Issues rentng part of the house for AirBNB

Hello,
Got a friend who is considering renting part of their house (self contained area) via AirBNB. Had a few questions.

1. I have heard a lot of insurance companies now dont cover you, any idea how many are doing this and how much more you are likely to pay for building insurance? Any place that has a list of who covers airbnb or not?

2. As this is a PPOR how will it effect CGT? Would it make you liable for pro rata % of the building for % of the ownership period?

3. How does this effect land tax, are you liable full or pro rata liable? The place in in SA but it would be good to know what its like in other states as well.

Cheers

 

These are good questions.

I am going to ask my insurance company about air bnb part of our PPOR. Haven't decided to do it, but a lot of ppl do in my area.

I expect that it will affect CGT that is the one thing that might make it not worthwhile.

Hope someone else has some answers too

 

1. Some insurers offer a policy that includes 'short stay" clauses and cover eg EBM have a specific policy with additional cover. Many general insurers have rules that may affect cover unless they know. Most general insurers cover "leased" premises and a Airbnb arrangement is not a lease.

2. Pro-rata CGT exemption for the % used as a home. Often based on % use. Time and area from example. Being "available" for short stay means it is NOT exempt even if its vacant. While a % remains subject to CGT you can also claim a % of ownership deductions and some private costs may even increase the costbase by being third element costs.

3. Land tax in most states exempts the whole property if its also your home. However if you rent by the room that can be atrap eg NSW allows ONE room as exempt and if you rent two rooms and live in third then proportionate land tax could apply. OSR in your state can advise.