Renting from myself through Airbnb?

Discussion in 'Legal Issues' started by aussieB, 26th Apr, 2017.

Join Australia's most dynamic and respected property investment community
Tags:
  1. aussieB

    aussieB Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    389
    Location:
    Darwin
    Are there any legal repercussions if a PPOR loan is converted to an IP loan, the property is let out through airbnb - the actual owner of the property then rents the property from him/herself through airbnb ?

    I am not trying to find ways to fraud the system - but curious to know if someone has tried this. And if so, what was the outcome.
     
    aussieB, 26th Apr, 2017
    #1
  2. DaveM

    DaveM Well-Known Member

    Joined:
    14th Jun, 2015
    Posts:
    3,761
    Location:
    Adelaide & Sydney
    You cant contract with yourself. And most likely not deductible as not arms length
     
    DaveM, 26th Apr, 2017
    #2
  3. Marg4000

    Marg4000 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,421
    Location:
    Qld
    You can't rent from yourself and claim tax deductions.
    Otherwise everyone would do it!
    Marg
     
    Marg4000, 26th Apr, 2017
    #3
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,536
    Location:
    Sydney
    You could. If you want to. There is no specific prohibition other than foolishness...

    You would have assessable rental income and be denied all deductions if you claimed them. If the ATO found you doing this after 2 years then they could get nasty and deal with the denied deductions as evasion and leave the income in the return (which you cant amend!) AND add a penalty of up to 75% for recklessness. You will also lose out through the airbnb fees.
     
    Paul@PAS, 26th Apr, 2017
    #4