For homeowners in Australia who rent out their homes to earn money through short-term rental sites such as Airbnb,Stayz, future sales involve a capital gains tax issue. They may have to pay tens of thousands of Australian dollars in taxes due to short-term rentals and face losses over gains.
The Australian Inland Revenue Authority (ATO) confirmed that self-housing, which is the main home of homeowners, would have been exempted from capital gains tax, but that rental by homeowners would have led them to lose the exemption from capital gains tax.
Deborah Jenkins, the tax officer in charge of small-and micro-business businesses, notes that while short-rent homes can increase extra income, many residents do not realize that short-rents themselves pose a problem with capital gains tax obligations. According to its disclosure, many owners of shared housing do not know about this.
Capital gains tax risk
Tony Sloan, a senior tax partner at BDO, said he was obliged to pay capital gains tax when he finally sold his home if the owner rented all of his own house or a particular room.
Capital gains tax will be calculated based on the proportion of their rental portion of the entire house and the length of the rental period. Tenants use the bathroom, kitchen, living room, also according to the proportion of the house to pay taxes. And if homeowners don`t pay taxes or declare what they earn from renting their homes, they could be fined.
Darryl Dobe is the first batch of co-owners of Piguet`s (Airbnb) short-term rental platform. Since 2013, a vacant room in sea view room, north Sydney, has been hanging on Audemars website for short rentals. It estimates that half of the year the house is used for rental.
In Darryl Dobe`s view, they value the social activities and experiences they bring to their families more than the extra income they bring to their families.
, Darryl Dobe said he was unaware of a possible capital gains tax problem with rental housing. In an interview, Darryl Dobe said his family was very cautious about their tax obligations, arguing that short-term rental income could be declared as personal income.
Second, the "big data" of the tax office
Using state-of-the-art data matching technology, Australia`s tax authorities are fully capable of tracking the "sharing economy" of short-term sub-rentals, according to Australia`s Domain real estate network. They can get more than 65 million copies of data from many third-party sources, including personal income data from banks.
A spokesman for the Australian Inland Revenue Authority said their technology could detect when taxpayers had a sizeable amount of income to assess how much taxable income should be, and if signs of irregularities were detected, The Inland Revenue Department will conduct further investigations.
At the same time, it is clear from the terms of service that "tax regulators may require us to collect tax information about homeowners or deduct taxes from owners on their behalf."
Third, the owner of the house is not worth the loss.
Short-term rentals have led to changes in income assessment and capital gains tax on home sales, legal experts said. The only place to save money is that homeowners can declare mortgage interest tax cuts. This part of the tax credit will be based on the rental portion should account for the proportion of mortgage loans.
Given the soaring housing prices in Sydney and Melbourne over the past five years, it is likely to be a big fee if renting through a sub-website leads to a capital gains tax. Capital gains tax may be paid far more than the original rental income. How much tax should be paid depends on the value and size of the property.
In recent years, Aiying their shared economic platforms show exponential growth. Australia alone has more than 1 billion registered homes on its website.
