Are you declaring the income received from renting out a room or your whole house or unit on a short-term basis through Airbnb and other digital platforms?

Just like when you receive rental income from a rental property, when providing residential accommodation on a short-term basis you are required to:

  • Keep records of all income earned and declare it in your income tax return
  • Keep records of expenses you can claim as deductions
  • GST is not payable on residential income

Deductions for rental expenses are limited to the time the room/property is rented (or occupied for payment), and reflect only the portion of the property that is being rented.

If you are only renting part of your home, for example a single room, you can only claim expenses related to renting out that part of the home. This means you can’t claim the total amount of the expenses – you need to apportion the expenses for both private and income-producing use.

Capital Gains Tax (CGT) may also be payable when you sell a house of unit that has received for short-term rental income even if this property was your main residence.  Renting out any part of your property usually means losing part of your CGT main residence exemption.

The ATO is data-matching information provided by the rental platforms against ATO records to identify individuals who rent property on a short term basis but may not be reporting the income.