Airbnb hosts unhappy at lack of clarity over tax issue

Accommodation company Airbnb has held a meeting in Dublin, for people in Ireland who may owe tax on income earned by renting rooms and properties through the website.

However, Airbnb hosts said there was no tax or legal expert to answer their questions and the meeting did not provide clarity on the situation.

Airbnb has contacted hosts to warn them that it is legally obliged to provide certain information to the Revenue Commissioners.

It is expected thousands of users in Ireland will now be billed for tax dating back to at least the middle of last year.

The Irish Tax Institute is advising those affected to make a voluntary disclosure to Revenue.

The institute has said that Airbnb hosts may have to pay tax of up to 52% on the net rent they receive from letting.

Speaking on RTÉ’s Morning Ireland, Policy Director Cora O’Brien, said that while people may not have realised they would have to pay tax or thought they qualified for the rent a room relief, this was not the case.

Ms O’Brien said that relief is available for people who let out a room on a residential basis, perhaps to a student for six or nine months.

She said the Revenue Commissioners clarified this point earlier this year and regarded holiday rentals like Airbnb as a trade.

Meanwhile, Revenue say that their advice to Airbnb hosts is that they will not be liable for capital gains tax, on a principal private residence, unless they are exclusively using a room in their house for Airbnb.

A spokesperson for Revenue said if a room is mainly for family purposes with occasional Airbnb usage hosts will have no capital gains tax liability.

In a statement today, Airbnb said: “On Friday we informed hosts about the legal requirement for Airbnb Ireland to report host earnings to the Office of the Revenue Commissioners.

“This is a legal requirement for Airbnb Ireland, similar to our obligation to report host earnings in the US.

“The reporting requirement exists because on 1 May 2014, Ireland became Airbnb’s home base for all transactions outside the United States.”

The company also said that Revenue’s position that the “rent a room” relief scheme is not open to Airbnb hosts is open to challenge.

Speaking on RTE’s News at One, head of Airbnb Public Policy in Europe Patrick Robinson said the company believes this position is a misreading of the law.

He said this could be a matter for the courts but the company would not have the standing to bring a case itself and it would fall to Airbnb hosts to do so.

He pointed out that an equivalent scheme in the UK does apply to Airbnb hosts.