Last night.
The Watermarque Building, Bridge Street, Dublin 4.
A meeting for people who may owe tax on income earned by renting rooms and properties through the website. Airbnb at the website’s Dublin HQ.
Airbnb has been contacting hosts warning them that it may legally obliged to provide certain information to the Revenue Commissioners. Thousands of users in Ireland could now be billed for tax dating back to at least the middle of last year although this is disputed in an Airbnb-commissioned report [at link below].
Hot staff, in fairness.
Yesterday: Keep Your Air On
(Sam Boal/Photocall Ireland)
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Would love to know how much the Hotels and BnB groups lobbied revenue for them to take this position. What ever happened to Ireland being the home of innovation? Probably only allowed as long as you don’t piss off any established industries so they don’t have to rethink business models and you know…… innovate?
It’s income.
It’s taxable.
End of story.
It wasnt specified in the terms and conditions that the company would share your private personal information with a third party, so there’s a data protection issue here to be resolved before any one gets taxed on income.
Also the income is only taxable if its over €12,000 PA
so your story wasn’t quite accurate.
over 12k!? Rubbish. That’s the rent a room scheme, which was clearly designed to increase accommodation supply etc. Not for chancers to make a few quid from tourists
how do you know they were tourists? How long does a stay need need to be before it’s considered accommodation?
It was specified, actually. Problem is that people rarely read the reams of text when clicking ‘I agree’ when they’re signing up to something, especially when they see €€€ ahead of them.
And €12k is irrelevant. You’re confused.
I’m afraid my dear boy I am not confused.
You can earn up to €12k a year that is not taxed as income by renting a room out to a person on a short, long, medium, medium-long term lease. It doesn’t matter if you use air b&b, Craigslist,tinder or an ad in the local newspaper to advertise it. It doesn’t matter if the person is Irish, a Spanish student or an Eskimo doctor, as long as you tell revenue that you earned less than €12k from these guests in your home you aren’t taxed on it.
As for the terms and conditions, I didn’t in fact read them all prior to making that comment, I don’t have the luxury of that amount of time, but unless they say that they will pass your information to revenue to tax purposes on the t&c’s then they can’t. No matter what revenue “compel” them to do.
Sorry, Brian but, with all due respects, you haven’t a clue what you’re talking about. The 12k allowance is afforded to people who rent out a room under the Rent a Room Scheme. And that is confined to “permanent residential accommodation” and explicitly excludes short-term rentals like Airbnb. Go and read it, kiddo, before making noise.
There’s a report from some reputable tax consultants on this very website that states that the legislation is vague enough to be applied to short term lettings such as air bnb.
It’s a moot point though until someone can show that their t&c’s stated that customer data could be passed to a third party or government department.
Wrong, Brian.The 12K allowance is for long term lets only.
Has Brian gone all Keyser Soze on us?
That’s not even what the EY opinion states, Brian. It says there’s some flicker of hope to argue on a technical point – that “residential” wasn’t clearly defined, so it **could** mean tourists on their holidays. Airbnb obviously went to EY and asked them to come up with something…anything. And this is what they came up with. Airbnb have already said that they’re not going to be pursuing this on behalf of users. They don’t even believe it themselves.
Look, end of the day, nobody likes paying tax. We all have to, though. If [redacted] was up this kind of bullsh1t, trying to evade tax on a point of technicality, we would all be rightly outraged. It’s income, it’s taxable. Pay it.
Air bnb are never going to take a test case on customers behalf. It’s up to the customer to take it to revenue themselves. The law can only be applied as written, and if it is written badly with room to interpret then it can be challenged.
Fair enough, but I think “permanent residential accommodation” is pretty clear.
“It’s income, it’s taxable, pay it” is a very black and white view of it. I bet you said similar about the water charge (tax) were you one of the “oh well it’s been passed as law,better bend over and take it again”
No, because there are obvious objections to the water charge. There are no obvious objections to this.
A loophole is a loophole. It’s irrelevant whether you think it moral or not, if the law hasn’t been drafted to include the Airbnb scenario, then that’s just too bad, and it will have to be changed. Rolling those dice will cost money though.
The fact that Airbnb isn’t taking the case themselves is irrelevant. They may not even have standing to bring it – after all, it doesn’t affect their tax liabilities.
Thing is, Caroline, it’s not a loophole. It’s a misinterpretation. You’re right, though, I do think it’s sh1t that people are trying whatever they can to evade tax. We’re all paying through the nose on everything we earn.
Call it what you like. The courts will decide if it’s a misinterpretation – if a case is taken.
And unless it is, everyone will have to cough up. They’re all on notice now that they owe the tax. There’s no data protection issue with Airbnb handing over their information.
Caroline, how long have you been hosting? Did you host at all before 2014?
I’ve never hosted. I have used Airbnb as a guest in a few cities over the years. If it matters – which it absolutely doesn’t – I am fully behind the idea that any income from hosting should be subject to tax at the appropriate rate. All I’m doing is pointing out how the law works.
All income is subject to tax – except when it isn’t. It’s for legislators to state with absolute clarity what category each portion of your income falls into.
My bet is that this case won’t be taken by anyone, because no one operating otherwise legitimately will have made enough money for it to be worth their while gaining an exemption for the period in question. If there’s any sniff of a lacuna going forward then Revenue will have it pasted over asap.
Okay, take your point (ish). If we’re talking about the same thing, that’s not how the law works. For one, ignorance is no defense. All I’ve heard from non-tax-paying hosts so far is variations of “I didn’t know” / “Nobody told me” / “I was told…”. And it’s all sh1te. It’s classic Irish chance-your-arm-and-see-what-happens. And the other argument of “ah sure, it’s only a few quid to help make ends meet” is offensive. There are people.on minimum wage (who couldn’t even dream of having a surplus bedroom to rent out to tourists) who are paying their tax. It’s unfair to them. And I resent it. (And for the record, I’ve been renting a space on Airbnb for 3 years and have declared every cent of it and paid tax. It pi $$es me off that others (like me) are trying to get put of it. Pay.)
Just to be clear: there is no question of ignorance as a defence. Right now, as things stand, there is a tax liability for everyone. The only way this could change is if a case were to be brought and the interpretation of the legislation by Revenue successfully challenged.
If and only if this were to happen, there would as a result be no liability (depending on the court’s exact ruling) until amending legislation was brought in to fill the gap.
Because the sums of money made by most (legitimate) hosts were relatively small compared to the costs of mounting a High Court challenge, and because even a successful challenge would only cover a very short period of time before amending legislation would be brought in, I think a challenge is unlikely. But who knows.
On a Dublin Airbnb forum, a Dublin host has just posted (cut and paste) an email that he was sent by Airbnb in March 2015, responding to a request for clarification on the tax issue. In it, Airbnb very explicitly tell him.tjat he’s coveted by the Rent a Room Relief Scheme. Bizarre. I wonder would he have a legal case against Airbnb (and anyone else who might have received similar information).
covered, not coveted
Ugh, what a mess. I know it’s ridiculous to rely on reassurances from a company with no expertise in tax law, but you would have to feel for someone who bothered their hole and thought they had gotten the right information. But at that stage hadn’t the Revenue already issued its statement? Again, the sums involved are too small for there to be any realistic recourse against Airbnb. It’s not like an accountant who you are expected to be able to rely on as a lay person in respect of tax matters.
but a lodger goes tax free ?
not exactly end – of !
Wrong Custo. The law is so vague that it’s ripe for a court challenge. For example, no definition of “short stay”, no allowances against expenses.
And it’s impossible to find the actual legislation, all that seems to exist is revenue guidlines which aren’t worth jack poop.
I think you’ll find they’re worth a little bit more than “jack poop”
Where was the innovation?
I’s day a fair number of B&Bs have been running this and squirreling away the income, squeaky bum time is right now.
Probably about as hard as the landlords’ groups lobbied for them not to make this ruling. A very great many of those renting via Airbnb are large scale professional landlords who took their properties out of the standard rental market in order to do so, largely to avoid tax. So not only was tax being avoided, but the already desperate situation in the private rental market in Dublin was being further distorted. This decision, if upheld, might result in the release of apartments back into the long term rental market, where they’re needed.
Surprisingly, I haven’t seen that point raised all that much, Ms Piggy. I know a couple who were on the verge of taking a place when the landlord suddenly decided he’d prefer to let it through Airbnb.
Sorry about the whole Kermit thing btw…
Check out what’s happening in Barcelona, what happened in Berlin last year too. It’s become so easy to make a lot of money from short term rentals instead of housing actual residents of the city, that housing stock is being cannibalised. It’s a real problem.
I’ve actually contributed to the problem in Barcelona in the past.
I’m bearing up as well as can be expected, thanks Mick :-)
He’s not worth it the little toad.
“A very great many of those renting via Airbnb are large scale professional landlords”, sez you. Proof please?
The number of rented peoperties with PRTB hasn’t decreased so Ms Piggy did you get these stats from a dark orifice?
Would large scale professional landlords have avilaed of the 12k rent-a-room scheme anyway?
Surely there is a difference between occasionally renting a room in your primary residence and renting out a series of other buildings?
but that’s the point – those landlords were definitely liable for tax on long-term rentals but by switching to AirBnB felt they could avail of the so-called tax loophole.
You’ve just made that up. Silly.
Wow short term rentals! So innovative!!
Just pay your proper taxes and shut up.
Irish people love to whinge about multinationals and tax. The same goons abuse the rent a room scheme, claimed the SSIA while living abroad etc etc
I cannot believe that anyone would have a problem with people being charged tax on income, especially when that income is at the expense of other businesses and people who actually live in the city who’s potential home is being rented out to tourists.
Ask them in San Francisco what they think about Air BnB and how it is making a housing crisis even worse.
shortage of hotel rooms in Dublin and why can’t we innovate when new technology comes along ?
Nothing there to stop people innovating but innovation doesn’t excuse people from paying tax
Yep.
And see as it’s self-declared liability, most would have been paying around €11
Innovation in tax evasion.
Shortage in hotel rooms?
Are we talking about Abbeyleix or something?
And it’s ok for the tourism industry to accept that government are raping private penison funds so they can be propped up with thier exhorbitant costs?
AirBnb do not have to notify anybody of their duty to pay their fair share of tax to the state. If you earn money then there is a good chance that it will be legally subject to taxation.
except for the hundreds of allowances,exemptions,credits,schemes etc.
To the tune of Haribo
“Revenue love their taxes paid , Revenue love Harbo”
Im not even getting tired of this…
Nothing to suggest Harbo didn’t pay tax on his Airbnb income. I’d be pretty sure he has a good accountant, so he probably did declare it and pay tax on it. Only idiots thought they’d get away with this.
Im just kidding of course before he goes all DOB ;)
The Rent a Room scheme legislation explicitly states that the homeowner must be an occupier of the premises (your PPR) at the time of renting a room. Not moving out to let the entire place.
Homeowners who move out and let a property to a tenant are considered landlords for taxation purposes. Upon audit by Revenue, therefore, letting out your entire place erroneously under ‘rent a room’ scheme can (theoretically at least) also lead to claw-back of a first-time buyer’s Mortgage Interest Relief payment as well as taxation on income. What the legislation isn’t explicit on is the classified duration of rental – that’s a bit vague.
Anyway, worst case scenario, those who let out their entire home to strangers are most exposed to tax. Those who let someone move into a room in their home while they remain living there might have a loophole if Revenue accepts the rent a room scheme applies in any cases. As I understand it (though I could be wrong) the most likely to be stung are those who have incurred real profit from their Airbnb rental. And if you’re going to be taxed for income, once you’ve written off certain property-related items – maintenance etc – it’ shouldn’t hurt that badly for most people.
Also, many Irish Airbnb properties also show up on sites like VRBO.com – will Revenue go after those sites too?
“f you’re going to be taxed for income, once you’ve written off certain property-related items – maintenance etc – it’ shouldn’t hurt that badly for most people. ”
I’d say it won’t hurt that badly at all.
http://www.revenue.ie/en/tax/it/leaflets/it70.html
A Revenue Guide to Rental Income – IT 70
What Expenditure Can Be Deducted?
so much guff about corporations and water charges but look at the little greedy maggots crying poor mouth after blatantly and knowingly breaking the law, hope they ride you all the way.
Yep. Classic cute hoorism. I hope Revenue fupping hammer them.
On the other side of things the AirBnB logo looks quite dirty.
When I saw it first I thought it was something to do with childbirth.
A mickey and testicles, no?
A woman squeezing out a bairn, no?
In fairness, those staff can rent a room at my place any time they like, if you know what I mean (and I really don’t know how you couldn’t)
It’s one those places where the staff think it’s so cool how much stuff their employers lay on their them, like weekend activities, company outings, free canteen, beer Fridays.
And all the while they are being indoctrinated into the corporate culture, moulded as required and spending most of their time within the confines of the company.
I passed by there Halloween two years ago and they were having a big party (at 9pm). And all I thought was how utterly sad that these people party in their workplace when they should all be out doing their own thing.
Controlling.
Also..
http://www.revenue.ie/en/tax/it/leaflets/it70.html#section11
Rent-a-Room Relief
http://www.revenue.ie/en/tax/it/leaflets/it70.html#section11
The room or rooms must be used for the purposes of residential accommodation, i.e. the occupant is using the room, either on its own or in conjunction with other parts of the residence, as a home. The relief does not apply to rooms that are used for the provision of accommodation to occasional visitors for short periods, including, for example, where the accommodation is provided through online accommodation booking sites.