Capital gain Airbnb and renting out a room in house plus a

[TILT]

Seems you lose part of your tax free concession when renting out a room in your own home. And you get taxed on the rent received

Seems like double taxation to me?

Are people who rent out on Airbnb aware of this?

Has anybody been hit by the ATO and lost some of their capital gains for renting out a room in their own home?

 

[geoffw]

However you can claim a deduction for a portion of the mortgage interest, depreciation and running expenses.

 

[Paul@PFI]

Seems you lose part of your tax free concession when renting out a room in your own home. And you get taxed on the rent received

Seems like double taxation to me?

Are people who rent out on Airbnb aware of this?

Has anybody been hit by the ATO and lost some of their capital gains for renting out a room in their own home?

AirBnB includes some who may offer a casual board and lodging. Others who do it a night or weekend here or there. Each taxpayer needs to consider their own position and the consequences which could be different for each.

Taxation of income and taxation of capital gains are not double taxation. A specific CGT rule actually doesn't permit same income to be taxed under both provisions. The loss of a pro-rata of the main residence exemption for income producing property is intended to reflect only the non-PPOR use over time for the rising value if and when sold. Your own home isn't tax free except if you satisfy the exemption. Renting some out means its partially exempt. Your assumption is that its always tax free ?

Meanwhile yes the income is taxed and yes you are entitled to claim a % of outgoings incurred eg interest, depn etc etc...Its possible that this could even be a loss.

So if you had a 2br house and rented it three nights a week for three years then over the three years you might lose 21% of the exemption for 50% of the property and then the general CGT discount would reduce that by half etc..

And if it was a few night a month for a room in a 4br home I wouldn't imagine the CGT impact will add much to Treasury revenues.

You do touch a good point...Expect ATO and IRS etc to share info on sites like AirB, Uber etc at some point usually two - three years or so later and some surprised taxpayers asked to explain why they didn't declare income. The ATO will be able to identify inflows from AirBnB someway I'm sure. eg : Bank codes etc.

 

[TILT]

Thanks again Paul for your detailed answer. Seems we all have to be more careful in the future. This Airbnb situation will hit the fan soon. There are over 30,000 people in Sydkong letting rooms out at the moment.

 

[Paul@PFI]

Thanks again Paul for your detailed answer. Seems we all have to be more careful in the future. This Airbnb situation will hit the fan soon. There are over 30,000 people in Sydkong letting rooms out at the moment.

Offering their rooms. Achieving a let is a different number, much smaller.