- GST on Airbnb incomeNone — input-taxed
- ABN requiredGenerally no
- Victoria short stay levy7.5% from 1 Jan 2025
- ACT short stay levy5% from 1 Jul 2025
- ATO platform reportingActive since 2024
- Records required5 years minimum
Hosting on Airbnb, Stayz, or any short-term rental platform in Australia puts you squarely in the ATO's sights. The good news: the tax rules are straightforward once you understand them, and there are significant deductions available to reduce what you owe. The bad news: the ATO now receives your Airbnb earnings data directly from the platform — so there's no hiding it.
This guide covers everything Australian Airbnb hosts need to know for the 2025–26 financial year, including the new Victoria and ACT short stay levies that caught many hosts off guard.
Do I Need to Declare Airbnb Income?
Yes — every dollar of Airbnb income is assessable income that must be declared in your annual tax return. This applies whether you rent out a spare room, your entire home while you're away, or a dedicated investment property. There is no minimum threshold — even one night's income must be declared.
Airbnb income is treated as rental income, not business income. This means it goes in the rental income section of your tax return, not the business income section — an important distinction that affects how deductions are calculated.
Do I Need an ABN or GST Registration?
For most Airbnb hosts, the answer to both is no. Here's why:
- ABN: You don't need an ABN unless you're running your property like a hotel or serviced apartment with additional services (daily cleaning, meals, concierge). A standard Airbnb is residential rental activity, not a business.
- GST: Residential rent — including short-term Airbnb rentals — is input-taxed. This means no GST applies to your rental income, even if you earn more than the $75,000 GST threshold — and unlike most side hustles, you are not required to register even above this amount. This is different from most other side hustles. The trade-off is that you also cannot claim GST credits on your expenses.
The New State Short Stay Levies (2025)
Two states introduced new levies in 2025 that every Airbnb host must know about:
| State | Levy | From | Applies To |
|---|---|---|---|
| Victoria | 7.5% | 1 Jan 2025 | Stays under 28 nights |
| ACT | 5% | 1 Jul 2025 | Stays under 28 nights |
| NSW | None | — | — |
| QLD | None | — | — |
| WA | None | — | — |
| SA, TAS, NT | None | — | — |
How Is Airbnb Income Taxed?
Your Airbnb profit (income minus deductions) is added to your other income — salary, investments, other side hustle income — and taxed at your marginal rate. There is no special Airbnb tax rate.
If you also have a day job, your Airbnb profit sits on top of your salary and is taxed at your highest marginal rate — typically 30–45% depending on your total income.
What Can I Claim as a Deduction?
This is where Airbnb hosting can be very tax efficient. The key rule: you can only claim expenses for the portion of time and space your property is used for Airbnb — not personal use.
For a Whole Property Rented Out
If you rent your entire property on Airbnb (e.g. while you travel), you can claim the full cost of expenses for the days it was rented out, apportioned over the year.
For a Room or Partial Property
If you rent a spare room while living in the property, you apportion expenses based on floor area. If the rented room is 20% of your home's total floor space, you can claim 20% of shared expenses like mortgage interest, utilities, rates, and insurance.
| Expense | Deductible? | Notes |
|---|---|---|
| Mortgage interest | ✅ Yes | Apportioned by space/time — interest only, not principal |
| Council rates | ✅ Yes | Apportioned |
| Water rates | ✅ Yes | Apportioned |
| Building insurance | ✅ Yes | Apportioned |
| Cleaning costs | ✅ Yes | 100% if for the rented area between guests |
| Airbnb host service fees | ✅ Yes | 100% deductible |
| Repairs & maintenance | ✅ Yes | Fixes to existing items — not improvements |
| Linen & supplies | ✅ Yes | Items used exclusively for guests |
| Professional photography | ✅ Yes | For your listing photos |
| Depreciation | ✅ Yes | Furniture, appliances used by guests |
| Accountant fees | ✅ Yes | 100% deductible |
| Capital improvements | ❌ No | Adding value — claimed differently via depreciation/CGT |
| Personal use expenses | ❌ No | Your own use of the property is never deductible |
The CGT Trap — Your Main Residence Exemption
This is the most important tax issue for Airbnb hosts and the one most people don't think about until it's too late.
When you sell your home, the profit is normally exempt from Capital Gains Tax (CGT) under the main residence exemption. However, if you've used your home to earn Airbnb income, part of that CGT exemption is lost.
The reduction is calculated based on the proportion of time and floor space used for Airbnb. For example, if you rented a spare room for 3 years and that room represented 25% of your home, 25% of your capital gain for those 3 years may be taxable when you sell.
Worked Example: Spare Room Airbnb Host
Without tracking deductions, this host would pay tax on $21,600. With proper records, the taxable amount drops to $14,702 — saving approximately $2,550 in tax.
NSW Registration Requirements
If you're in NSW, all short-term rental accommodation (STRA) must be registered on the NSW Planning Portal. Unhosted stays in Greater Sydney are capped at 180 nights per year (60 days in Byron Shire). Registration costs $65 for the first year. This is a planning requirement separate from your tax obligations.
Quick Reference Summary
| Question | Answer |
|---|---|
| Must I declare Airbnb income? | ✅ Yes — all of it |
| Do I need an ABN? | Generally no |
| Do I need to register for GST? | No — residential rent is GST-exempt |
| Can I claim mortgage interest? | ✅ Yes — apportioned for rented area/time |
| Does Airbnb affect my CGT exemption? | ✅ Yes — keep records from day one |
| Victorian host short stay levy? | 7.5% collected by Airbnb from guests |
| Does ATO see my Airbnb earnings? | ✅ Yes — platform reporting since 2024 |
This article is for general informational purposes only and does not constitute tax or financial advice. Always verify with the ATO or a registered tax agent for advice specific to your situation. Short-term rental rules vary by state and council.
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