Date: 2nd March 2017
Homeowners and holiday home owners in tourists centres like Queenstown, Wanaka and Cromwell, have jumped on the opportunity to earn money through providing accommodation to travelers on booking sites such as airbnb.com, bookabach.co.nz and holidayhouses.co.nz. But here’s a heads-up: due to the growth in this form of short term visitor accommodation over the last couple of years, it has now become an area that Inland Revenue is considering targeting. They are wanting to ensure all income derived is being declared.
The information about who is providing these services, and how much they are charging, is readily available online through the various booking sites. This makes Inland Revenue’s job easy – they can see who is including income from these services in their tax returns and who is not.
There are some complex tax matters surrounding this activity, especially with regards to GST potential liabilities, mixed use of property (personal vs. income use) and apportionment of valid deductions.
In addition to income declaration requirements, local governments have their own regulations. The Queenstown Lakes District has issued warnings to many homeowners who are advertising their properties for short-term rental online. They have stated:
Visitor accommodation (VA) is where you use your property for short-term living accommodation where the guests pay fees to stay there. Depending on your situation you may need to:
If you are renting your house out for short term visitor accommodation, it may be a case of making a free registration and paying an increase in rates. Different regulations apply in different situations. Check out the visitor accommodation guidelines on the QLDC website.
If you are, or have been, deriving income from any accommodation provision sites, we would strongly recommend you contact us, so we can discuss the potential tax liabilities you may have. Likewise, if you’re thinking of providing these services in the future it would be in your best interest to discuss this with us as well, so you are completely informed of the possible issues you may face. Get in touch now to book an appointment.