Airbnb owner problems

I kinda agree with you but I like that the rental yields are super strong (let's say 80% above normal) and without having to venture into a high risk area like a mining town....

 

Without creating a new Airbnb thread, do you guys pay land tax for properties that you run a Airbnb setup?

 

I'm sure there would be land tax to be paid if you go over the threshold.

Yeah the yield is awesome but you need to work for it. i find that you can make twice as much on airbnb as you would if you rented. my wife quit her job and is just managing our properties through Airbnb. Couldn't be happier, she likes to deal with guests.

 

Who is you guys ?

Here in Aus, in the states I am aware of, land tax is paid on residential property that is not the home once above the threshold, it does not matter if the property is being used, or vacant, or just a block of land.

 

Gockie in particular but happy for others to chime in. Trying to figure out if I should get regular flatmates or go down the Airbnb path with a property that i live in 4 nights a week.

 

it would depend a lot on your location....

 

You can read about the potential problems for AirBNB, but if you do gain income via AirBNB, there are CG implications for your home apparently.

 

You shouldn't be paying land tax on it since its your PPOR. Note i'm not an accountant nor a tax specialist so you might need to ask a second or third opinion. Lets say I believe it would be unusual/unnecessary to pay land tax on your PPOR.

 

I think mini2 woukd have the same issue for regular flatmates too so no difference in this regard (unless its done under the table which is very possible with the regular flatmate scenario)

 

Did you need a special license to rent via airbnb in Australia? I looked at doing it here since I have a property available but its totally illegal without a special tourist license, which they don't give out anymore. Some people who did it have got fines over 3000 - 15000 Euro. Uber also illegal in Barcelona.

 

There's no special licences....

 

I don't know - maybe, that is not being run as a business maybe or under the table, it is also not being run through a large company who we know the ATO will be monitoring and is no question, my thoughts are neither is worthwhile unless your really getting a good reliable income, but then we enjoy privacy and bit house proud I guess

@Casteller no, anyone can do AirBNB but some may have trouble with local council in some areas, or with the body corporate if in a unit block.

 

The airbnb place we recently stayed in north of Hobart - it was awesome. The owner gave us an entire box of Belgian Choccies on top of the gourmet locavore produce breakfast.

 

The rental yields are high but if they get out of hand, local government often tries to regulate it. People renting out a home they don't live in cannot always be responsible for what renters/guests do. In some cases they are throwing wild parties in residential neighborhoods and they draw complaints. In some places the use of units for Air B and B drives up the rental costs and that too can draw calls from regulation from Local authorities.

 

Interesting how some countries have allowed it and others prohibit, search and actively prosecute (Spain).

Anyway I have found a legal alternative but minimum stay is 32 days, probably suits me better as lower tenant turnover and likely better medium term tenants (less stress) rather than tourists. Lower rental return though.

 

Personally, I like it when my guests stay over 2 weeks for the same reasons (3 weeks is great!) and so I have a minimum stay of 5 days. But if it was in my home and they would interact with me I would have different rules.

You know, this was a fear of mine initially, but you vet the guests first, check their previous reviews. I don't know any guests who have thrown "wild parties" but along with normal tourists I've had quite a few come over because they have some event on at one of the nearby unis (maybe a conference they are attending or presenting at or graduation), new grandparents visiting Sydney to support new parents, people coming to Sydney for work purposes temporarily, including a creative type who was doing some filming in the local area and even families who come here during school holidays so their kids can study English for a few weeks!
If my guests pay quite a bit of money to stay I also think they can be trusted to generally do the right thing.

Negatives i've had is one lady who came in with a small pet dog (she said it wasn't hers but i'm sure she was lying because she had the pet bowl, food, leash under the stairs plus the dog left dog dirt in the crease in the couch), a couple of guys (I can think of 2) who complained a lot and a group that took all the toilet paper, most of the food, a full bottle of shampoo and I believe they stole a pillow too. But you can claim against them.

Let me say, I agree it takes properties out of the market for tenants but Airbnb is also good if the rental market is slow and your property has some sort of characteristic to have guests stay. You don't want your property to sit vacant weeks on end.... I own a place near me and I couldn't get a tenant in 2 weeks of marketing (maybe the price was a little high, maybe there were too many other properties available at the same time or something not ideal in marketing? Not sure). Anyway, I didn't want it it sit there for any longer than necessary so I decided to list it on Airbnb.... I secured a 43 night booking within 24 hours of listing it, and the place was then solidly booked. This solution is too hard if the property/ies are in another city though.

You also see tenants taking in Airbnb guests too either for the full unit or for a spare bedroom or two. And there are owners who rent out a room or 2 in their PPOR due to Airbnb who wouldn't have rented out their rooms to long term housemates. People are profiting in many different ways, and people realise they can get income from their spare rooms (this is generally how I tend to stay if i'm in a different city) - it is some work though for the owner.
I figure I may as well take advantage of it but if I get sick of it I can turn mine back to a normal rental. I'd lose the ability to stay there myself though!

You could also Airbnb a property just before sale if your tenants moved out and you have furniture there (its not too difficult or expensive to furnish a smallish place anyway). In 2010 I sold a unit but the tenants moved out before the marketing campaign started. After the place had secured a buyer ideally I would have Airbnbed the place (it wasn't too far from my home) to have some sort of income coming in from the place. But in 2010/2011 Airbnb was not really known in Aus, so it sat there vacant that whole time...

 

For the record. I love Air B&B and see it as a force for good in most communities. It is like anything when people gain a system for short term game, they hurt the long time prospects.

 

Airbnb hosts should prepare for close scrutiny from the tax office, warns industry leader
Link

Anyone who is renting out a property but not declaring income from that property will be targeted by the ATO.

“Compliance initially takes place behind the scenes. They’d be data matching, going through information on the site and then matching it with their records,” Chapman said.

“And because all the information is advertised on the internet, it’s easy for the ATO to find out who these people are.”

“People would tend to regard their Airbnb money as pocket money,” he said. “I think a lot of it is ignorance and the ATO to an extent has contributed to this, until they put out their informational campaign.”

The ATO said the existing rules apply regardless of who you rent your room through. These rules apply both to traditional rentals as well as sharing economy services such as Airbnb.

“Whether you’re renting out a property through traditional avenues or through the sharing economy the message is the same: keep good records, declare all your rental income and make sure you have evidence for any claims you make,” an ATO spokeswoman said.

 

Bah I'll chuck this into the too hard basket for now until I get desperate or find housemates (and this doesn't save me from the land tax situation either if found out).

Problem is, this isn't my PPOR (that's with another property) and it's down in the ACT where anything rented regardless of land value will incur land tax. I've called them up and pretty much confirmed my suspicion.

 

So how do you get around the land tax issue then? (sorry I wasn't aware it was Canberra you were referring to)