Airbnb Tax Ireland: Understanding Your Tax Obligations as an Airbnb Host

As Airbnb has become an increasingly popular accommodation option for travellers worldwide, it has also opened up new opportunities for property owners to generate additional income by renting out their spaces to guests. However, it’s crucial for Airbnb hosts in Ireland to understand their tax obligations to ensure compliance and avoid potential penalties.

Airbnb Income and Tax Implications

If you’re an Airbnb host or have been in the past, you need to be aware that Airbnb has announced they are legally required to inform the Revenue Commissioners with details of Irish homeowner’s income derived from them.

Previously, many Airbnb hosts believed these monies were not subject to tax, as they believed they were entitled to the Rent a Room Relief tax exemption (which is a €14,000 tax free threshold for those letting rooms to the same person for 28 consecutive days.)

However, Revenue have clarified that short-term lets to guests including where such accommodation is provided through online accommodation booking sites, do not fall within the terms of Rent a Room Relief.

Understanding the Distinction Between Rental Income and Trading Income

The income from Airbnb is considered trading income rather than rental income for tax purposes. Rental income is deemed passive income, whereas Airbnb income is deemed trading income.  This distinction is significant because trading income is subject to higher tax deductions and allowances compared to rental income.  The main points of difference between these two incomes from a tax perspective are as follows:

Positives of Short-Term Lettings 

  • Airbnb is trading income, so there is more scope for using expenses that are wholly and exclusively related to that trade.
  • As a trade, Airbnb income is eligible for the Earned Income Tax Credit worth €1,875 in 2024. However, if you are in full-time employment, you are most likely already receiving the Employee Tax Credit, also worth €1,875. Unfortunately, you cannot claim both the Employee Tax Credit and the Earned Income Tax Credit at the same time.
  • As a trade income instead of passive income, the earnings from Airbnb can be used in calculating your annual pension contribution threshold should you wish to make a tax-deductible payment to your pension.

Negatives of Short-Term Lettings 

  • Landlords who have Airbnb income are not eligible to claim the newly introduced tax breaks for landlords. This relief is worth €600 in 2024 and will rise to €1,000 in 2026.
  • If you are an Airbnb host who is a tax resident in Ireland and your Airbnb income exceeds €40,000, you are obliged to register and charge VAT at 13.5%. Naturally, VAT can also be claimed on expenses, but the obligation to register and file VAT returns is a further responsibility.
  • If you are a Non-Resident Airbnb host, you are obliged to register and charge VAT on all income, VAT thresholds do not apply.
  • If you rent out a section of your Principal Private Residence (PPR) via Airbnb for a prolonged period, it can be argued that this section of your property effectively becomes a commercial space. This means that should you sell the property at a gain, this section of the house is liable for Capital Gains Tax (CGT) and cannot avail of PPR Relief.
  • You must notify your local authority if you share your PPR for more than 90 days via Airbnb per year or ‘let out’ an investment property.  Your Local Authority may then impose a commercial rate levy on your property.

Reporting Airbnb Income on Your Tax Return

All Airbnb hosts in Ireland, regardless of their income level, are legally obligated to declare their Airbnb income on their annual Income Tax Return. Failing to report your Airbnb income can result in penalties and fines.

 Filing Procedures for Airbnb Income In Ireland

Those earning income from Airbnb are required to register for Income Tax and file a Form 11 tax return annually.  Tax Return Plus can advise you on filing a Form 11 tax return.

Allowable Expenses for Airbnb Hosts

As an Airbnb host, you can offset certain expenses against your Airbnb income to reduce your taxable income. These allowable expenses may include:

  • Cleaning costs
  • Linen and towels
  • Utilities
  • Property repairs & maintenance
  • Marketing and advertising
  • Accountancy Fees
  • Commission fees paid to Airbnb

Allowable expenses can be off-set against Airbnb income so therefore, hosts are advised to retain all receipts in relation to expenses incurred through the activity of being an Airbnb host.

Filing Airbnb Income Tax in Ireland: What Do Hosts Need to Know?

If this is your first time filing tax on Airbnb income, here are the basic details you need to know:

  • If you receive additional income from hosting via Airbnb or any other platform it is your responsibility to declare this income to the Revenue Commissioners.
  • Airbnb Income is considered trading income rather than rental income and so should be detailed under this section.
  • The deadline for filing your Income Tax Return in Ireland is typically October 31st each year. It’s essential to file your return on time to avoid penalties and ensure you meet your tax obligations.

Seeking Professional Tax Guidance on Declaring Airbnb Income

Navigating the intricacies of Airbnb tax laws and regulations in Ireland can be daunting, especially for those new to Airbnb hosting. Considering the complexities involved, it’s highly recommended to seek professional tax advice from a qualified tax advisor who can provide tailored guidance, ensure compliance, and assist in filing your Income Tax Return accurately and efficiently.

Need Help Filing Your Airbnb Tax in Ireland?

As an Airbnb host, understanding your tax obligations is crucial for maintaining compliance, avoiding penalties, and maximising your earnings. By following these guidelines and seeking professional tax advice when needed, you can ensure a smooth and stress-free tax experience. 

At Tax Returns Plus, we understand the challenges faced by Airbnb hosts in Ireland. Our team of experienced tax professionals is dedicated to providing comprehensive tax advice and assistance, helping you navigate the tax landscape with confidence.

For more tax advice, or for help in filing your income tax return, contact our expert team today.

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