AIRBNB – SHORT TERM LETTINGS
In fact income from short term lettings is classified as a business income. To that end direct expenses such as light and heat, accountancy, cleaning are allowed as a deduction in arriving at taxable income. Where income from short term lettings exceeds €37,500, the taxpayer is obliged to register for VAT and charge VAT at 9% on short term lettings. VAT can then be reclaimed on business expenses. When an individual sells their own home they can usually avail of Principal Private Residence Relief to ensure that any gain on the sale of the property is exempt from Capital Gains Tax. However Revenue has confirmed that where a room in a property is used exclusively for business purposes Principal Private Residence Relief is restricted.
It is best to get the right advice from the outset to ensure you minimise any exposure to tax where your income from short term lettings is likely to be significant.
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