Audits and fines loom for non-compliant short stay hosts

The ATO has begun its blitz on negligent Airbnb hosts, issuing letters to homeowners which emphasise income earned through short lets must be included in upcoming tax returns.

The Australian Tax Office said the letters will be sent out this week and over the next 12 months in an effort to “identify and educate those individuals to ensure they include the correct amount of rental income from these sources in their returns and pay the appropriate tax”.

“This will ensure there is a level playing field for all people operating accommodation services in the community,” it said in a statement.

Earlier this month an email was sent out by Airbnb warning hosts it would be complying with ATO requests for information about those hosting through the platform.  

“Airbnb is currently under legal notice by the Australian Taxation Office to share information concerning your hosting activity for the period from 1 January to 30 June 2019,” the home share giant told its Australian members.

The latest ATO letters, targeting those suspected of not declaring their short-stay income, will give hosts until November 25th to update any tax returns already lodged.

The warning comes as the October 31 tax deadline looms, with Australians who have yet to file their latest tax return left with a few days to get their paperwork submitted (unless filing through an accountant, which pushes the deadline back as far as May 15 next year).

Those found to be flouting the tax laws could be audited, fined and ordered to pay back what they owe.

The crackdown has been welcomed by accom industry bodies, Tourism Accommodation Australia CEO Michael Johnson saying it will “shine a light on what has notoriously been a grey area of the economy”.

Dean Long, chief executive of the Accommodation Association of Australia, said it will ensure those who “have not been paying tax for the last ten years on this income, are having the spotlight turned on them.”

While the crackdown may prompt a rise in short-stay prices as hosts raise their rates to cover the costs, Airbnb has said it is committed to making it as easy as possible for the ATO to collect what is owed.

Spokesperson Brent Thomas did, though, say earlier this month: “We shouldn’t be making it harder for people to supplement their incomes, combat cost of living and help generate jobs.”

Just last week, Airbnb released a report suggesting Australians are increasingly relying on home share to supplement their incomes as cost-of-living pressures mount and wage growth stagnates.

The company’s internal figures show a growing number of those renting out rooms and homes to short-stay guests are relying on the extra income it provides to make ends meet.

According to H & R Block’s director of tax communications Mark Chapman, the Airbnb letter is designed to “politely” remind people to declare all their income.

“Basically, the ATO believes that a lot of people are renting out properties through online platforms like Airbnb, Stayz and that sort of thing and not declaring the income they’re earning by doing that,” he told

“They’re probably correct to think people are doing that, but a lot of people simply don’t understand the income they are getting is taxable.

“I don’t think people are deliberately doing the wrong thing, they just might not know they have to declare it and pay tax.”

The ATO is reportedly particularly targeted taxpayers who claim the full capital gains tax main residence exemption when part of their home has been rented out through Airbnb. The law prevents a full CGT exemption where part of a main residence has been used to generate income.

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4 years ago

It’s a good start for the ATO to recognise some AirBnB hosts are not paying tax.
So the generous ATO is allowing them to start paying tax from Jan 2019.
This amounts to a tax free concession for the first half of the financial year 2018/19. ( 1 July 2018 – 31 Dec 2018. )
6 months tax free ? Really ??
As a fully compliant motel, we want a 50% tax break for last year too please.
Do we have to join AirBnB to get this 50% tax concession ?
There is a long list of compliance costs paid by legitimate accommodation businesses but still not paid by non-compliant businesses. Non-compliant is a soft term for flaunting and breaking the law., and the Govt is ignoring it, and handing out tax concessions and forgiveness.

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