Revenue have been issuing letters to homeowners who have been letting their property through Airbnb. These letters are covering the periods from 2014 through to 2016.

Airbnb have been providing information to Revenue since 2015 so it will be a matter of time before the dreaded letter from Revenue arrives in the letterbox.

There are a number of tax considerations for this income;

  • Income tax
  • Vat
  • Capital Gains Tax

Income Tax

The income threshold for a single person is €34,550 in 2018. So, if you have PAYE worker and receive Airbnb income you may be liable to tax at 50%. So, by not declaring your Airbnb income, you are liable to income tax, interest and penalties. This can lead to a significant tax liability. Which could ultimately lead to publication on the Revenue defaulter list.

The tax return filing deadline for 2017 is 31 October 2018 and this is extended to 14th November 2018 if you file and pay online.

Vat

If the income exceeds €37,500, then you must register for vat. Returns are normally filed bi monthly with Revenue. The vat rate is 9% as this would be classed as short-term accommodation. The taxpayer can reclaim vat on any business costs such as cleaning, light and heat.

Capital Gains Tax

There could be implications on taxpayers claiming principal private residence relief. This relief enables a homeowner to sell their home and not pay any capital gains tax if certain conditions are met.

We prepare many landlords rental tax returns and would be happy to discuss any issues with you.