Airbnb Owners Be Warned as Tax Office Enforces a Massive Crackdown

The Australian Taxation Office (ATO) has put Australian Airbnb hosts on notice, warning the popular platform was now part of a wider tax evasion crackdown.

Airbnb is is an online marketplace for arranging or offering lodging, primarily homestays, or tourism experiences. The company does not own any of the real estate listings, nor does it host events; it acts as a broker, receiving commissions from each booking.

The hugely popular home sharing platform emailed almost 200,000 Australian Airbnb hosts to warn them their details would be shared with the ATO as part of the tax office’s new blitz.

Those who have not claimed income or have made false claims could face harsh fines or even time behind bars. It is also believed the tax crackdown will lead to Airbnb price increases for the platform’s customers, as some property owners may raise their prices to counteract the amount of tax they will be required to pay on their earnings.

The email states

From time-to-time we may be legally required to share certain information with governmental authorities, Airbnb is currently under legal notice by the Australian Taxation Office (ATO) to share information concerning your hosting activity for the period from 1 January to 30 June 2019”

The Australian Tax Office  believes many workers — such as Airbnb hosts, ride sharing app drivers and vehicle share providers — aren’t declaring that portion of their income, which many consider to be a hobby.

The Australian Tax Office  website states.

“We believe that some people using sharing economy platforms are failing to report their income, either on purpose or because they assume their level of activity constitutes a hobby and doesn’t require reporting,”Our focus is to ensure that people renting a room, their home while they’re away or an investment property through web or app based platforms in the sharing economy understand their obligations.”

The ATO is also believed to be particularly concerned about taxpayers claiming the full capital gains tax main residence exemption when part of their main residence has been rented out through Airbnb.

The law prevents a full CGT exemption where part of a main residence has been used to earn income.

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