1. Do you pay tax on Airbnb income in New Zealand?

Yes. Inland Revenue treats short-stay and visitor accommodation as income you must declare. Its guidance on short-stay and visitor accommodation covers a room in your house, your whole house, another residential property such as an investment property, a cottage, caravan or sleep-out on your property, and a holiday home.

You need to keep records of all the income you earn and declare it in your income tax return, subject to some limited exemptions. You also need records of the expenses you claim.

Long-term tenancies, boarders and student accommodation are not short-stay accommodation and follow different rules.

2. How GST works on Airbnb bookings

2.1 The platform collects GST

From 1 April 2024, online marketplaces must collect GST at the standard 15% rate on short-stay and visitor accommodation booked through them, and pay it to Inland Revenue. Airbnb and similar platforms handle this on every booking made on their site.

2.2 The flat-rate credit

If you are not registered for GST, the marketplace passes 8.5% back to you as a flat-rate credit. Inland Revenue says the credit is yours to keep, and you can choose whether to include it as assessable income in your income tax return.

2.3 What you need to do

• Give each marketplace your name, IRD number and GST registration status, and tell them if it changes.
• Keep records of all your income and expenses.
• Register for GST if you earn, or will earn, more than NZ$60,000 in any 12-month period from all your taxable activities, including short-stay income.

Large GST-registered accommodation owners can opt out of the marketplace rules and handle GST themselves, if they meet the criteria.

3. GST registration and direct bookings

3.1 The NZ$60,000 threshold

Inland Revenue says renting out short-stay accommodation is a taxable activity. If your turnover from all GST activities is over NZ$60,000, you need to register for GST and file returns.

To work out your turnover, add up your total gross rental income, any business income and any income from contracting. Salary and wages are not included. A jointly owned rental property is treated separately from your own turnover.

3.2 Direct bookings

If you also take bookings directly, for example through your own website, the platform rules do not cover those stays. The ordinary GST rules apply, and you may have to pay GST on that income.

4. Holiday homes and the mixed-use asset rules

If you use a property yourself and also let it out, Inland Revenue's mixed-use asset rules may apply. A property is a mixed-use asset in a tax year if it is:

• used for both private use and income-earning use, and
• unused for 62 days or more.

Under these rules you work out how much of the year was private use and how much was income-earning use. That decides how much income you declare and what expenses you can claim.

4.1 When the rules don't apply

They do not apply to a residential property used for long-term rental, or to a room in your home rented out for short stays.

4.2 Opting out

You can choose to leave the income and expenses out of your returns if your gross income from letting the property in the tax year is less than NZ$4,000, or if it makes a loss and the income is less than 2% of its value. These exemptions do not apply to holiday homes owned by companies.

4.3 Renting out your own home or rooms

For short stays in your own home or its rooms, Inland Revenue offers a short-stay standard cost option as an alternative to working out actual costs.

5. Council rates and keeping on top of it

Council rates in Auckland

Auckland Council rates homes listed on sites such as Airbnb by the nights booked in the year. Up to 28 nights, the property stays residential. From 29 to 135 nights it is rated 75% residential and 25% business, from 136 to 180 nights 50% each, and above 180 nights it is rated as business. Our guide to Auckland's Airbnb rules covers the planning side.

Keep records all year

Download statements from each platform, keep receipts for every expense, and log the days the property was let, used by you, or empty. The mixed-use asset rules turn on those numbers.

Get advice for your situation

How much tax you pay depends on your other income, how the property is owned and how it is used. An accountant can work out your position.

How a manager helps

A manager keeps booking statements, cleaning invoices and maintenance records in one place. See the Airbnb management in New Zealand page, what an Auckland Airbnb can earn, or our guide to the best Airbnb management companies in Auckland.

This article is general information based on Inland Revenue guidance, not tax advice. Speak to a tax agent about your own circumstances.