The government is considering tax policies that will increase taxes for those who let Airbnb rooms. The government relaxed these tax policies in 1992 to incentivize renting. The government would alter the Rent A Room system to only give tax preferences to those who rent a room, not entire properties. This is because those who rent an entire property tend to generate more income. Airbnb has been clear that the relief is intended for those who rent a room, not an entire property.
Key Takeaways:
- If the government has its way, Airbnb and similar companies will be paying higher taxes than they do right now.
- If it is passed, the government will only offer tax relief to those that rent out one room or a portion of a property.
- Those that rent out entire properties for higher rental rates will be taxed accordingly as if they are a business.
“However, in its response to a consultation document on the Rent A Room system it appears the government is to offer the tax relief only if part of a property is let – not the entire property, as is often the case in modern internet-booked short lets.”
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