Airbnb is calling on the government to change “archaic” capital gains tax laws which expose hosts to possible extra charges when they sell their homes.
Airbnb’s national head of public policy, Brent Thomas, has written to federal treasurer Scott Morrison complaining the capital gains tax (CGT) laws are “creating a perverse disincentive which acts as a barrier to micro-entrepreneurship”.
And he has asked the Australian treasurer to change the “lack of fairness” around taxing short-let hosts when they sell their homes.
“How is it fair for someone to rent their home out for up to six years and not incur any CGT, but sharing a room for a night could incur CGT?” the letter says.
“An empty nester who shares just one spare room to make retirement easier would lose their entitlement to a full CGT exemption, and be forced to pay CGT.”[pro_ad_display_adzone id=”27469″ align=”left” padding=”10″]Some Airbnb hosts have expressed concerns that they will now face significant CGT liabilities if they sell their homes, while tax experts warn that many others simply have no idea they’re sitting on a CGT time bomb.
Profit on the sale of a primary residence is usually tax-free, but because short-let hosts are earning an income from a portion of the family home, some of the capital gain could be up for grabs by the taxman.
“CGT is one of those things that often gets calculated many years down the track but is affected by events throughout the vendor’s ownership period,” accountant Wei Shiek, founder of online accounting outfit Sansdesk, told the Financial Review in February.
In a report titled Tax and the Sharing Economy, the government’s advisory body, the Board of Taxation, last year recommended that “the government conduct further consultation on options to simplify the tax consequences on disposal of assets used to produce small amounts of income”.
One proposal was to allow property owners to ‘rent’ their primary residence for a designated proportion of time before forfeiting the primary residence CGT exemption.
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