One of the most popular ways to earn additional income is renting a room through Airbnb. Platforms of the sharing economy with websites and apps such as Airbnb, Stayz or something similar provide an opportunity to rent out spare rooms without the long term commitment. 

You will need to:

• Keep a record of all income earned and be declared in your income tax return
• Keep a record of expenses that can be claimed as a deduction
• When selling the property, you will need to calculate your capital gain

The income you will need to declare:

• All income including all fees and commissions
• Insurance payouts, such as compensation for damage 
• Security deposits or bonds you retain
• Letting, booking and cancelation fees

Deductions you may claim include, in proportion to area rented out:

• Host fees
• Gas, Power and Council Rates
• Property insurance
• Cleaning and Maintenance
• Other associated expenses

Capital Gains Tax (CGT)

CGT may be payable when you sell the property. Generally, CGT does not apply to the home that you live in (under the main residence exemption).

However, if you rent out your main residence (even just a room on Airbnb), you may not be entitled to the full exemption.

It is important not to try and hide your Airbnb income. The ATO has access to this information and can easily track this income.

Alternatively, you can contact AWT Accountants on 9303 8900 or clientlink@awtaccountants.com.au for assistance.