The End of the Holiday Rental Black Market
It is true that holiday rental platforms such as AirBnB, Stayz and the like have transformed the way Australians travel and book holiday accommodation. Additionally, they have also opened up additional revenue streams for the average Australian by renting out their homes or rooms for additional income. In essence, the scheme is magnificent for both sides. The downfall comes when users of the platforms fail to declare the additional income derived from such platforms. Enter the holiday rental black market.
Sounds like quite an extreme term but is one that is to be taken seriously. The holiday rental black market is real. These undeclared revenue streams mean less taxes paid to the government for essential services such as health, education, transport and infrastructure.
For every new accommodation provider offering a room on Stayz or AirBnB, the ATO is watching. If you are currently utilising one of these websites to rent out a spare room over Christmas or renting your entire home whilst you yourself take an overseas trip, don’t be fooled by thinking you can keep it under wraps. Renting out your home is on par with picking up an additional part-time job. It is income. It needs to be declared.
There is No Way Around the Technology
You may be thinking “I’ll just rent my room out a few times and that will be it”. Wrong. Even if you rent your home just the once, you need to declare all revenue. You rent one room for a week. Declare. The ATO has a whole stream of sophisticated technologies that can now cross check every rental. They utilise a rage of third party data along with the information from the booking platforms themselves including:
- Financial institution data
- Property transactions
- Rental bonds
- Sophisticated analytics
Every tax return is meticulously scrutinised for any information related to holiday rental platforms and additional income that may not have been declared. The days of renting your property on the sly are over. So it is important to weigh up the benefits and real nett income when renting out your property on a casual/holiday basis. Is it worth it?
If there is one thing for certain, it is certainly not worth not declaring the income gained. The cost you may be up for will be a lot more substantial than the income you made for a short holiday rental.
Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislative requirements of running a successful Real Estate office through her 23 years industry experience. Don’t trust just anyone with your trust accounting. Book an appointment with an End of Month Angel today.