ON THE ISSUE OF TAXATION…AIRBNB & ITS COMMERCIAL OPERATORS
The use of residential housing as short-term tourist/visitor rentals is a prohibited use. In NSW, this is a well-documented legal position. With Agents aplenty offering hundreds of homes each, Airbnb doesn’t even bother these days with its ‘home sharing’ mantra. Instead, Airbnb gladly hops on the publicity bandwagon with corporate agents such as MadeComfy (297 listings), Luxico (129 listings), L’Abode (196 listings)… And regrettably, the list goes on and on.
Airbnb and Stayz landlords no longer talk of ‘home sharing’. Instead they write of their ‘professional activity’ and ‘businesses’, while listing and synchronising their illegal hotel/serviced apartment operations across multiple online platforms. And while some write that they declare their income to the Australian Tax Office, many more still laugh off this requirement. One more question: How many of those using residential housing for commercial Airbnb/Stayz/other STR purposes are paying a commercial rate on home loan borrowings? We estimate that none of them are. Not so for accredited Bed & Breakfast operators, whose mortgages are calculated and charged at a higher, commercial rate.
Federal Capital Gains tax and GST, State Land Tax, and Local Rates and Charges…online platforms actively mislead authorities and impede official efforts when it comes to ascertaining the true location and the identity of those using these platforms. And Airbnb for one is lobbying hard against any kind of register covering its commercial landlords.
The persistent problem of Airbnb’s efforts in regards to taxation avoidance was well documented in an Australian Federal Government Senate Inquiry. Here is just one of the many memorable quotes from the Senate Committee:
“The audacity of certain multinationals in refusing to comply with legitimate and reasonable requests for information raises suspicions that they have something to hide. The unwillingness of many multinationals to discuss openly their tax arrangements underscores the need to establish mechanisms to increase transparency.
The nature of the digital economy provides opportunities for aggressive tax minimisation by allowing multinationals, such as…Airbnb, to deliver services using software platforms that can be located on the other side of the world. For example, Uber and Airbnb, based in the Netherlands and Ireland respectively, provide a platform for the exchange of services between Australians in Australia; yet the financial transactions associated with these services are undertaken in offshore jurisdictions and the Australian subsidiaries are reimbursed for expenses with a margin added on."
A subsequent report commissioned by Airbnb and Expedia/Stayz touted $1.6 billion in revenue generation and 14,000 jobs created by them. The 14,000 jobs should surely see Legislators calling for evidence of payroll tax being paid by Airbnb and Co, or for that matter, whether they have paid any tax at all in Australia. We are unlikely to see this evidence as it probably doesn’t exist, plus MPs profiting themselves from short-term rentals have no desire for real transparency.
What this increase in advocacy and the commissioning of a self-serving report does demonstrate is that Airbnb, Stayz and others are utilising residential homes – well in excess of 216,000, according to our State Government - as quasi-hotels, while having zero regard for the proprietary rights of neighbouring Residents and accredited Accommodation Providers, or for compliance with our Taxation system. Where please is the widespread Media reporting on this issue?
Homes not Hotels Communities not Transit Zones
People before Profits Neighbours not Strangers