Providing short-stay accommodation

Many people are renting out spare rooms using Airbnb or similar platforms. There are some questions you need to consider if you do this. What expenses can I claim? Do I need to be registered for GST? The IRD has recently addressed some of the questions that arise.

They allow that, in some cases, it is possible to claim a standard deduction for expenses of $50 per night (if you own your own home) or $45 per night (if you are renting). (These rates are for the year ended 31 March 2020.) So, for example, if you own your own home, and receive $80 for a night's accommodation, under the standard deduction method you will only need to declare $30 as income for tax purposes.

There are certain cases where the standard deduction amount can't be used (for example if you rent out the room for more than 100 nights per year, or your short-stay accommodation is a taxable activity for GST purposes). If you don't use the standard deduction, you will need to use actual costs and work out the correct proportion to claim. So please contact us so we can consider your particular situation.

As regards GST registration, if your income is more than $60,000 in a 12-month period you must register, otherwise registration is voluntary. We can help you to look at the various considerations regarding GST registration.