The Tazhou couple were fined nearly A $10, 000 for renting their homes on Airbnb. (photo by News Corp)
An Australian couple rented their home on Airbnb and was fined nearly A $10, 000 by the Inland Revenue Department, News Corp reported.
The couple from (Tasmania), Tata, travel to New York for a while each year, when they rent their homes for a short period of time. The couple said they rented their homes largely because they wanted someone to look after the house, not to make money. But the TSA's (Tasmanian State Revenue Office) debt system sent them a letter saying they owed nearly five figures in tax. The couple have been renting their homes for a year, so they should pay a land tax, the tax said.
It is reported that owners usually only need to pay a land tax for the second property, but if the owner of the short-term rental property, it will be required to pay the tax. The current legal definition of the relationship between landlords and clients on Airbnb is vague, so existing laws are often "distorted" and owners are forced to pay fines.
Gogatti (Brendan Gogarty), a senior lecturer at (University of Tasmania) at the University of Talla, said there had been a number of similar cases. Many people have received debt notification letters from the tax system.
The system is known to incorporate data from parties such as the Australian Inland Revenue Authority's (Australian Taxation Office), Bond Agency to find out if people earn money from their own homes. If there is a situation where there is no land tax and income generated from housing, the Inland Revenue Department will issue a survey notice and questionnaire to them. If people do not complete the questionnaire within 14 days, they will be fined, which is very disadvantageous.
Gogatti said many people were shocked to receive the notice but would still choose to pay fines because they feared they would be charged with tax evasion. He also pointed out that not only Airbnb landlords will face this type of fine. Anyone who earns money from his own property without paying a land tax will face a fine.
One man, for example, was fined for renting his property's room to someone else in Tasmania. Although he was required to declare his earned income to the Inland Revenue Department, he could not escape punishment.
Gogatti said the laws surrounding the Airbnb and the use of property to make money are unclear, so many people are confused about when land taxes should be paid. He said it was reasonable to collect taxes from landlords on the Airbnb because such transactions were actually commercial, but he felt there was a problem with the IRD's handling of the rules, which were unclear and that the government should make the regulations clearer. He suggested that those who received such letters should consult accountants or legal experts.