AirBnB tax calculations

Question from Natalie updated on 7th November 2016:

We rent out our sleepout on AirBnB, for short-term rentals. We know we need to declare income, and can claim expenses, but we are not sure of the 'method' for this? We don't seem to be landlords (overnight stays) and they're not boarders (no meals). And would we count expenses as a % of floor space? or % of occupancy? 

Our expert Mark Withers responded:

I think the answer depends on whether the sleep out is used exclusively for the AirBnB guests or whether you also use it personally when not rented.

If it is exclusively for guests simply apportion based on its sqm size relative to your dwelling.

If you use it as well and it is vacant for 62 days or more it could be considered a mixed use asset. In this situation you would do the same per sqm apportionment, but you would then need to reduce the claim for the mixed use costs by determining the percentage of booked nights as a percentage of total nights used. This then effectively excludes a deduction for the nights it is neither booked nor used personally.

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

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