TAXMAN’S SCAREBNB FOR MUMS AND DADS
Short-stay business hands over the details of hosts to ATO as part of major crackdown on sharing economy
Airbnb hosts who fail to declare their income are being targeted by the Australian Taxation Office.
The popular home-share platform, which is worth more than $30 million to the WA economy, yesterday told its users that it was “currently under legal notice by the Australian Taxation Office to share information concerning your hosting activity”.
Anyone who used Airbnb in the first six months of the year is in the tax office’s cross hairs, with Airbnb handing over names, addresses and phone numbers. An ATO spokeswoman said it had launched an extensive data matching program to identify taxpayers receiving money from short-term rentals.
She said information from online platform sharing sites for about 190,000 Australians would be examined to “identify
taxpayers who have left out rental income and over-claimed deductions”.
Failure to declare income to the tax office can result in hefty penalty rates and even prison in cases of systemic tax evasion.
Margaret River Guest House owner Debbie Noonan, who has campaigned against people using the platform to illegally rent private homes, was one of the thousands of Australians who received the notification.
“There are a lot of people who are going to be stung by capital gains,” she said.
“Insurance fraud and bank fraud are other problems people are going to encounter. There are a lot of people running small businesses from their homes who have a regular home loan application. This will open the floodgates to more issues. The ramifications for a lot people will be considerable.”
Tax accountant Carlo Genovese said people using Airbnb and Uber should use the detailed full-year financial reports provided by these groups as the basis for their tax return.
Mr Genovese said the ATO had developed sophisticated data gathering capabilities and people took big risks imagining they could satisfy the tax office by scribbling their financial records down on a piece of paper.
“Unless you are dumb enough to try operating off your own bat, you are far better off using Airbnb’s reports,” he said.
Australian Hotels Association (WA) boss Bradley Woods welcomed the crackdown. “As the unregulated accommodation sector has grown, traditional accommodation providers have suffered as a result of unequitable taxation arrangements whilst taxpayers have missed out on a substantial revenue stream,” he said.
Airbnb’s Brent Thomas said the tax system was confusing: “We shouldn’t be making it harder for people to supplement their incomes, combat cost of living and help generate jobs.”
In August last year The Weekend West warned about an unforeseen consequence of the rise of Airbnb.
In that instance it was about concerns about the fallout for the traditional holiday accommodation sector in Margaret River.
Businesses said that the rules, or rather lack of them, around the operation of Airbnb had meant that the competition for the tourism dollar was anything but a fair fight.
Margaret River’s registered accommodation providers were concerned that the sites did not have the same expensive overheads of registered providers and did not need to comply with statutory requirements governing issues such as fire prevention, parking and food preparation.
But today this newspaper reveals change is on the way.
People who rent their homes on Airbnb and fail to declare the income are being targeted by the Australian Taxation Office.
Airbnb yesterday told platform users that it was “currently under legal notice by the Australian Taxation Office to share information concerning your hosting activity”.
Anyone who used Airbnb to rent out rooms or entire homes in the first six months of the year is in the tax office’s cross hairs, with Airbnb handing over names, addresses and phone numbers.
It is estimated that about 190,000 people will be put under the microscope.
Australian Hotels Association (WA) boss Bradley Woods welcomed the crackdown.
“This will significantly improve transparency and increase equity between traditional tax-paying accommodation providers and the largely unregulated short stay accommodation sector. This is an important development that will result in greater accountability of online accommodation platforms and short-stay accommodation providers.
“Property owners who have correctly assessed and declared their income tax, GST and other obligations or earnings from these activities and complied with Australian tax laws, should have nothing to be concerned about.
“As the unregulated accommodation sector has grown, traditional accommodation providers have suffered as a result of unequitable taxation arrangements whilst taxpayers have missed out on a substantial revenue stream,” Mr Woods said.
He makes some extremely valid observations.
There is a need to ensure a level playing field.
It is in all our interests for long-term, traditional accommodation operators to remain viable.