Is your property Airbnb-ready?
Airbnb, a global online marketplace connecting hosts with travellers, has revolutionised short-term and long-term homestay experiences worldwide. Since its creation in August 2008, Airbnb has become the leading Short-term Rental Accommodation (STRA) platform, with over 70,000 properties listed in Australia, and 2 million globally, setting the stage for similar providers like eDreams, Bookings.com and Stayz. While Airbnb hosting offers opportunities to boost local economies through seasonal tourism, the laws surrounding Short-Term Rental Accommodation present legal complexities that must be navigated.
How do I list my property on Airbnb?
The process of registering a property on Airbnb involves multiple stages, starting with an assessment of eligibility and an extensive review of contractual agreements, permits, building regulations and leases. Additionally, hosts must check and comply with their community council and landlord, as rules against hosting or subletting may exist, and consent must be provided by landlords to tenants. Furthermore, property owners with loans, for example a mortgage, should confirm any restrictions with the lender. For instance, under recent New South Wales (NSW) laws, strata owners can pass by-laws prohibiting short-term rentals if the owner does not reside in the apartment or unit.
The next stage of the listing process is to register your Short-Term Rental Accommodation property on the NSW Government’s STRA register, a legal necessity under the 2021 NSW ‘Code of Conduct for the Short-Term Rental Accommodation Industry’. This registration, renewed as needed, is compulsory to the process of advertising listings on Airbnb, and can be completed through the NSW Government’s Planning Portal, providing a registration number which must be noted on host listings. Non-compliance can lead to fines of up to $1.1 million, and breaches of the Code of Conduct may result in warnings, financial penalties, strikes, and potential placement on the Exclusion Register, prohibiting participation in the STRA industry. If NSW Fair Trading finds that two aspects of the Code of Conduct have been violated within 2 years, hosts may be excluded for 5 years. Hosts must also abide by the STRA Fire Safety Standard, which involves installing fire extinguishers and smoke detectors, while ensuring overall safety.
Does tax apply to my Airbnb property?
A key consideration for Airbnb hosts is the tax implications of their added income. Generally, Airbnb hosting earnings are considered taxable, and may be subject to GST, income tax, rental tax, and other forms of taxation. However, hosts may be eligible for allowances and tax reliefs for costs associated with maintenance, commercial cleaning, photography, food, and repairs. Proper record-keeping is essential, with hosts required to accurately document all income earned, as well as expenses claimable for deduction, and declare this in their income tax returns.
Do I need insurance?
Airbnb provides its own insurance: Aircover. This includes Host Damage Protection - reimbursing hosts for unpaid damages inflicted by guests -, Host Liability insurance - protecting hosts from their guests’ being hurt, or their belongings being damaged or stolen -, and Experiences liability insurance - protecting Experienced Hosts found responsible for guests’ injuries and damaged belongings. Moreover, Airbnb Host Guarantee applies automatically to bookings, covering guest damage up to $1 million, with similar claim procedures to insurance policies. While Aircover does indeed protect hosts, it is not a substitute for other fundamental insurance types, so it is imperative that hosts secure their own insurance covering short-term rentals in addition to maintaining other property-based insurance.
The flexibility and diversity offered by Airbnb in the Short-Term Rental Accommodation industry have transformed the way that we holiday. However, as laws in this sector are continuing to evolve, hosts must stay informed about current rules and regulations to ensure a safe and legal listing of their property on Airbnb.
Should you have any questions, please do not hesitate to contact us on (02) 9170 0899.
Written by Olivia Maietta