees (that you pay for)
13. Phone calls related to managing your AirBNB property.

If you are an AirBNB host or are thinking to rent out a property on AirBNB and want a specialist tax accountant on your team then reach out to Rider Accountants and Advisors AirBNB Property tax experts.  Steven P. Rider the Practice Director at Rider Accountants has over 25 years experience as one of Australia’s pre-eminent property tax experts with special focus on the Sharing Economy and AirBNB. Email: steven@rideraccountants.com.au.