Cheaper homestays tax change winners
Inland Revenue’s proposal to make tax returns simpler for short-term accommodation providers may be beneficial only to low-cost homestay businesses, an expert says.
‘‘It may be beneficial to a low cost house renting one room and doing the cleaning or laundry themselves,’’ Compass Business Partners director Sam Harwood said.
‘‘On the other hand, it wouldn’t be beneficial to a high-end property who has a laundry service and provides a five-star breakfast.’’
This comes after Inland Revenue public rulings director Susan Price announced the department was trying to make tax easier and simpler for hosts to claim deductions and encourage compliance.
Harwood said the proposal had missed some pertinent areas associated with homestay providers.
‘‘The proposal is not clear on whether this is a per room or per house cost, whether it is only for people renting out one room only, and whether losses can be claimed if income is lower than the standard cost.
‘‘We’d need more detail before determining the true benefit, it really depends on owners’ circumstances.’’
Harwood said Inland Revenue’s proposal of $50 deductions a night if the host is the homeowner and $45 a night if the host rents the property was done to bring taxpayers into line.
‘‘I think the IRD have just plucked an arbitrary number out of the air in the hope of bringing some more taxpayers in line,’’ he said.
Kristina Cahill, owner of Little Eden accommodation in Timaru, said the proposal by Inland Revenue could help to make the laws clearer for Airbnb operators.
‘‘I don’t know what the rate is at the moment because this is my first year as a host so I haven’t had my books done for the year. I’m not familiar with stats and everything.’’ Cahill said. ‘‘But if we can get something back it is good thing.’’
Jan Marris, owner of the Masonic Hotel in St Andrews, said the simpler process for Airbnb hosts to file their taxes was a very good idea. ‘‘I would be very happy with that,’’ Marris said.
He said because he runs his establishment as a hotel, and uses the Airbnb platform only because it is a very good network, it would not affect him, but this proposed platform would definitely benefit smaller householders who host guests.
Airbnb head of public policy in Australia and New Zealand, Brent Thomas, welcomed the proposal.
‘‘We welcome any proposal that makes it easier and simpler for our hosts to share their homes and pay their fair share of taxes,. We will closely consider Inland Revenue’s proposal and look forward to participating in the consultation process,’’ Thomas said.
The hosts still have the option of calculating and claiming their actual costs if they preferred.
‘‘The changes are aimed to simplify tax obligations for people who occasionally host short-stay accommodation guests in their home, using websites such as Airbnb or Bookabach,’’ Price said. ‘‘Inland Revenue is hoping that the change would reduce tax evasion and so result in more tax being paid overall.’’
Thomas urged all Airbnb hosts to comply with local laws and taxes.