Tax with Air bnb

fire_man

I am considering renting out my property on Airbnb for few weeks of the year.

Do I have to pay tax it it goes over a certain figure or how does it work?

relax carry on

There's no certain figure for declaring income for tax purposes. All sources of income are to be declared. Whether you pay tax on that income will depend on your on circumstances; namely your total income from all yours and your rate band/credits allocation. Below is the first link I found when I googled Airbnb and tax.

https://irishfinancial.ie/airbnb-hosting-ireland-a-complete-tax-guide/#:~:text=The%20income%20you%20earn%20from,deductible%20expense%20against%20your%20income.

You may know this already, but just in case, Airbnb shares all income earned by Hosts on their site in Ireland with Revenue.

https://www.taxassist.ie/resources/questions-and-answers/will-revenue-find-out-if-i-m-earning-income-as-a-host-with-airbnb

road_high

I have a large decent spare room in a great tourist town and thought Airbnb would be a fantastic way of earning a few extra euros- I am on the higher rate of tax and well into that scale- I don’t want to rent full time and take in a lodger even though I’m aware of the tax benefit.

Pretty disappointing to discover this, Is it a complete waste of time if I have to pay full tax on any but of extra income I could earn through Airbnb?

L1011

https://www.boards.ie/discussion/comment/121347551#Comment_121347551

Its income - why wouldn't you pay full tax on it?

If you can charge enough it may still be worth your time.

road_high

https://www.boards.ie/discussion/comment/121347571#Comment_121347571

I’m not interested in a debate on Irelands crippling tax regime but paying 50% of earnings on an empty room in tax for nothing in return doesn’t seem fair to me and never will. No problem with tax and accept we all have to pay it but it should be at reasonable rates not legalised extortion

L1011

https://www.boards.ie/discussion/comment/121347634#Comment_121347634

I cannot see any argument that it isn't just income exactly like any other income. Its the same tax rate as if you got a pay rise.

Why would there be any difference?

meep

https://www.boards.ie/discussion/comment/121347634#Comment_121347634

That seems somewhat illogical the way you've phrased it

You have an empty room doing nothing and generating no income.

If you air b&b it, you will receive income on which you pay tax. What's left, however small, is more than you have now.

I take your point that when you pay the tax , you feel it's not worth your time and effort for the megre amount you will end up with. Others in different circumstances might see it differently.

And if you want to rail against obscene taxes, check out inheritance taxes, CGT and EFT deemed disposal.

I'm sure the next govt. will fix all that. ☹️

road_high

Thanks everyone for the replies and I apologise as I came across as angry initially-I know you’re right I’m more venting than anything else here-I thought when I was looking into it the Rent room relief allowance applied and of course- it doesn’t!!

I may have a word with my accountant, maybe I can up the price planned and make sure i claim as much as possible on the return and keep the bookings to a minimum and just view it as a little extra income and not a big opportunity.

I find our tax regime obscene, I’m a hard working honest guy just trying to make an effort to better myself and feel like it really is out for people like me. Everything I do or earn they have their hands rammed into like work performance bonus etc. The only bit of advice I’d give anyone like me is to maximise your pension contributions if at all possible.

I’m sure many of you also feel the exact same about it all too

https://www.boards.ie/discussion/comment/121347906#Comment_121347906

check out the rent-a-room scheme

Earn up to 14k a year tax free

Earn 14,001 though and you pay 40% tax on the lot, so thats the only watchout

Fantastic scheme, I'm doing it myself

L1011

https://www.boards.ie/discussion/comment/121347917#Comment_121347917

They said they don't want to do this (lodger), though

It does not apply to airbnb in any circumstances.

road_high

https://www.boards.ie/discussion/comment/121347917#Comment_121347917

Yes I’m mulling it over thank you! How do you find having a lodger? That’s why I thought Airbnb would be great as I’d be rid of them after a night or two and would be the room only. I defo wouldn’t go over the €14k as only one room.

Would any one be willing to just rent a room/bathroom long term or is that a thing? The thoughts of sharing my living room and kitchen and any potential partners over makes me shudder tbh

L1011

https://www.boards.ie/discussion/comment/121347949#Comment_121347949

Do you want someone cooking on a hotplate/microwave in the bedroom? Not allowing them access to the kitchen will cause that. Or grinding cornflakes in to the bedroom carpet for that matter.

Fairly common to not allow use of the living room

You can also advertise for 5 day rental (some will want Sunday nights, some will want Friday nights, some will want none) for less money but people will still want to use the kitchen.

road_high

https://www.boards.ie/discussion/comment/121348032#Comment_121348032

Must have a look at ads on daft and get a feel for what’s the norm. Good call on the non weekends.

https://www.boards.ie/discussion/comment/121347949#Comment_121347949

I find it great to be honest. I rent out 2 rooms, one single and one double with a couple in it, so there's 5 of us in the house in total, wife included.

They all stay in their rooms most of the time except for cooking meals. I've never asked them to do this though.

The thing with this route is you can set whatever boundaries/rules/requirements you want. RTB rules don't apply as the law is 100% on your side as this is your personal home, so if you needed to get rid of someone in a hurry, you can do so. I read up a lot on it before going down this route and a lot of pain and hassle can be mitigated by the initial signing of a contract. Lay out the terms clearly and stick to them. This can include noise, guests, cleaning etc etc. I would advise against putting ridiculous stuff in though as you'll not get any takers if you go that route. Stick with logical stuff and keep it fair e.g. they have a bathroom, the ask would be to ensure its properly cleaned once a week, which is logical and fair, but asking them to do it after every use is neither. You get the idea

I've only had to have 2 or 3 chats about little things and they were all down to my lodgers not being Irish so didn't understand some things e.g. the immersion, ventilation to prevent mold and so on

As for getting someone, use Daft, word of mouth, whatever.

As for duration of stay, thats entirely up to the lodger and you. Mine are all approaching 18 months at this point and I'll be delighted if they stay as long again.

Note, for the 14k, I only charge the room rent to keep it simple for myself. If you charge for power, heat, internet etc, all that goes towards the 14k so, like in the case of gas and electricity, if they go up, you could be asking for more which could put you over the 14k and knacker things for you from a tax perspective. I promoted the rooms on this basis i.e. 1 bill, all-in, no hidden surprises. Keeps it simple all round. With 1 room this would not be as much of a risk for yourself but something to consider nonetheless

road_high

https://www.boards.ie/discussion/comment/121347726#Comment_121347726

This is true but if 40-50% of what you earn/charge is going on tax then it quickly doesn’t make sense- your time, effort, cleaning, laundry all those things to make a pittance

L1011

https://www.boards.ie/discussion/comment/121348890#Comment_121348890

You can apply that to absolutely every piece of work you do, though. Its income, its taxed.

What argument is there to tax this income different to other income?

Rent-a-room is tax free due to there being a societal need for rental accommodation. There isn't for unregulated B&Bs.

road_high

I’ll have to have a think about it and talk to my accountant see what has to say and weigh up the pros and cons.

The few bookings I did I have to say I enjoyed the whole thing and they went well with good reviews

shmeee

https://www.boards.ie/discussion/comment/120910562#Comment_120910562

Airbnb will request this information after a number of bookings / earnings so if you only have a handful of bookings a year, Airbnb may not request your PPSN number for tax reasons, FYI. Ps. If the info is requested, assign it to a PPSN of maybe a partner or other family member who may have spare tax band under the 40% rate and the income will be only taxed @ 20% if declared.

https://www.boards.ie/discussion/comment/121353351#Comment_121353351

Thats pretty much all BS.

Here is a statement on the Airbnb which declares that it is legally required to report ALL INCOME earned through the site to Revenue.

https://www.airbnb.ie/help/article/1378#:~:text=Airbnb%20is%20legally%20required%20under,both%20Irish%20and%20foreign%20listings

The last sentence amounts to tax evasion, and possibly could lead to prosecution not just for tax evasion, but also from the local CoCo for operating a short let without planning. The relative would be a fool to accept such a risk, the person profiting from it would be a fool to ask.

Incidentally, there seems to be strong indications that the EU are going to harmonise Directives on Airbnb, and that it will be light touch regulation. This will scupper attempts by some countries to limit the effects of short let’s on accommodation shortages.

https://www.reuters.com/markets/europe/eu-countries-lawmakers-set-agree-light-touch-rules-airbnb-sources-say-2023-11-10/

shmeee

https://www.boards.ie/discussion/comment/121353531#Comment_121353531

So your 100% sure Airbnb have everyone's PPSN that has earned money on the site? Well your wrong, is all I can say.

And what's to say this partner or family member is not earning the funds? Who's to say who is actually taking the earnings. The family member could be the person organising the bookings and cleaning the house, who's to say or know otherwise.

https://www.boards.ie/discussion/comment/121353620#Comment_121353620

Did you read the link? Airbnb are legally required to pass all income earned through their site to Revenue, and since 2019 your PPSN.

If you don’t believe Airbnb, perhaps read this article.

https://www.irishtimes.com/business/personal-finance/nowhere-to-hide-for-airbnb-hosts-as-revenue-tightens-the-tax-net-1.4493074

If they are earning the funds, why would there be an issue? You seem to be saying that you are the beneficiary, but you are claiming someone else is to evade paying the higher rate of tax, what could possibly go wrong with that?

shmeee

https://www.boards.ie/discussion/comment/121353712#Comment_121353712

Legally required and actually doing it or a different thing is the point I'm raising. Eveyone is legally required to have a TV licence.... You can earn funds on Airbnb and have no PPSN entered onto your profile.

You can set up a listing in the morning, let a house for a night, receive funds into your account in the following 48 hours but yet no PPSN is required to be updated. That's the point I'm making.

road_high

Always best stay on the right side of things with Revenue.

Considering the rent a room scheme. Seems a lot more viable financially.

zell12

https://www.boards.ie/discussion/comment/121354441#Comment_121354441

Eh, the €800pm rent a room to a Ukrainian is a better tax-free option https://www.citizensinformation.ie/en/moving-country/ukrainian-refugees-in-ireland/accommodation-recognition-payment/#2a3ac5

road_high

https://www.boards.ie/discussion/comment/121354492#Comment_121354492

Thanks. Someone else was telling me about this one too- while financially attractive, not for me I’m afraid. Working professionals that vacate the house to go to work daily only!