Airbnb Tax Question about Expenses

funnysht1 on 02/02/2025 - 13:11

Hi All

Question about airbnb property being available for rent vs actually rented out.

Looking to do some airbnb for half the home - e.g 50% of floor plan as I live by myself and it is a 3 bdr house.

The question I wanted to ask is - if I state it is available for rent for the whole year (so advertised as available for the whole 12 months) but say only 6months of it was actually airbnb out i.e only 6months of the year people rented it (the other 6months was empty).

Can I claim expenses (interest on loan etc)- on the whole 12months it was available for rent or only for the 6months it was actually rented out?

*Did some digging around but it seems only this website mentions it:

https://www.kingscoin.com.au/how-to-property-invest/6-of-the…

When the property is vacant, can I still claim expenses?

The answer depends on whether you rent your whole property or part of your property.
Deductions when renting your whole short term rental property
Where you rent out a whole property, expenses are only deductible where an area of the house is either actually rented out, or available for rent.

For example, where a property is available for rent for 180 days a year then only the portion of rental expenses that were incurred over that 180-day period are deductible.

Note, it is not a requirement that the property is actually rented for the (in our example) 180 day period for rental expense deductions to be claimed. The property simply needs to be available for rent. Therefore, even if no guests stayed on the property during the 180 day vacancy period, if the property is advertised on Airbnb as vacant and available for rent, you can still claim deductions for the 180 day period.
Deductions when renting part of a short term rental property

Where you rent out only part of the property (such as a bedroom with access to shared areas in the property where you live), you can only claim expenses for the period the room is actually rented.

So, if you only rented the room for two weeks in a year, you can only claim the proportion of expenses for the rented part of the property which related to that two week period. This is to stop you claiming deductions for periods where the room might be used for private or domestic purposes, even though it was notionally available for rent*

TDLR - Airbnb only half the house- being rented out as available for the whole 12 months but actually rented out 6 months. Can i claim interest losses etc on the whole 12 months or just the 6 months? The above only suggests 6 months- but any thoughts?

Cheers!

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Comments

  • MS Paint on 02/02/2025 - 13:22
    +19

    Engage an accountant. Get the correct advice. Do it once. Do it properly.

      • freefall101 on 02/02/2025 - 16:40
        +8

        What's the worst that can happen, besides a massive tax bill, fines, interest and suddenly paying a tonne of capital gains on your house?

        Just YOLO it.

        Note: Since I'm actually a CA, I should advice that this is not financial advise. Get an accountant, it will save you in the long run.

        • AndyC1 on 02/02/2025 - 18:48

          Worst case jail for tax evasion.

      • DingoBilly on 02/02/2025 - 17:19
        +3

        Eugh, I hate people who airbnb and make the property market crap, and who themselves are fairly ignorant cheapskates themselves.

    • boomramada on 02/02/2025 - 13:43
      +3

      OP is here for Ozb chartered accountancy.

  • Jaduqimon on 02/02/2025 - 13:36
    +3

    yes you can claim 50% of all the expenses incurred. as long as you do not use those rooms dedicated for airbnb for private use.

    but keep in mind when it comes time to sell your property, only 50% of the CGT will be exempt * proportion of time its available for AIRBNB/total time you had the property for. assuming you are using this property as a PPOR.

    • funnysht1 on 02/02/2025 - 13:42
      -4

      Thanks thats what i thought but:

      "Where you rent out only part of the property (such as a bedroom with access to shared areas in the property where you live), you can only claim expenses for the period the room is actually rented.

      So, if you only rented the room for two weeks in a year, you can only claim the proportion of expenses for the rented part of the property which related to that two week period. This is to stop you claiming deductions for periods where the room might be used for private or domestic purposes, even though it was notionally available for rent*"

      So given it isnt my whole place but just half the house i am airbnbing it out then i would thinnk only what is actually rented i.e not available to rent?

  • Jaduqimon on 02/02/2025 - 13:49

    ahh yes in that case then you have to apportion the annual expenses by the days which the rooms are actually rented.

    • funnysht1 on 02/02/2025 - 13:59
      -3

      yeh true so given not a whole place just half the room..the latter prob applies as per the website? otherwise ppl can advtrise high price no one would come and just claim on interest lol

      • Jaduqimon on 02/02/2025 - 14:00

        yep

        • joka on 02/02/2025 - 14:18

          Yep

  • sumyungguy on 02/02/2025 - 15:09
    +3

    Why not go with ATO's advice?(ato.gov.au) You'll also incur CGT when you sell.

    • funnysht1 on 02/02/2025 - 19:24

      thanks-didnt see that ..useful!

  • AustriaBargain on 02/02/2025 - 15:45
    +1

    ATO might care if you deliberately price is to so high as to keep it empty for the times it is empty. If it's empty that often though can't you pay to boost it in search, or price it lower in off seasons? Seems like a half assed endeavour if it's sitting empty half the time instead of earning you money.

  • jv on 02/02/2025 - 16:27
    +3

    Ask your accountant.

    That's what you pay them for.

  • Dollar General on 02/02/2025 - 16:45

    How do you get to 50% being for Airbnb?

    • JimmyF on 02/02/2025 - 16:50

      Guessing because they are thinking about renting out 1 room 50% of the year! :)

  • JimmyF on 02/02/2025 - 16:50
    +3

    The ATO may request to see proof that the property was indeed available for 'renting' during a period that has no income, so will need an active agent agreement showing it was listed for rent or Airbnb details to say the property was active but no bookings.

    You also can't just jack the price to the moon so you don't get any bookings, as the ATO is on to that as well. See https://www.ato.gov.au/individuals-and-families/investments-…

    Can I claim expenses (interest on loan etc)- on the whole 12months it was available for rent or only for the 6months it was actually rented out?

    Talk to your accountant, but once you start claiming these things, it will adjust the CGT discounts you get when you go to sell. So the short term gain, might not be worth the long term gain.

    Basically you want to do a tax dodge, we get it. You can claim whatever you want to at tax time, it is only at auditing time things will be reviewed if they are valid.

  • plmko on 02/02/2025 - 17:07
    +1

    Haha there's a lot of wrong info here.

    But we'll just leave that there for the lols.

  • Muppet Detector on 02/02/2025 - 19:56
    +1

    What would insurance look like in this shared environment?

  • KaTst3R on 03/02/2025 - 09:20

    It is PPOR or an IP? This is obviously not a straight forward situation so proper tax advice is required.

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