Can I add my rent expenses to be deducted from my tax incomes with the Airbnb?

B13

Hello!

Does anyone know if rent expenses can be deducted from the Airbnb income taxes?

So far I found at https : // assets. airbnb. com/help/airbnb-pwc-taxguide-ireland-en.pdf?_ga=2.23348474.1322661123.1577999599-746625424.1571859800 :

"
Typical expenses that can be deducted from an individual's income in relation to short-term lettings.

● Insurance premiums ● Maintenance costs - e.g. cleaning, painting ● Repairs carried out on the property ● Cost of goods or services that you have provided - e.g. gas, electricity ● Management costs - e.g. property management fees ● Advertising fees or online commission payments. ● Pre-trading expenditure incurred up to three years prior to the commencement of the trade.
"

I've also read https : // www . revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-04/04-01-20.pdf, but didn't see anything about rent expenses.

Although I didn't see rent, I saw that the listed items are examples, but not limited to them, which suggests rent (and other things) may be eligible.

I was considering to add my rent expenses through the following calculation:

Rent paid per day / Number of rooms * Number of rooms used by guests per night * Number of booked nights.

Does anyone know if this is allowed?

relax carry on

B13 wrote: »

Hello!

Does anyone know if rent expenses can be deducted from the Airbnb income taxes?

So far I found at https : // assets. airbnb. com/help/airbnb-pwc-taxguide-ireland-en.pdf?_ga=2.23348474.1322661123.1577999599-746625424.1571859800 :

"
Typical expenses that can be deducted from an individual's income in relation to short-term lettings.

● Insurance premiums ● Maintenance costs - e.g. cleaning, painting ● Repairs carried out on the property ● Cost of goods or services that you have provided - e.g. gas, electricity ● Management costs - e.g. property management fees ● Advertising fees or online commission payments. ● Pre-trading expenditure incurred up to three years prior to the commencement of the trade.
"

I've also read https : // www . revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-04/04-01-20.pdf, but didn't see anything about rent expenses.

Although I didn't see rent, I saw that the listed items are examples, but not limited to them, which suggests rent (and other things) may be eligible.

I was considering to add my rent expenses through the following calculation:

Rent paid per day / Number of rooms * Number of rooms used by guests per night * Number of booked nights.

Does anyone know if this is allowed?

Sorry your post isn't that clear. Are you using your own property for Airbnb or you using a property that you don't own for Airbnb purposes? Are you residing in the property that you are Airbnbing?

Calahonda52

relax carry on wrote: »

Sorry your post isn't that clear. Are you using your own property for Airbnb or you using a property that you don't own for Airbnb purposes? Are you residing in the property that you are Airbnbing?

+1
In other words are you using a rented priority for ANB?
Do you have the landlord's consent.?
Do you have the necessary insurance to cover you/the land lord if something goers wrong?
In my view the rent is not an allowable expense as its purpose is to allow you rent, and live in the property, not to provide ANB.

wiggle16

AirBnB is NEVER treated as rental income.

I don't know if this will answer your question but it is important to consider. There are two ways that AirBnB income is treated. This depends on frequency.

In the first instance, if you own a property that you use regularly to provide short term lettings (AirBnb) then this will be treated as trading income (case I) - in the same way as it would be treated if you were running a real BnB. From this income you can deduct most allowable expenses, pre-letting expenses, repairs, maintenance, etc. For this purpose, the property would be available for most if not all of the year for lettings and almost exclusively for the purposes of providing lettings, ie, you would need to be carrying on AirBnB as a business activity.

The second is less frequent, or incidental. This is treated as case V income (other income). Instances of this would be if you have a property which is let to tenants, who then leave, and you have a couple of months where the property is vacant and so you put it on AirBnB until you get new tenants in. Or if you have Airbnb in your own home, or if you own a holiday home and take in a few AirBnB lettings for a couple of months in the year.
In this case, you are not allowed the normal expenses that you would be allowed against case I income. No pre-letting expenses, no repairs/maintenance etc. You are allowed the reasonable costs of providing the letting, such as buying food and toiletries for the guests and the cost of cleaning the premises after they leave etc.

The important thing to remember is that it is NOT treated as rental income. Losses made on AirBnB cannot be offset against rental income either.

Revenue don't seem to have defined how frequent "infrequent" is, and I would say that's so they can decide on a case by case basis whether or not a person is carrying on AirBnB as a business activity or as a way of making a few bob off a second property. If you are not sure which one applies to you then you probably fall into the second category and should be careful what expenses you claim. In order to qualify for the first, you would realistically need to be organising these lettings as if it were a real BnB.

wiggle16

And no, if you are letting a room in a property you rent, you are NOT allowed to deduct the rent as an expense against the income - because it's not an expense.

The rule of thumb is, if you would be paying the money regardless of whether or not it was let to AirBnB, then it is not an allowable expense.

Marcusm

wiggle16 wrote: »

AirBnB is NEVER treated as rental income.

I don't know if this will answer your question but it is important to consider. There are two ways that AirBnB income is treated. This depends on frequency.

In the first instance, if you own a property that you use regularly to provide short term lettings (AirBnb) then this will be treated as trading income (case I) - in the same way as it would be treated if you were running a real BnB. From this income you can deduct most allowable expenses, pre-letting expenses, repairs, maintenance, etc. For this purpose, the property would be available for most if not all of the year for lettings and almost exclusively for the purposes of providing lettings, ie, you would need to be carrying on AirBnB as a business activity.

The second is less frequent, or incidental. This is treated as case V income (other income). Instances of this would be if you have a property which is let to tenants, who then leave, and you have a couple of months where the property is vacant and so you put it on AirBnB until you get new tenants in. Or if you have Airbnb in your own home, or if you own a holiday home and take in a few AirBnB lettings for a couple of months in the year.
In this case, you are not allowed the normal expenses that you would be allowed against case I income. No pre-letting expenses, no repairs/maintenance etc. You are allowed the reasonable costs of providing the letting, such as buying food and toiletries for the guests and the cost of cleaning the premises after they leave etc.

The important thing to remember is that it is NOT treated as rental income. Losses made on AirBnB cannot be offset against rental income either.

Revenue don't seem to have defined how frequent "infrequent" is, and I would say that's so they can decide on a case by case basis whether or not a person is carrying on AirBnB as a business activity or as a way of making a few bob off a second property. If you are not sure which one applies to you then you probably fall into the second category and should be careful what expenses you claim. In order to qualify for the first, you would realistically need to be organising these lettings as if it were a real BnB.

It would only be treated as case I if done with sufficient regularity as to constitute a trade. Ancillary lettings of part of the occupant’s own property on a non-exclusive basis would more likely be assessed under case IV as casual profits (computed on a case I basis). For it to be case V, I think the customer would have to occupy the property to the exclusion of the OP.