Airbnb Hosts Beware of Requirement to File a Tax Return!


Airbnb has gained widespread worldwide media attention in the last few years due to the success of the service. Essentially the service provides an online platform which allows home owners to offer their homes/rooms up for rent for a specified time and price, to anyone seeking accommodation as long as they have a profile on the site. Since its inception in 2008 they have built up an impressive network which can now cater for pretty much any location globally.

On a commercial level it is commonly seen as a disruptive new business model to challenge the well-established hotel and accommodation economy. Given its prominence in mainstream society it has now attracted attention from governments worldwide. In Ireland alone it is estimated that over 4,500 properties are available on Airbnb.

The message from the Irish Revenue is clear: this newly earned income is taxable and recipients must complete an Income Tax return in respect of same. Recent reports and statements from the Revenue Commissioners indicate that they estimate that over 2,200 homeowners will be renting for the first time. These new landlords may not be aware of the tax process or  deadlines (not to mention the late filing penalties and interest which can accrue!) due to a lack of any experience in this area.

Guidelines & Important Information

Airbnb have stated that they are legally obliged to provide certain information to Revenue Commissioners. Information like how many times the premises was rented in a certain timeframe will be made available. The deadline for filing a tax return for property rented in 2014 is 31 October 2015. This is extended to the 12 November should one complete the process online.

It is also important that any first time tax filers also understand (and claim) any relevant associated expenses in relation to this activity and this is where a using the services of a tax professional can be vital.

Finally, Revenue Commissioners have confirmed that their view is that the rent-a-room scheme (which allows people to earn up to €12,000 in rental income per year tax free) does not apply to Airbnb hosts.  This relief typically would only apply if the occupant was staying long term which is the reverse of what Airbnb offer. It is worth noting that some tax commentators would not agree with this interpretation and therefore Airbnb hosts should really take tax advice on what position they should adopt.

If you would like more information or would like assistance with your Airbnb Tax Return Filing, please contact us for a consultation.