Renting out your house (or part of it) on Airbnb?

With the Commonwealth Games coming up for the Gold Coast, some locals have chosen to rent out part or all of their house to visitors using Airbnb and other online platforms.  If you are renting out your house (or part of it) even for a short period of time, there are tax and other consequences you need to consider.

 

Tax consequences

If you are renting out your home (or a part of it), any income earned will need to be declared as assessable income in your tax return.  You may also be eligible to claim a proportion of the expenses for the property.

You will need to keep all of your receipts and records showing:

  • Total income earned for the property; and

  • Total expenses for the property (eg. rates, interest, insurance, cleaning, internet, repairs, fees charged by Airbnb or other rental platform).

If you only rented out a part of your house (eg. one room) you can only claim the expenses relating that proportion of the house plus a share of common areas (eg. bathrooms).  These costs are generally apportioned on the basis of floor area – so you will need a floor plan for your property showing the total area and the area of the relevant rooms.

If you are earning income from your property, there may also be capital gains tax implications for your property when you sell it.  You should seek advice regarding the capital gains tax implications before renting out your property.

 

Other consequences

You should check your insurance policy and make sure that the policy covers you if a tenant is injured on your property or your property is damaged or stolen by a tenant.

You should also review your local council regulations to ensure that short term letting is permissible in your local area.  You may also be required to notify your local council that you are renting out your property.

If you are already renting your property, you need to check your lease to see whether a sub-lease is permissible.

If you would like to discuss the tax implications of renting out your property, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

SMSF and cryptocurrencies

The ATO have recently released guidance for self-managed superannuation funds (SMSFs) investing in cryptocurrencies.  To invest in crytocurrencies, the investment must be allowed under the SMSF trust deed and be in accordance with the investment strategy.

When an SMSF acquires and disposes of cryptocurrency, it faces the same taxation and regulatory issues that apply to all other investments.  Please see our earlier article regarding the tax implications of investing in cryptocurrencies.

Below we have highlighted some of the key issues for SMSFs when investing in cryptocurrencies:

 

Investment ownership

Trustees need to ensure that the SMSF has clear ownership of the cryptocurrency (ie.  there must be evidence of a separate cryptocurrency wallet for the SMSF).  The SMSF wallet must be managed separately from the personal and business cryptocurrency investments of the trustees and members.

 

Valuation

The cryptocurrency will need to be reported at market value at 30 June.  The ATO have advised that they will accept the 30 June closing value published on the website of a cryptocurrency exchange that reports on historical cryptocurrency values.

 

Related party transactions

Subject to certain exceptions, an SMSF is prohibited from acquiring assets from related parties (eg. from members).  Cryptocurrencies do not fall within any of the exceptions.  As such, an SMSF cannot acquire cryptocurrencies from trustees or members.

We recommend that you seek independent financial advice when determining whether investing in cryptocurrency is appropriate for your SMSF.

Please do not hesitate to call us on (07) 56656469 if you would like to discuss the tax and regulatory implications of investing in cryptocurrency in your SMSF.

 

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Single Touch Payroll

From 1 July 2018, employers with more than 20 employees will need to start reporting to the ATO using Single Touch Payroll.  Employers will need to report, salary, wages, PAYG withholding and superannuation to the ATO at the time you pay your employees.

On 1 April 2018 employers need to take a headcount of your employees.  You do not need to advise the ATO of the number of employees as at 1 April 2018, this is just a method of determining whether your business will be required to report under Single Touch Payroll Reporting.  If you have more than 20 employees as at 1 April 2018, you will be required to use Single Touch Payroll Reporting from 1 July 2018.  Once you start reporting using Single Touch Payroll Reporting, you will continue to report even if your employee numbers drop below 20.  Most software systems should be capable of enabling you to report the pay information to the ATO using Single Touch Payroll.

 

What you need to do

  • If you have more than 20 employees as at 1 April 2018, check the ability of your software to report your pay information to the ATO every pay period.  Review your available options if your current software does not support Single Touch Payroll Reporting.

 

Available resources

The ATO have released resources for employers and are currently running free webinars to assist employers with their compliance:

Please do not hesitate to contact us on (07) 56656469 if you would like assistance with understanding your obligations under Single Touch Payroll Reporting.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,