Hi all
Airbnb q
If im renting out part of my home say 35% and would it be judged as a PPOR or investment in Vic for land tax purposes?
If it is only rented out say 30% (not a popular area)- would it be then liable for the vacant tax ?
Cheers
Airbnb Land Tax Implications Question
funnysht1 on 24/02/2024 - 08:35
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If it’s part of your ppor then I would say not subject to land tax but you will get hit with income tax (if you declare it)
Land tax is collected by Vic gov. It would only apply if you rented out a room for more than 180 days in total in a year. However there is a new Vic Gov 'short term rental surcharge' (a tax) of 7.5% coming soon, which will be collected by Airbnb and passed on to Vic Gov, so they will be aware that you are hosting, and rest assured should any tax be payable they will quickly reach out to you.
You will not be liable for vacant land tax, as it is still your PPoR.
Airbnb income is potentially subject to income tax, so you should declare this to the ATO, you will also be able to claim any expenses. however, should you sell your property you will potentially be liable to pay some capital gains tax proportionally.
Best to call the State Revenue Office Victoria for assistance regarding land tax, and the ATO regarding CGT.
Just an aside, if it's not a popular area you're probably being optimistic with it being rented out 30% of the time. But you still need to wear 100% of CGT. If you have a $1m house that goes up 5% a year for example ($50k increase), 35% of it on Airbnb and 50% capital gain deduction:
$50,0000.35.5 = $8,750 taxable capital gain you pay tax on at some point down the track.
Granted, you can claim a lot of expenses and mortgage interest on your Airbnb too, so it might be worth it for you, but it's something to keep in mind. If you only earn $10k a year Airbnb income with minimal costs to claim, it might not even be worth the hassle.
Could potentially fit within the 6 year rule, which will help
6 year rule doesn’t include this, it’s an all or nothing ppor exemption rule
yes, it stays as his 'all' PPOR
Yes as it's Airbnb.