ATO sends letters to AirBnb renters over debts due on October 31 – and it’s going to cost you more on your holiday rental
- The Australian Tax Office will notify AirBnb users who have not declared income
- Those found not to have included the income could be audited and face fines
- Australians have until November 25 to amend their already lodged tax returns
- It is suspected the crackdown could result in a price increase on AirBnb
Letters are being sent to AirBnb renters because of tax debts due on October 31.
The government tweeted a warning on Monday urging people to include their income earned in services such as Airbnb, Stayz or FlipKey in their upcoming tax return.
The ATO said in a statement the letters will be sent out this week and over the next 12 months.
Australia Tax Office will began sending out letters over the next 12 months to warn those who have lodged an incorrect statement without AirBnb income to amend it
‘The objective is to identify and educate those individuals to ensure they include the correct amount of rental income from these sources in their returns and pay the appropriate tax,’ it wrote.
‘This will ensure there is a level playing field for all people operating accommodation services in the community.’
Earlier this month an email was sent out by AirBnb to warn customers their details were being shared with the ATO as apart of the crackdown on additional income sources such as AirBnb, Uber and Airtasker.
‘Airbnb is currently under legal notice by the Australian Taxation Office (ATO) to share information concerning your hosting activity for the period from 1 January to 30 June 2019,’ it wrote according to news.com.au.
The ATO tweeted a warning on Monday urging people to include their rental income in their tax return
It added the investigation was apart of the ATO data-matching program ‘which requires sharing economy rental platforms to share information concerning their users, including, for example: name, address and telephone number’,’ it wrote.
It is believed this crack down will cost users of the site more as the now ‘educated’ hosts of the site increase prices to offset the cost of taxes.
Michael Johnson, Chief Executive for Tourism Accommodation Australia previously said the increases as a result of from crackdown would help clear up the economy’s accommodation sector.
If people fail to include update their tax returns with the additional income they could be audited and face serious fines
He said property owners who had successfully declared their income tax wouldn’t have to worry.
‘This will significantly improve transparency and increase equity between traditional tax-paying accommodation providers and the largely unregulated short-stay accommodation sector,’ Mr Johnson said.
The letter sent out to those suspected of not declaring the income will give people until November 25th to update their already lodged return through MyGov through this will incur a late fee,
It is believed this crack down will cost buyers more in the long run as the now ‘educated’ users of the site increase prices to accommodate for the offset in taxes (stock image)
Australian’s have less than a week to get in their completed tax returns by October 31st but can lodge it as late as May 15 next year if going through an accountant.
If the ATO finds that a person’s listed income is inconsistent with records they have found people could be audited and forced to pay back what they owe plus heavy fines.
AirBnb argued in a statement the company wanted to help their users to follow taxation laws but argued the current process can be difficult for people to do so.