Around $9 billion in government tax revenue is being lost each financial year by accidental and deliberate errors and rorts by individuals operating short-term rentals, it has been suggested.
The sector is currently under intense scrutiny by the Australian Tax Office (ATO), with platforms such as Airbnb in the process of releasing data on its host properties for the purposes of data matching income from short-term rentals against that declared on an individual’s tax returns.
According to some reports, property owners are failing to declare incomes of more than AUD$70,000 generated from short-term letting of rooms or whole properties on online platforms.
Tourism Accommodation Association CEO, Michael Johnson, said the scale of the suggested irregularities was “deeply troubling”.
“This is not some benign leakage from the tax system that can be overlooked – this is a significant issue with considerable implications for all Australians.
“In cases where hosts earning over $70,000 are under-declaring or failing to declare their rental income altogether, this robs Australians in several ways – jobs in the traditional accommodation sector are sacrificed, tax that would have been generated by accommodation hotels is foregone and this cost is borne directly by the Australian people,” Johnson added.
The TAA CEO also called on Airbnb to open its own books on how much corporate tax it pays in Australia following a recent valuation listing the company as worth $38 billion worldwide.