Should Airb&b be classified as a business

Sheepdish1

I’m on the fence about this and am curious as to what peoples opinions are on this as I regularly hear devided opinions on it.

While I do agree that people should be allowed to make profit from rent I do feel airb&b is one factor that is contributing to current housing crises. ( this is only one factor and there are many others that need to be addressed )

I’m baffled that AirB&B houses arent classified as a business and wondering how this is this is the case.

I know that rental tax is paid on the income however if I wanted to become a taxi driver I can’t just hop in my car and start charging customers....I would need license, taxi permit , correct insurance, register as self employed etc.


Similarly if I wanted to open a restaurant for example I imagine there are processes and procedures I need to adhere to eg health and safety. I would get inspections and closed down if not complient.

I’ve often had this discussion with someone close to me and they simply reply “people should be allowed do what they want with a house they’ve bought” but I would disagree with this to an extent.

This got me thinking about people who have bought houses / apartments next to someone who has just decided to rent out on airb&b.

....as a parent I don’t think I’d like to live in a block or road full of AirB&B properties.

I’m sure there are plenty of people who have bought homes and are living next door to constant stag/hen parties etc with a constant flow of strangers coming and going in and out of an apartment complex etc.....I think it would make me a little uneasy when I think about it.

I like knowing my neighbours and the nice sense of community there is....I’ve heard of entire blocks being let out on airb&b surely there is no sense of community there.

Houses in areas that were once rented to families / workers have now turned into permanent b&bs. This is pushing these families further out and having a knock on affect in suburbs so surely this is not helping our current housing crisis.


I recently used airb&b and stayed in a purpose built student accommodation village but think that is different to a property being rented in a residential estate.

I’ve also seen a huge amount of greed with properties being rental both in the rental market and airb&b.

I know that hotels are a rip of but that’s not what I’m interested in. Should short term let’s that are not principle residence
be classified as a business and if so why and why not 😎

Sheepdish1

If this is posted in the wrong area please move

MissShihTzu

If you're renting for profit then yes. It IS a business and the appropriate taxes should be paid. It's nothing to do with greed. Air BnB is a business and should be treated as such.

Conversely, I presume the landlord will still be able to write off any expenses incurred in the upkeep of the property against tax, but stand to be corrected.

Baby01032012

They are classified as a business why do you think they are not?

Even in own home you would have to pay schedule D case II income on the profits. Can’t claim rent a room relief. In apartments it’s against the head lease and needs local planning permission as it would be a change of use. There have been cases brought recently against private houses operating Airbnb. You also need specific insurance.

Curious as what made you think it wasn’t classed as a business.

davo10

Baby01032012 wrote: »

They are classified as a business why do you think they are not?

Even in own home you would have to pay schedule D case II income on the profits. Can’t claim rent a room relief. In apartments it’s against the head lease and needs local planning permission as it would be a change of use. There have been cases brought recently against private houses operating Airbnb. You also need specific insurance.

Curious as what made you think it wasn’t classed as a business.

I totally agree, op, Airbnb income is paid into a bank account, comes with a vat receipt and the income is taxed just like any other business, also the insurance required is different from residential insurance. I'd certainly like to pay the lower, corporation tax rate on income but I doubt that is what you mean op. Op, do you mean that Airbnb properties should be subject to rates like a business?

The_Honeybadger

I think some Airbnb hosts tried to use the ‘rent a room’ scheme to justify not paying tax but Revenue are having none of it and are rightly coming after hosts for taxes owed. Yes it is a business IMO and should be treated the same as any other.

cruizer101

Part of the issue is the difference between the original concept and what it now is. Originally it was meant as a way to occasionally rent a spare room to make a bit of extra money but it has morphed into people buying properties for the sole purpose of Air B&Bing. Properties used in this fashion have changed their purpose and as such should have to apply for planning for change of use.

Edgware

It should be treated as a business. Additional income is being earned and should be taxed as in any other business with the usual allowances for refurbishment etc

DubCount

AirBnB is a business. Its taxed like any other business and should be run like any other business. I think OP is suggesting it should be a more regulated business. Perhaps it should. I dont think it will do anything to help the problems with supply of long term rentals though. There are good reasons for Landlords to be leaving the long term rental market in spite of rising rents and increasing demand. Adding some red tape to the AirBnB market wont stop that. It might put more of those properties on the For Sale market, but anyone who stopped being a long term landlord to go with short term rentals, is highly unlikely ever to return to long term renting.

Sheepdish1

Hi thanks for the replies.

Im referring to properties being bought for the sole purpose of using as airb&b.

Surely these aren’t subject to the same rates and regulations as a B&B for example.

I know there are some decent landlords however I have heard of nearly entire apartment blocks turning into Airbnb short term lets.

In cases such as that why aren’t business rates being collected?

Sheepdish1

DubCount wrote: »

AirBnB is a business. Its taxed like any other business and should be run like any other business. I think OP is suggesting it should be a more regulated business. Perhaps it should. I dont think it will do anything to help the problems with supply of long term rentals though. There are good reasons for Landlords to be leaving the long term rental market in spite of rising rents and increasing demand. Adding some red tape to the AirBnB market wont stop that. It might put more of those properties on the For Sale market, but anyone who stopped being a long term landlord to go with short term rentals, is highly unlikely ever to return to long term renting.

Yes I agree with the above but Imo it’s not treated like any other business that operates on such a large scale. For example, I personally know of people with 2-3 priorities in residential areas on Airbnb. Should these not have to pay commercial rates the same as an actual b&b would?

Similarly someone buying a house in a residential area and turning it into a b&b surely should have to apply for planning to do so.

I think this is the issue that is causing it to be regulated in other cities such as Berlin. Properties that have traditionally been long term rental properties have turned into b&bs. This has a massive knock on affect in both houses available for sale and renting imo and there is clearly a housing crises.

davo10

I'm not sure b&bs require planning nor are they always commercially rateable. It depends on whether owner lives there and if they are subject to LPT. But someone else will be able to give a more accurate update on this.

You are probably right, and it will be no great surprise to anyone when restrictions are applied to Airbnb lets, be it planning restrictions or amount of nights per year which it can be advertised. But, even if restrictions are brought in, it will be nigh on impossible to inforce, the councils nor the courts have the manpower nor the will to regulate the sector.

Though Airbnb is playing a part in the reduction in available properties for rent, it is a soft and easy target. The lack of housing and idiotic tenancy legislation is having a far bigger impact than Airbnb ever will.

davindub

davo10 wrote: »

I'm not sure b&bs require planning nor are they always commercially rateable. It depends on whether owner lives there and if they are subject to LPT. But someone else will be able to give a more accurate update on this.

You are probably right, and it will be no great surprise to anyone when restrictions are applied to Airbnb lets, be it planning restrictions or amount of nights per year which it can be advertised. But, even if restrictions are brought in, it will be nigh on impossible to inforce, the councils nor the courts have the manpower nor the will to regulate the sector. The big advantage Airbnb has going for it is that it is not a cash business/transaction to Revenue are far more likely to collect taxes than with other forms of short term rentals.

Though Airbnb is playing a part in the reduction in available properties for rent, it is a soft and easy target. The lack of housing and idiotic tenancy legislation is having a far bigger impact than Airbnb ever will.

B&Bs require planning.

There is an exemption for dwellings ( note a dwelling must be occupied by a resident to remain a dwelling) with less than 4 bedrooms for use as guest accommodation.

Rates are not applicable to b&bs but are to guesthouses registered with failte Ireland as far as i remember but i was never too sure on the finer details of this distinction, there are some large B&Bs but I took it to refer to guesthouses as the type of accommodation you see on gardiner street.

Mrs OBumble

Sheepdish1 wrote: »

Im referring to properties being bought for the sole purpose of using as airb&b.

Surely these aren’t subject to the same rates and regulations as a B&B for example.

Of course they are. But the truth is there are very few regulations.

A bnb is just that, no matter how it gets its guests. AirBnB is the trendy booking engine right now. But there have been others in the past, and will be again in the future.

beauf

Sheepdish1 wrote: »

....

I’m baffled that AirB&B houses arent classified as a business and wondering how this is this is the case.

....

Because the govt doesn't want to solve the housing crisis. It wants to fuel it.

Every time the Govt has done something with the rental market, the crisis has got worse.

It's logical that any move on Abnb will do the same.

davo10

davindub wrote: »

B&Bs require planning.

There is an exemption for dwellings ( note a dwelling must be occupied by a resident to remain a dwelling) with less than 4 bedrooms for use as guest accommodation.

Rates are not applicable to b&bs but are to guesthouses registered with failte Ireland as far as i remember but i was never too sure on the finer details of this distinction, there are some large B&Bs but I took it to refer to guesthouses as the type of accommodation you see on gardiner street.

This seems to be what you are rightly referring to.

http://www.taxfind.ie/binaryDocument//pdfs/http___www_revenue_ie_en_about_foi_s16_local_property_tax_part_02_02_02_pdf.pdf

Ger Roe

What about other related aspects of providing accommodation as a business such as public liability insurance and safety requirements - fire escape routes and identification, fire alarm requirements, service and maintenance of fossil fuel burning heating systems.

Do air B&B have anything to say about minimum safety standards for the accommodation that they list or is it 'buyer beware' decide for yourself what you want to pay for?

davo10

Ger Roe wrote: »

What about other related aspects of providing accommodation as a business such as public liability insurance and safety requirements - fire escape routes and identification, fire alarm requirements, service and maintenance of fossil fuel burning heating systems.

Do air B&B have anything to say about minimum safety standards for the accommodation that they list or is it 'buyer beware' decide for yourself what you want to pay for?

The insurance provided by Airbnb is not enough to cover Irish property owners, but Kidd insurance, Burke insurance and insureyourhouse.ie do provide the top up insurance needed.

DubCount

beauf wrote: »

Because the govt doesn't want to solve the housing crisis. It wants to fuel it.

Every time the Govt has done something with the rental market, the crisis has got worse.

It's logical that any move on Abnb will do the same.

I don't think that's fair. I think the Government wants to solve the housing crisis. Their problem is that the steps needed to fix the problem are either unpopular, expensive or both.

Direct provision of more social housing - too expensive

Quick eviction of non-paying tenants - too unpopular ("looking after rich landlords and bashing the poor tenants")

Tax breaks to encourage more landlords to do long term letting - expensive and unpopular.

Any move on AirBnB will not change the fact that the risk v reward calculation for long term letting just doesn't add up.

Sleeper12

Airbnb is treaded as a business. Airbnb give all the the details to the revenue

davo10

DubCount wrote: »

I don't think that's fair. I think the Government wants to solve the housing crisis. Their problem is that the steps needed to fix the problem are either unpopular, expensive or both.

Direct provision of more social housing - too expensive

Quick eviction of non-paying tenants - too unpopular ("looking after rich landlords and bashing the poor tenants")

Tax breaks to encourage more landlords to do long term letting - expensive and unpopular.

Any move on AirBnB will not change the fact that the risk v reward calculation for long term letting just doesn't add up.

Pretty much it in a nutshell.

All you have to do is ask yourself, if you had cash in the bank, what would entice you to buy a property which is overpriced at the moment, and rent it long term to a tenant?

And if you have a property to rent, why rent it long term when you can earn more and have less risk by renting it short term?

Sheepdish1

Ger Roe wrote: »

What about other related aspects of providing accommodation as a business such as public liability insurance and safety requirements - fire escape routes and identification, fire alarm requirements, service and maintenance of fossil fuel burning heating systems.

Do air B&B have anything to say about minimum safety standards for the accommodation that they list or is it 'buyer beware' decide for yourself what you want to pay for?

That is also a good point I am also surprised that regulations haven't been enforced in relation to health and safety. They are good points such as fire escape routes, carbon monoxide alarms and proper maintenance of fossil fuel burning.

What is the difference between me letting my house out on AirB&B or turning my car into a taxi?

beauf

DubCount wrote: »

I don't think that's fair. I think the Government wants to solve the housing crisis. Their problem is that the steps needed to fix the problem are either unpopular, expensive or both.....

How is it not fair. They outsourced it to the private sector then massively increased the risk of losing huge sums of money. Then wonder why no one's interested.

Take the idea of rent paid in arrears. The LL loans the rent to the govt and the tenant for the first month. When the norm is pay in advance.

beauf

Sheepdish1 wrote: »

That is also a good point I am also surprised that regulations haven't been enforced in relation to health and safety. They are good points such as fire escape routes, carbon monoxide alarms and proper maintenance of fossil fuel burning.

What is the difference between me letting my house out on AirB&B or turning my car into a taxi?

Why surprised. We've had massive scandals about regulations not being followed in buildings all over.

davo10

Sheepdish1 wrote: »

That is also a good point I am also surprised that regulations haven't been enforced in relation to health and safety. They are good points such as fire escape routes, carbon monoxide alarms and proper maintenance of fossil fuel burning.

What is the difference between me letting my house out on AirB&B or turning my car into a taxi?

I'm not sure what you are getting at with this. Planning/building/Rental regulations mean properties have to meet a minimum standard. Your car must meet minimum NCT standards to be roadworthy. Insurance for both means certain criteria must be met. H&S requirements for a residential/rental property do not require the same standards as workplaces for employees. Risk assessment and associated premiums mean insurers take into account the difference between personal use and public liability for rental accommodation.

Sheepdish1

Airbnb is similar to a small scale B&B which if there are less than 4 rooms does not require planning etc you can just set it up and off you go (as was already mentioned).

Sheepdish1 wrote: »

Ger Roe wrote: »

What about other related aspects of providing accommodation as a business such as public liability insurance and safety requirements - fire escape routes and identification, fire alarm requirements, service and maintenance of fossil fuel burning heating systems.

Do air B&B have anything to say about minimum safety standards for the accommodation that they list or is it 'buyer beware' decide for yourself what you want to pay for?

That is also a good point I am also surprised that regulations haven't been enforced in relation to health and safety. They are good points such as fire escape routes, carbon monoxide alarms and proper maintenance of fossil fuel burning.

What is the difference between me letting my house out on AirB&B or turning my car into a taxi?

Ever hear of Uber?

davindub

Noelle Wrong Babe wrote: »

Airbnb is similar to a small scale B&B which if there are less than 4 rooms does not require planning etc you can just set it up and off you go (as was already mentioned).

Sheepdish1 wrote: »

Ger Roe wrote: »

What about other related aspects of providing accommodation as a business such as public liability insurance and safety requirements - fire escape routes and identification, fire alarm requirements, service and maintenance of fossil fuel burning heating systems.

Do air B&B have anything to say about minimum safety standards for the accommodation that they list or is it 'buyer beware' decide for yourself what you want to pay for?

That is also a good point I am also surprised that regulations haven't been enforced in relation to health and safety. They are good points such as fire escape routes, carbon monoxide alarms and proper maintenance of fossil fuel burning.

What is the difference between me letting my house out on AirB&B or turning my car into a taxi?

Ever hear of Uber?

Important to remember if there is no one living there it is in breach of planning.

There is no exemption in regards h&s legislation, you need to provide emergency exits and routes etc.

beauf

davindub wrote: »

Important to remember if there is no one living there it is in breach of planning....

What?

Sleeper12

beauf wrote:

What?

B&Bs have to have owner or staff living on the premises I think.

Airbnb does not have to have staff or owners living there

Idbatterim

Ultimately I’d expect it to take bed spaces out of circulation if they ban it. I also am totally against them banning it. The council, councillors are primarily taking the piss and are at fault. Why should they dictate to you, what you do with YOUR property?!

beauf

Considering they councils outsouced social housing to the private sector in the first place.

Sleeper12

Idbatterim wrote:

Ultimately I’d expect it to take bed spaces out of circulation if they ban it. I also am totally against them banning it. The council, councillors are primarily taking the piss and are at fault. Why should they dictate to you, what you do with YOUR property?!

You don't have planning permission to run a business from your property. They have every right to dictate.

Airbnb is classified as a business. Business needs planning permission

Bluefoam

I don't have a problem with Airbnb being regulated. If a landlord is letting a house on a regular short term basis, then it's a hotel and should be regulated as such. Whether the current standards are altered to accommodate or not... However, individuals renting out a spare room or even a full let occasionally via Airbnb should be allowed to do so once it's their primary residence.

Mrs OBumble

Sleeper12 wrote: »

B&Bs have to have owner or staff living on the premises I think.

No they don't have to - although many choose to.

In many modern BnB, once reception is closed you won't see a soul. Bookings are done thru engines like bookings.com etc. AirBnB is just a better known booking engine.

Fire safety etc is to do with the number of beds in the building, not the lenght of time that the bodies in the beds stay for.

Edgware

In many cases objections to Airbnb is just envy that someone else is making money.
How many complaints have there been of Airbnb guests causing nuisance in apartment blocks?. Fairly minimal and would be interesting to compare with the normal residents, be they owners or tenants.
Just typical Irish begrudgery.

Sleeper12

Edgware wrote:

In many cases objections to Airbnb is just envy that someone else is making money. How many complaints have there been of Airbnb guests causing nuisance in apartment blocks?. Fairly minimal and would be interesting to compare with the normal residents, be they owners or tenants. Just typical Irish begrudgery.

They are a security risk to other apartment owners /occupiers. Renting let's one or two different people have building keys and codes. Airbnb can increase that number to over 1000 people. Anyone of these can get keys cut. It has insurance implications. Running a business in a building intended for private use without planning can give insurance companies a get out of jail card. It's not unlike having private car insurance but using it for business.

davindub

beauf wrote: »

davindub wrote: »

Important to remember if there is no one living there it is in breach of planning....

What?

If a house has planning permission as a dwelling it must continue to be used as a dwelling.

The exemption for B&B activities under 4 rooms can then be applied..but it must remain a dwelling also.

Sleeper12

Sleeper12 wrote: »

Idbatterim wrote:

Ultimately I’d expect it to take bed spaces out of circulation if they ban it. I also am totally against them banning it. The council, councillors are primarily taking the piss and are at fault. Why should they dictate to you, what you do with YOUR property?!

You don't have planning permission to run a business from your property. They have every right to dictate.

Airbnb is classified as a business. Business needs planning permission

In theory in needs planning but in practice how many of the fairly large number of Airbnb’s in Ireland have planning? Somewhere close to zero I would guess.

Sleeper12

Brooks Late Pepperoni wrote:

In theory in needs planning but in practice how many of the fairly large number of Airbnb’s in Ireland have planning? Somewhere close to zero I would guess.

That doesn't mean that they aren't breaking planning regulations though. Many cyclists break red lights, that doesn't mean that it's legal though.

Airbnb is classed as a business. You need to have planning permission to run a business from a private dwelling.

It's treated as a business under tax law too. You can't avail of the rent a room scheme if you are using Airbnb. In fact Airbnb notify revenue of people renting out their rooms and properties through Airbnb. It also notifies revenue of the amount that earn through Airbnb

italodisco

Odd how everyone likes to blame the likes of Airbnb for the housing crisis but won't highlight the obvious, the endless stream of Brazilians flooding the main cities, renting the majority of 1 beds and putting 5 friends in with them.
That's more so the problem, sorry but it's true

Sleeper12

italodisco wrote:

Odd how everyone likes to blame the likes of Airbnb for the housing crisis but won't highlight the obvious, the endless stream of Brazilians flooding the main cities, renting the majority of 1 beds and putting 5 friends in with them. That's more so the problem, sorry but it's true

That makes no sense at all?

Simple maths tells me that, assuming what you say is true, five people in a one room flat actually helps keep the homeless numbers down and not up.

It's the slumlords that allow overcrowding are to blame & not the tenants they are exploiting. These slumlords charge rent for the five people

AndrewJRenko

davo10 wrote: »

The insurance provided by Airbnb is not enough to cover Irish property owners, but Kidd insurance, Burke insurance and insureyourhouse.ie do provide the top up insurance needed.

Is top-up insurance enough? Do you need to tell your main insurer that you're in the short term let business?

beauf wrote: »

Take the idea of rent paid in arrears. The LL loans the rent to the govt and the tenant for the first month. When the norm is pay in advance.

No, the norm for Government paying anyone for anything is in arrears, on receipt of invoice, in line with prompt payments legislation.

Noelle Wrong Babe wrote: »

Ever hear of Uber?

Ever heard why Uber can't operate in Ireland?

Sleeper12

AndrewJRenko wrote:

Is top-up insurance enough? Do you need to tell your main insurer that you're in the short term let business?

100 percent correct here. You need to tell insurance that it is Airbnb. Regular rental insurance isn't enough & they may not pay out a claim if not told all the details

Sheepdish1

Sleeper12 wrote: »

They are a security risk to other apartment owners /occupiers. Renting let's one or two different people have building keys and codes. Airbnb can increase that number to over 1000 people. Anyone of these can get keys cut. It has insurance implications. Running a business in a building intended for private use without planning can give insurance companies a get out of jail card. It's not unlike having private car insurance but using it for business.

Yes that true, I'm sure there are many people that would feel uneasy at the idea of complete strangers having keys to access apartment blocks.

AFAIK Uber can't operate here because you need an actual taxi / hackney permit in exchange for paying passengers but I could be wrong.

davo10

AndrewJRenko wrote: »

Is top-up insurance enough? Do you need to tell your main insurer that you're in the short term let business?

Sorry, yes you do. Many of the main insurers will not continue to insure you, Aviva would not give me a quote when I informed them I was doing Airbnb. Some insurers will only insure Airbnb if you are also living in the property and letting out a room. But I did get insurance from one of the companies I mentioned which had a standard residential property insurance, plus the additional top up for Airbnb. There was only €100 extra above Avivas standard residential insurance, so good value for extra cover and piece of mind.

Sheepdish1

italodisco wrote: »

Odd how everyone likes to blame the likes of Airbnb for the housing crisis but won't highlight the obvious, the endless stream of Brazilians flooding the main cities, renting the majority of 1 beds and putting 5 friends in with them.
That's more so the problem, sorry but it's true

I don't think for one minute that AirB&B is the main cause of the housing crises but of course it one factor of many making it worse as there are so many properties that once were long term rentals have now become hotels..........I'm not referring to principle residence homes where rooms are being let out , I'm referring to entire apartments.

There has been many cities that has implemented strict regulations with heavy fines if breached to stop this sort of short term letting

Selik

Sleeper12 wrote: »

They are a security risk to other apartment owners /occupiers. Renting let's one or two different people have building keys and codes. Airbnb can increase that number to over 1000 people. Anyone of these can get keys cut. It has insurance implications. Running a business in a building intended for private use without planning can give insurance companies a get out of jail card. It's not unlike having private car insurance but using it for business.

This is nonsense. Been doing it for over a year and ZERO complaints or issues - having said that I was apprehensive beforehand. Also, nobody can get any master keys cut for the apartment complex without owner approval so there is very little security risk.

Having said that the apartment complex in question is extremely well run with an excellent management company, possibly the exception the the rule but I don't know to be honest.

Sleeper12

Selik wrote:

This is nonsense. Been doing it for over a year and ZERO complaints or issues - having said that I was apprehensive beforehand. Also, nobody can get any master keys cut for the apartment complex without owner approval so there is very little security risk.

Just because you haven't had a problem in a year doesn't make it nonsense. There is a reason why it is harder to get insurance when doing Airbnb & a reason why the insurance is more expensive when you do manage to get it

davo10

Sleeper12 wrote: »

Just because you haven't had a problem in a year doesn't make it nonsense. There is a reason why it is harder to get insurance when doing Airbnb & a reason why the insurance is more expensive when you do manage to get it

The added Airbnb insurance is just for bodily injury to guests and damage caused by them. There was just over €100 difference between my normal home insurance with aviva and home insurance with added Airbnb with another insurer who provides this. A few minutes on google and an extra €100 is hardly a burden.

Sleeper12

davo10 wrote:

The added Airbnb insurance is just for bodily injury to guests and damage caused by them. There was just over €100 difference between my normal home insurance with aviva and home insurance with added Airbnb with another insurer who provides this. A few minutes on google and an extra €100 is hardly a burden.

Yes but it is 100 more expensive. Its a higher risk. Its also a higher risk for you neighbours though.

Selik

Sleeper12 wrote: »

Just because you haven't had a problem in a year doesn't make it nonsense. There is a reason why it is harder to get insurance when doing Airbnb & a reason why the insurance is more expensive when you do manage to get it

Insurance to cover short lets is less than 150 a year so not that bad really. What a few agents told me is that most of the city centre "hosts" (especially Temple Bar) are actually foreign tenants who in alot of cases rent whole apartments (sometimes more than 1) and then Airbnb them without the owners consent or knowledge in alot cases.