A Queenstown accountant believes at least a quarter of local Airbnb-type property owners are dodging taxes.
“I think it’s at least 25 or 30 per cent, if not higher,” Tax Central’s Murray McClennan says.
The problem’s exacerbated, he believes, by the recent increase in short-term letting – as of October 1, Airbnb had more than 2500 active Queenstown listings.
McClennan points out all net rental income, less expenses, is subject to income tax.
GST registration’s also required once gross rental from short-term accommodation exceeds $60,000 in a 12-month period, he says.
McClennan’s heard, second-hand, of an out-of-town accountant advising a local client to treat Airbnb clients as boarders to avoid paying tax, “which is bullshit”.
“The people who [dodge tax], I couldn’t sleep at night, but other people can.”
He warns Airbnb property owners that there’s no time bar – people are liable for every year’s tax they avoid – and that it wouldn’t be hard for Inland Revenue to identify those in the business.
Airbnb’s Australia & NZ public affairs manager Julian Crowley says it’s “always reminded our hosts to declare their income and pay their taxes”.
It gives hosts an annual summary of their earnings, while they can also check and print out their transaction history at any time, he adds.
A typical local Airbnb host, he says, earns $278 a week or $14,500 a year in extra income.
“Deloitte found Airbnb contributed more than $88.6 million to Queenstown’s economy and supported more than 713 full-time local jobs.”
Crowley argues Airbnb’s been “an economic lifeline” for many locals and families at a time when the cost of living is high.
Meanwhile, Inland Revenue wasn’t able to respond by deadline.