One-off Airbnb hosts in Louth are “slow at coming forward” with tax returns and are being warned to file all of their taxes correctly to avoid the "wrath of Revenue".
Taxback.com, who are the tax partners for the private rentals platform Airbnb, say that the average amount earned by hosts in Louth was €2,900 per year.
A comparative analysis of their own client database combined with new stats released by Airbnb for the Irish market reveals that there is “probable widespread non-disclosure of hosting activities when it comes to tax obligations” despite the companies best efforts to highlight the issue.
The tax refund specialists say they believe the figures suggest that while “professional” or regular hosts are more likely to get their tax affairs in order, people who rent out their property or rooms less frequently appear to be slow at coming forward – possibly due to a lack of awareness of their tax responsibilities.
"The message we are trying to get across to hosts in Louth is that whether you do it once or 10 times the Revenue can access your data just as easily from Airbnb," a spokesperson for Taxback.com said.
Airbnb's tax partners advised: “Given the myriad of tax-deductible expenses out there that can reduce one’s tax liability, it is worthwhile ensuring you are compliant, and avoiding the wrath of Revenue.”
Barry Flanagan, Director at Taxback.com explained the current situation: "Airbnb is growing in popularity with 1,400 hosts listed in the Mid-East (Kildare, Louth, Meath
“Anecdotal evidence leads us to believe that simply not enough people are declaring this income to Revenue quite probably because they don’t know they have to. This is despite Airbnb themselves highlighting this. Our concern is that this level of non-compliance will draw the attention of Revenue, as Airbnb report this income to Revenue annually, and unsuspecting and/or unknowing hosts will be hit with penalties and punishment as a result.”
Taxback.com looked at the average tax reliefs claimed for the last 2 years and found that:
Average tax reliefs claimed in 2017 is €7609
Average tax reliefs claimed in 2016 is €5386
A Taxback.com spokesperson said: "However, the average amount earned by hosts in Louth was €2900 annually. The assertion we’re making, based on these figures and our interaction with Airbnb hosts on a regular basis, is that those who are coming to us to file their tax return are earning well above the average, which we believe suggests that it’s the more “professional” Airbnb hosts who are registering for tax purposes and those who only host a couple of times a year are not.
Taxback.com say the Top 5 Tax Deductible Expenses for Airbnb hosts are:
Mortgage interest, if the host owns the property
Repairs & maintenance
Accommodation costs – towels, meals, tools
Any associated professional fees e.g. Taxback.com fee
3 Steps to Start
Taxback.com have outlined 3 steps that Airbnb hosts should take to kick-start getting their tax affairs in order:
Consider all your sources of income in addition to that generated through Airbnb
Consider what deductions may be available
Consider whether you can claim any other reliefs or credits, such as for medical expenses.