SIDE. BUT WHAT AIRBNB TAX IMPACTS SHOULD YOU LOOK OUT FOR?

taxes?]opportunity to rent out that spare room without the long termcommitment. Or, it’s a handy way to lease a holiday home that wouldbe quiet for much of the year. Both of these things are great – butsome Airbnb hosts may not realise the effects and benefits come tax
time. time.Australian Airbnb tax information for Australia can be tricky to find,so let’s try to touch on some important bits right here…

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com.au considered whether Airbnb was a sublease or licence. In this case, alandlord, Ms Swan (landlord), owned a two bedroom apartment inMelbourne (apartment) which she leased to the tenants Uecker & Greaves(tenants) in August 2015 for a 12-month lease (lease).The tenants then listed the apartment on Airbnb to third party guestsfor short-term stays. The landlord upon discovery initiatedproceedings because the tenants had sublet the apartment unlawfully tothird parties without the landlord’s consent.At first instance, in the Victorian Civil and Administrative Tribunal(VCAT), it was held that the tenants only granted licences rather thanleases to the Airbnb guests com.au As such, the VCAT ruled that the tenants had not sublet the apartment.However, the Supreme Court overturned the original VCAT decision,deciding that the tenants had let the whole apartment and that it wasa sublease rather than a licence. This sublease was considered abreach of the tenant’s lease which prohibited subleasing.This case considered the narrow issue of subleasing and that thelandlord’s consent was required. It did not consider whether Airbnbitself was illegal. In fact, a test case may be difficult given thediffering laws between Australian states and territories and withinlocal government areas.

THE LOCAL EFFECT



The so called Airbnb “effect” on rental availability and pricingis an issue that’s also starting to burn in Australian cities like
Sydney and Melbourne as councils, strata companies and the property Sydney and Melbourne as councils, strata companies and the propertyindustry – as well as state legislators – try to figure out whatis actually happening on their doorsteps, especially in unitdevelopments.In New South Wales a Parliamentary Inquiry into Adequacy of theregulation of short-term holiday letting in New South Wales .gov.au has already attracted more than 200 written submissions and willcommence public hearings in early March.A real concern among councils and fire authorities is when flats areeffectively converted into unlicensed short stay hotels, the number ofpeople crammed into a unit can be far above permitted occupancylevels, like when as many as 8 people regularly bunk down in atwo-bedroom apartment.Thanks to the online and highly distributed and nature of Airbnbhost’s activities – remember there are no actual addresses handedout until you book or contact a host – the biggest challenge forauthorities and regulators is just getting an accurate picture ofwhat’s going on.But that could be about to change. Big time.The same organisation that detected and exposed the manipulative purgeof more than 1000 of Airbnb’s multiple listers in New York has setits sights on the NSW Inquiry and Australia and could soon flush outthe data councils and policymakers here now find so difficulty toglean.Founded by ex-pat Australian and now New York resident Murray Cox,itself as an “independent, non-commercial set of tools and data thatallows you to explore how Airbnb is really being used in cities aroundthe world.”Obviously Airbnb won’t tell you everything, but Cox maintains thatthere’s enough publicly available rich data out there becauseAirbnb’s listings themselves produce a pretty sophisticated snapshotof what’s happening. 

UNCLEAR LEGISLATION COMPLICATING THE SHARING ECONOMY



“At a state level, we need some kind of statement clarifying thatis a permissible use.” – Mike Orgill, Airbnb’s Asia-Pacificdirector of public policyAccording to Legal Vision, a leading commercial law firm, the legaltreatment of Airbnb varies from state to state depending on where the
property is situated. To complicate matters further, there is also a lack of understanding between different local government areas withinstates.Two recent incidents in Melbourne and Sydney highlight this division:

OTHER REGULATORY ISSUES



There are also numerous other regulatory matters that round out theconfusion. Mostly, they involve a lack of regulation in areas suchas:* Food, health and safety regulations;* Fire or disability access regulations; and* The requirement for public liability insurance.***What do you think about Airbnb’s current ambiguous legal status inAustralia? Let us know your thoughts on LegalVision’s Twitter twitter.com

THE DATA TRANSPARENCY DEBATE



One of the biggest challenges councils and regulators face is buildinga picture from what would otherwise be thousands of pieces offragmented information floating around in a particular point in time.Cox, who lives in Brooklyn New York, says he started Inside Airbnb asa self-funded project when he first started noticing debate about theimpact of the platform.What irked him was that despite all the passionate arguments, therewas a paucity of actual data . So he started digging.“I discovered that there might be data available that might tell thestory about how Airbnb was being used in the city, and potentiallyimpacting residential housing,” Cox told _Government News_.Cox says he doesn’t charge for the data he compiles if it’s beingfed into a public interest or transparency issue or debate. But if thedata is being used for clearly commercial purposes, he uses thatopportunity to fund the project and offset his infrastructure andother tech costs.He argues that part of the problem for policymakers is that withoutaccess to data on Airbnb – and indeed other sharing economyplatforms – the real evidence base for decision making can be opaqueand thin.“Often without the data you are relying on lobbying and sometimesmarketing campaigns,” Cox says.“I saw that there was no real data available in Australia or Sydney,I thought that my tool and my data could provide an impact on thedebate and help forming good policy.”Cox also maintains that communities, policymakers and regulators needto be up for an informed discussion about what effects so-called‘sharing economy’ platforms could have on the mainstream economyincluding where and when undesirable market distortions occur.In the case of the mainstream rental market, it can mean thatproperties – whole houses or units – in areas of high demand onAirbnb can become unregistered holiday accommodation where landlordsand owners cash in on much higher nightly rates than traditionalleases. 

TAX AVOIDANCE



Airbnb arrangements have also come under fire with the AustralianTaxation Office (ATO). This heat was due to the fact the sharingeconomy lets people operate “commercial arrangements”, which canbe used to evade tax, including Capital Gains Tax and GST.Technically income earned from an Airbnb short-term holiday let mustbe declared to the tax office, but many avoid this obligation, whichis easy to do without a firm regulation of the industry.

IS AIRBNB LEGAL IN AUSTRALIA?



Posted September 13, 2016Web-based sharing sites and apps like eBay, Uber and AIRBNB haverevolutionised the way in which we use and sell goods and services.Rather than a straight transaction with a seller and a buyer and nointermediary, these sites do not sell anything at all. Rather, theyintroduce a person wanting to sell with a person wanting to buy. Theparties then conduct the transaction between themselves. Thesedisruptive matchmakers are currently testing the limits ofAustralia’s existing legal and regulatory framework. This articleunpacks the different facets of the way our current laws are fallingshort of interfacing with the new breed of disruptors, using Airbnb com.au as an example.

AIRBNB AND THE AUSTRALIAN TAXATION OFFICE



Hosts on Airbnb must declare their rental income to the ATO and if theannual amount earned is greater than $75,000 per year the host mustregister for GST. There are several excellent sources of informationdedicated to this:* Accounting firm Sansdesk provides an in-depth tax guidespecifically aimed at Airbnb hosts .com.au * The ATO has a specific section dedicated to tax advice businesspart of the sharing economy .gov.au Using these guidelines there are three scenarios where you may beeligible to claim a tax deduction:* Hosts who rent their entire premises on an occasional basis (e.g.when they’re away or on holiday) to make income on the side.* Overseas investors who rent out their entire property locallythrough Airbnb.Those who rent out a spare room through Airbnb in a home they residein. In this instance they may only be eligible if they can provideevidence that they attempted to rent out the room at a commercialrate.Airbnb recently joined forces with global tax services provider H & RBlock in an agreement to ensure that sufficient tax guidance and tipsare provided to hosts on the platform.





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