Airbnb discloses s264 Notice

Discussion in 'Accounting & Tax' started by [email protected], 11th Oct, 2019.

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  1. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    NoCookies | The Australian

    Todays media indicates Airbnb have advised its property managers that the ATO have issued them with a s264 Notice.

    A s264 notice is a order the Commissioner of Taxation can issue to anyone to disclose specific information. The information disclosure by Airbnb indicates it relates to :

    Airbnb is under legal notice by the Australian Taxation Office to share information concerning your hosting activity for the period from 1 January to 30 June, 2019,” the email said.

    The scope of the crackdown will include online banking, payment, booking date, gross income, name, address and telephone information between the financial years 2016-17 and 2019-20.
    1. Airbnb wont be the sole recipient of such a notice. All online booking platforms will receive this. If the operate within Australia the notice can be issued. The platform can be offshore (eg Booking.com = Netherlands) but if the recipient fails to disclose penalties and court orders can follow. Hindering the Commissioner can be a corporation or personal penalty.
    2. The platform doesnt have to tell anyone it is subject to a notice. It is not a secret order but the platform may decide not to communicate its actions.
    3. The ATO will data match the data with returns lodged. The primary focus will be taxpayers who receive income and report no property income for the respective address. This may impact tax, land tax, land tax surcharges and CGT.
    4. The Airbnb communication may be slightly misleading. It infers a reporting for the 6 months ended 30 June 2019. In reality it is a three year tax period. Taxpayers should always assume a notice is always in effect whether or not one is issued.
    5. Now the ATO has this data you can expect OSR NSW and other states to use the address information to identify land tax exposed property.
     
    qak likes this.
  2. virgo

    virgo Well-Known Member

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    Oops!
     
  3. Michael Mitchell

    Michael Mitchell Well-Known Member

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    They're coming for ya cash moniez! :p
     
  4. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The ATO have indicated many people falsely consider spare income received for renting their own home in part home is a hobby. Its definitely income. Allowing your family to stay over Xmas and them chipping in for some food wouldnt be income. The very act of using a platform indicates an income earning effort as I have yet to see a listing that says "free to good nice applicants""

    However for many people in receipt of rental income may mean they are ignoring the legal deductions available. Or disregarding the potential impact on CGT.

    One reported statement in media :
    The crackdown could see also result in an increase in prices for those looking to stay in Airbnb properties
    I dont agree. If there are ten apartments listed for $300 a night and one who wants to pass on tax as a cost and rents it for $400 then good luck with vacancies. Its like car sales. You cant charge 10% more for a car if you are a car dealer. The market price for a 4 year old Mazda 3 is what it is.
     
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  5. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Common questions posted when people do have Airbnb type income

    1. I dont own but have sublet one of the rooms I rent from the owner. Do I need to declare this ?
    Yes. It is income. But you may have a portion of your rental costs as a offsetting deduction. It may create a profit or a loss. However renting it for a few nights and seeking to claim 50% of costs may well be a stretch.

    2. My wife and I own the home but she handles all the Airbnb stuff. Who claims the rental profit / loss ? The owners do so in the same % as their legal title.

    3. Is my Airbnb income rental income or a business ?? Good question. If you own it or part own it the legal title is used and the income is rental income. However if you rent the premises under a lease and sublet room using Airbnb it may constitute a business activity IF THERE IS A VALID LEASE. But f you are merely helping mum manage her vacant property its likely her tax issue not yours despite you having a Airbnb account in your name Seek tax advice.

    4. Do I need to worry about GST ? Probably not. If the premises are residential premises. If you have any concerns about this seek personal tax advice.

    5. Will I lose my CGT exemption ? Well that depends. If its a part of the home the loss will be partial. You cant claim to be absent and still live there. But if you are absent and fulfill all the requirements the absence rule (up to 6years) may apply. Seek personal tax advice and keep really detailed records of dates.

    6. Will I be up for land tax if I rent using Airbnb ? Perhaps. IF you contrinue to reside there as your PRINCIPAL place of residence it should be exempt. If you move out and dont meet the state exemption requirements for aprincipal residence it may be taxable. The absence rule isnt like CGT.

    7. My wife and I own the property. My wife manages it. She earns no other income. Can we pay her for this management activity. She can get a ABN. No. First of all a person cant contract or pay themselves. Its also likely a tax scheme and the ATO would take a dim view. Anyone can apply for a ABN. I would not consider self managinga property an enterprise eligible for an ABN. It may be an offence to apply for one.

    8. I sublet a room in my rental and have someone using the other room/s more or less full time. So I'm claiming a share of the costs. ie 2/3rd of water, power rent, contents insurance etc How do I treat the kitty for food etc ?? Ignore it. Food is a private issue. Its not income since you all contribute to a kitty and share the use of the food. YOU dont receive income for the food despite the fact you may manage the kitty and everyones responsibilities.
     
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  6. James Bond

    James Bond Well-Known Member

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    Bring it on I say. We have always paid tax on our AirBnB type income and welcome any effort to weed out people who gain an unfair advantage by not doing so.
     
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  7. datto

    datto Well-Known Member

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    How are they going to match the data without a TFN?

    What about tenants that airbnb or foreigners that do it?

    To me, this exercise is a labour intensive waste of valuable resources that should be used to catch more lucrative game.

    Maybe the scare tactics will increase taxpayer compliance.

    Oooh, s264 notice. Who knows what garbage information Airbnb will supply lol.
     
  8. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    A TFN is just a ATO identifier. With a surname (remember Airbnb also have bank details) and address etc and the property address its pretty easy to find evaders. To become a host on Airbnb needs a bit of information and idenity to avoid false/fraudulent listings. The ATO will eventually match each property with its owner/s and then their tax return. Thats the very project outcome they seek

    Yes non owners will be identified in the process. The ATO may make enquires of REAs for the leaseholder identities. The owner may later be required to furnish information too.

    The ATO pay people to recover unpaid taxes. A few hundred mill here or there does pay its way. The ATO do it with salaries, interest, dividends, share trades and so much more.

    Airbnb will be told what to provide. The ATO will have already asked them what information they hold and will have listed some or all of it. And asked for it in a CSV file or excel format as each data field can be imported and cross matched. The ATO will be quite specific as a notice that is not specific can be challenged or refused. Not cooperating can result is serious criminal charges and penalties. They wont do that and its why they told their clients they have complied
     

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