Airbnb escapes tax time crackdown, but mum & dad hosts left with a bill: Marshall Delves

Airbnb escapes tax time crackdown, but mum & dad hosts left with a bill: Marshall Delves
Airbnb escapes tax time crackdown, but mum & dad hosts left with a bill: Marshall Delves


Commercial short-stay companies like Airbnb will this year deprive the Victorian Government of more than $14 million in uncollected GST.

Airbnb, and similar operators, only collect GST on the 5 percent to 15 percent ‘service fee’, rather than the entire booking cost. This means the state misses out on up to 95 percent of the GST applicable under current legislation. But conversely – or perversely –, this year hosts will pick up an extra bill, with the Australian Tax Office signalling a tax crackdown on users of the app.

It’s hardly fair that Airbnb gets out of paying millions in GST, while mum and dad hosts who simply rent a room, are not only subject to income tax, but are actually being targeted by the tax office.

How on Earth can a person renting out a room in their house be considered to be running an income–producing business, while on the other hand the multinational rental company doesn’t have to pay its fair share?

Victorians are missing out on millions of dollars every year, while Airbnb’s profits continue to grow, and that’s where the focus should be.

Airbnb alone had 651,000 guests last year and grew at a rate of 116%. It’s only fair that legislation is updated to recognise the rise of this unregulated industry, so Airbnb pays its share, along with other overseas companies.

Airbnb admits other countries require the company to collect GST on the entire booking cost, so why isn’t it happening here?

The Federal Government should learn from those other countries and also require Airbnb to collect and pay its proper, fair share of GST in Australia, based on the booking fee, not just the service fee.

The industry also avoids commercial rates from being imposed by local Councils, by relying on their land use activity being classified as a residential activity.

Come on – Airbnb is not a residential activity, it’s a business activity, and a loud, disruptive, unregulated and unfair one at that.

A Parliamentary Committee examining the commercial short-stay industry has heard a range of submissions, calling for Airbnb, and similar overseas companies, to pay GST and other taxes.

The Committee has also made a series of recommendations to the Victorian Government, including that it:

• Considers that the current proposed legislation is unfair to residents and should be reworked.
• Works with Victoria Police to examine safety issues in residential complexes with short-stay activity.
• Works with Victoria Police to consider establishing protocols to manage violent and disruptive incidents.
• Reviews the regulatory imbalance between the short-stay and traditional accommodation sectors.
• Investigates costs and benefits of introducing a registration and compliance framework for commercialresidential short-stay accommodation (where properties are listed as short-stays for more than 90 days).

We Live Here is a growing movement of residents from across Victoria, dealing with significant detrimental impacts due to the rapid, unregulated rise of the commercial short stay industry.

The concerns relate to safety and security, higher maintenance costs due to increased wear and tear, and disruption through ‘party houses’.

We have been encouraged by the level of support we are receiving across the state, from people who share our concerns

Residents from more than 200 buildings have joined We Live Here, along with locals from suburbs, and towns, across the state.

Clearly, the government needs to act on these concerns and bring legislation into line for this massive industry. We need a solution which puts residents, businesses and the tourism industry on a level playing field.

Ensuring these giant overseas companies pay their fair share of tax on the millions they make in Victoria, is just one of many issues that require urgent attention, when it comes to the commercial short-stay industry.

Marshall Delves is from We Live Here.

Melbourne Airbnb


Be the first one to comment on this article
What would you like to say about this project?