Airbnb hosts warned on need to file tax returns
Thousands of homeowners will have to file a tax return for the first time because of money they earned from being Airbnb hosts.
They have been warned that they have to declare their extra income by the end of the month.
There are steep penalties for those who do not file a return or are late filing it.
It is estimated that up to 2,200 homeowners will have to pay and file a tax return for the first time because of the extra income they are getting for using the online service.
Senior tax manager with Taxback.com Barry Flanagan said: "Revenue has stated clearly that any income earned through renting out your room or apartment or home through Airbnb will be treated as taxable income and must be declared."
He said the deadline for filing a tax return for anyone who rented out their property in this way in 2014 is October 31. Those who file online have until November 12.
Airbnb has been warning its users that it is legally obliged "to provide certain information to the Office of the Revenue Commissioners".
Mr Flanagan of Taxback.com estimates that around 2,200 homeowners will now be drawn into the self-assessment tax system for the first time because they are getting income through Airbnb.
He said: "According to recent reports, approximately 4,500 properties in Ireland are available to rent on Airbnb and we believe that up to half of these may be new to renting their properties and therefore probably new to the self-assessment requirement." He said it could take time to get the necessary documentation in order and warned people to start the process now.
Early this year, Revenue published guidelines on its rent-a-room scheme, which allows people to earn up to €12,000 tax-free a year. This scheme does not apply to Airbnb hosts.
A spokeswoman for Revenue said it was aware of the provision of rooms by householders through online accommodation sites, such as Airbnb.
"As has always been the case, income derived from such activity is subject to tax and the amount of taxable income is computed and charged to tax in the normal manner," she said.
Rent-a-room relief would not apply to the income unless the room or rooms were used for the purposes of residential accommodation - where the occupants are effectively using the rooms on a long-term basis, either on its own or in conjunction with other parts of the residence, as a home.
"Income from the provision of accommodation to occasional visitors for short periods would not qualify for rent-a-room relief as the visitors use the accommodation as guest accommodation, rather than for residential purposes," the spokesperson added.
However, Revenue said that where people get income from being occasional Airbnb hosts, then they can deduct expenses for the cost of providing meals, light or heat when computing the taxable profits.