What Airbnb Tax Deductions Can You Claim in Australia?

By Jess Murray CPA, Registered Tax Agent & Airbnb Tax Specialist

Taxes are an inevitable part of earning Airbnb income, and of course no one wants to pay more tax than they have to. One of the most effective ways to reduce your Airbnb tax bill is by understanding and correctly claiming all your available tax deductions for Airbnb.

The costs of running an Airbnb are wide and varied. There are day-to-day operating costs, asset purchases, property holding costs and one-off setup outlays. The challenge is in knowing which expenses are claimable, how they’re treated for tax, and how to capture them correctly so they translate into legitimate Airbnb tax deductions at year end.

This article is a complete guide to all the Airbnb expenses that hosts can claim, along with the ATO’s rules that determine how those costs are claimed. With a clear view of exactly what tax deductions you’re entitled to, it becomes much easier to keep the right records and get the best possible result on your Airbnb tax return.

EasyBnbTax is an Australian tax firm. We’ve written this article specifically for Aussie Airbnb hosts, using Australian tax law and Australian Tax Office requirements for Airbnb. If you’re based in a different country, this information won’t apply to you.

Table of Contents

• Apportionment of Airbnb Tax Deductions >
• What Airbnb Tax Deductions Can I Claim? >
• How Do I Claim Airbnb Assets and Depreciation? >
• How Do I Claim Capital Works for Airbnb? >
• Airbnb Expenses That Are Not Tax Deductible >
• Airbnb Tax Deduction Timing Rules Explained >
• Bookkeeping for Airbnb Tax Deductions >
• Learn To Maximise Your Airbnb Tax Deductions >
• FAQ’s >

Apportionment of Airbnb Tax Deductions

Before jumping into a list of deductible Airbnb expenses, it’s important to understand the concept of apportionment. 

Many Airbnb hosts live in their property, share common areas with guests, block out dates for personal use, or only make the property available part-time. So when it comes to claiming tax deductions for Airbnb, the ATO only allow deductions for the portion of expenses that relate to earning Airbnb income. Otherwise hosts would be unfairly claiming tax deductions for their own private home use. 

Apportionment is the process of adjusting expense deductions for these kinds of private use. For expenses that require apportionment, the ATO requires both a time-based percentage and a space-based percentage to be applied together. This ensures that deductions are limited to the portion of the asset that is genuinely used to earn Airbnb income. 

For example, take a coffee pod machine purchased for the kitchen of a shared Airbnb. The coffee machine cost $100. It is used by both the Airbnb host and by guests, and the Airbnb was booked for 9 months of the year. The ATO would require a floor space apportionment of 50% since the asset is in a shared area, and a time apportionment of 75%, since the Airbnb was booked for 9 out of 12 months. So the calculation for the tax-deductible amount is $100 x 50% x 75% =  $37.50. Every Airbnb expense must be assessed, and where necessary apportioned, in this way. 

So when looking at tax deductions for Airbnb below, it’s important to keep in mind that apportionment may be applicable. As a result, the whole amount of the expense may not be deductible, depending on the type of Airbnb and its usage. 

Apportionment is a complex topic. Our article on Apportionment for Airbnb goes into more detail, including how to set up your Airbnb bookkeeping to handle the calculations. But for the purposes of this article, just bear in mind that many Airbnb expenses are only partly deductible, and the examples below should always be read through that lens.

What Airbnb Tax Deductions Can I Claim?

Running an Airbnb comes with a wide range of costs, and many of them are tax-deductible when they relate to earning Airbnb income. In order to be sure you’re capturing all potential tax deductions, it helps to have a clear understanding from the get-go of which Airbnb expenses can be claimed and which can’t. Then you’ll know exactly what receipts to keep throughout the year.

The following sections walk through all the expenses that Airbnb hosts can claim, with practical examples to help you identify which costs apply to your own Airbnb setup.

Claiming Airbnb Management Expenses

Our first category of Airbnb tax deductions is expenses relating to managing, operating, and promoting your Airbnb. 

• Airbnb or other booking platform fees
• Property manager fees
• Photography, advertising and marketing
• Website expenses
• Short-stay levies and permits
• Keys and access management costs
• Airbnb management apps and software
• Airbnb hosting courses and training
• Computer expenses and stationery
• Bookkeeping expenses
• Tax agent’s fees

These types of expenses are typically 100% deductible, as they relate entirely to earning Airbnb income, and they don’t have a private use component that needs to be apportioned.

Claiming Airbnb Guest Expenses

This category covers expenses relating directly to the guest experience and to the physical spaces that your guests stay in. Common Airbnb guest expenses include:

• Consumables (e.g. coffee, toilet paper, toiletries)
• Cleaning and laundry costs
• Repairs to damage caused by guests
• General repairs and maintenance to guest spaces
• Furniture, appliances, décor and other assets
  

Depending on the type and layout of your Airbnb, some of these expenses may be fully deductible, while others may need to be apportioned. For example, in a shared home, items located in a guest bedroom or guest-only bathroom would typically have a 100% floorspace apportionment, whereas items in shared areas would have a 50% floorspace apportionment. A lamp in a guest bedroom is treated differently from a lamp in a shared living room, just as consumables in a private guest bathroom are treated differently from those used in a shared bathroom. 

A well-designed Airbnb bookkeeping system should allow you to record the type and location of each expense. These details are essential for the apportionment calculations required at tax time. Our article on apportionment for Airbnb explains how this works in more detail.

It’s important to keep in mind that when buying a mixture of guest, shared and personal items in one transaction, you’ll need to separate each item into its respective category. For example, your supermarket receipt could have coffee pods for a shared kitchen, shower gel for a guest bathroom, and food for your personal use. You would need to separate and itemise your grocery list to make sure each individual item is correctly apportioned. Alternatively, you could consider using two separate shopping baskets and two separate transactions in order to simplify your bookkeeping.

Airbnb Whole Property Expenses

These are expenses that relate to the property as a whole. These expenses would arise regardless of whether the home was an Airbnb, short-term rental or long-term rental. These will always be apportioned by both your time apportionment and floor space apportionment. 

• Body Corporate Fees
• Council Rates
• Electricity & Gas
• Gardening
• Interest on your mortgage
• Internet
• Insurance
• Netflix, Foxtel, etc
• Pest Control
• Repairs & Maintenance for the property in general
• Water Rates

One common trap to note is that for mortgage repayments, only the interest portion of the payment is deductible, not the principal. When recording this in your Airbnb spreadsheet, refer to your loan statements to find the interest charges for each month.

How Do I Claim Airbnb Assets and Depreciation?

What Is A Depreciable Asset?

A depreciable asset is a physical item that has an ongoing use in your Airbnb. Depreciable assets can generally be removed without damaging the property, and retain their own identity rather than becoming part of the building. 

Common Airbnb depreciable assets include:

• beds and mattresses
• couches and sofas
• dining tables and chairs
• refrigerators and freezers
• washing machines and dryers
• dishwashers
• ovens, cooktops and rangehoods
• televisions
• air conditioners and heaters
• outdoor furniture sets

How Does Depreciation Work?

Depreciation is the way the tax system spreads the cost of an asset over its useful life, rather than allowing the full cost to be claimed upfront. It reflects the idea that assets wear out, become obsolete, or lose value over time as they’re used to earn income.

For Airbnb assets, depreciation is usually calculated using the diminishing value method. Under this method, you claim a higher deduction in the earlier years of an asset’s life, with the deduction reducing over time. There is an alternative method called the prime cost method, which spreads deductions evenly across the asset’s life, but this is rarely used in practice because the diminishing value method typically produces a better tax outcome overall. 

The rate at which an asset is depreciated depends on its effective life, which is the period the Australian Taxation Office estimates the asset can be used to produce income. The ATO publishes effective life guidelines for common assets, such as furniture, appliances and equipment. These effective lives are used to calculate the annual depreciation rate.

In the year of an asset’s purchase, depreciation starts on the date the asset was first ‘installed and ready for use’. So if there was a period of time between paying for an asset and it being installed in an Airbnb and ready for guest use, the installation date would be the relevant date for depreciation purposes. For an asset purchased during the Airbnb setup period, the start ‘installed and ready for use’ date is the date the Airbnb was first listed and ready to take guests.

Here’s a simple example of how the depreciation calculation works, taking a TV purchased for an Airbnb:

• Purchase Price = $1,000
• Purchase Date = 1st of April
• Apportionment in the first year = 91 days
• ATO’s effective life for a TV = 10 years

As you can see, the depreciation is apportioned in the first year. This means the claim is usually highest in the second, and then the tax benefits taper off gradually over time.

In the rental property schedule of your tax return, this kind of depreciation is referred to as Capital Allowances. You may also see it referred to as depreciation on Plant & Equipment, or Division 40 depreciation.

How To Claim Low-Cost Assets Under $300/$600

Low-cost assets are treated differently. An asset is considered low cost if it costs less than $300 per property owner. For single-owner properties, this means a $300 threshold, while for jointly owned properties, the threshold effectively becomes $600 per asset. Items that are designed to be used as a set, such as dining chairs or a linen set, must be counted as one asset for this test. 

Common low-cost Airbnb assets include:

• Kitchenware, coffee makers and small appliances
• lamps and small electrical items
• décor items
• low-cost furniture and linen
• household equipment used by guests
  

Low-cost assets can be claimed in full in the year they are first installed and ready for use, rather than being depreciated over time. This gives Airbnb hosts a better cash flow outcome, as the tax benefit from the purchase is received all in the first year, rather than coming over many years. 

Only Brand New Assets Are Deductible

An important restriction for depreciable assets, including low-cost assets, is that only brand-new assets are tax-deductible. This means that an Airbnb guest must be the first-ever user of the item. Assets bought second-hand, or items that were previously used privately in your own home, cannot be claimed under ATO rules. That said, buying second-hand furniture or reusing existing items can still make financial sense, as the cost savings often outweigh the lost tax deduction.

For more detail on this topic, jump to our article on claiming depreciation for Airbnb.

How Do I Claim Capital Works for Airbnb?

While depreciable assets are separate items that can be removed and replaced over time, capital works relate to the structure of the property itself. Airbnb renovations and improvements made to a property are classed as capital works, and are treated differently for tax, as they’re claimed over a much longer period of time.

What Are Capital Works For Airbnb?

A capital works asset can be identified by these characteristics:

• It is fixed in place and can’t be easily removed without damaging the property
• Replacing the asset would typically be called a renovation, as opposed to a simple switch.
• It forms part of the home, such that you would consider the house to be incomplete without it
• It tends to lose its own standalone identity and becomes part of something bigger, for example, kitchen cabinets become part of the kitchen.  

An exception applies for assets that have electronics or a motor, which are always classed as depreciating assets. For example, an air conditioner perhaps couldn’t be removed from a house without damage, but because it has a motor, it is still a depreciable asset.

Common capital works assets in an Airbnb include:

• The structure of the building itself, including walls and the roof
• Kitchen cabinets, benchtops and splashbacks
• Bathroom cabinets, sinks and tapware
• Built-in cabinetry, wardrobes and storage
• Fixed flooring, such as hardwood floors or tiles
• Plumbing and electrical work within walls
• External structures, including garages, verandahs, pergolas, decks and sheds

Repairs vs Improvements

A common trap for Airbnb hosts is the difference between repairs and improvements. Repairs can be claimed up front, while improvements must be claimed under capital works rules over a number of years.

• A repair restores a property or asset that is damaged or worn out back to its original condition. It does not improve the property or asset, upgrade it, or change its function. To be classed as a repair, it must still be fundamentally the same original asset.
• An improvement goes beyond restoring the original condition. It improves or upgrades the property or asset. Improvements to buildings and other capital works assets must be claimed under capital works rules, they cannot be claimed up front as a repair. Similarly, improvements to depreciable assets must be claimed under depreciable asset rules, not as repairs.

Examples of repairs that may be claimed up front:

• Fixing a leaking tap
• Repairing a broken door
• Replacing damaged tiles
• Replacing a damaged section of fencing or decking
• Patching and repainting walls due to wear and tear.

Examples of improvements that are claimed as capital works:

• Replacing an old kitchen with a new or upgraded kitchen
• Renovating or modernising a bathroom
• Installing new flooring where old flooring is removed
• Adding air conditioning where none previously existed
• Reconfiguring rooms by removing or adding walls
• Extending or building a new deck or pergola

Repairs to damage or deterioration that occurred while a property was being used for Airbnb will be deductible up front in the year that the repair is paid for. 

There are different rules for repairs carried out during the Airbnb setup phase. Whether a repair is deductible depends on what the property was used for before Airbnb, and when the damage that is being fixed actually occurred. Repairs to pre-existing wear and tear are often not deductible upfront, even if the work feels necessary to get the property ready for guests.

For more on claiming deductions for repairs, jump to our article on repairs for Airbnb.

How Airbnb Capital Works Are Claimed

Like depreciable assets, capital works are not deducted upfront. Instead, they are claimed gradually over time, reflecting the long-term nature of structural improvements to the property.

However, unlike depreciable assets, which use a diminishing value calculation based on the effective life of the particular asset, capital works are claimed at a flat rate of 2.5% per year, over 40 years. 

In the first year, capital works claims are also apportioned by days. For capital works costs incurred during Airbnb setup, deductions start on the date the property is first available for rent. For capital works once the Airbnb is running, deductions start from the date the works are completed, not the date they were paid for.

Airbnb Expenses That Are Not Tax Deductible

Finally, there are some Airbnb expenses that don’t qualify for any tax deduction, despite being essential for the operation of your Airbnb. Some of these have already been touched on earlier in this article, but we’ll mention them again here for completeness.

Repairs During Airbnb Setup (Depends On The Situation)

Repairs carried out during Airbnb setup are often not deductible, even though they’re a common and necessary part of getting a property ready. Depending on the situation, these costs can sometimes be treated as capital expenditure and claimed over time under the capital works rules, and are sometimes not deductible at all.  Read more in our article on repairs for Airbnb.

Business Setup Costs (Depends On Timing)

Some Airbnb setup costs are not deductible simply because of timing. Where business-style setup expenses (e.g. marketing, tax advice) are incurred in a financial year before the property is first available for rent, they can’t be claimed later, even if they directly relate to the Airbnb. Our article on Airbnb setup costs covers this in more detail.

Second Hand Assets

Second-hand furniture, including items taken from your own home, are not deductible for Airbnb tax purposes. This is because the ATO does not allow depreciation deductions for any second-hand assets in residential rental properties, even if they’re used exclusively for income-producing purposes. See our article on Airbnb depreciation for details.

Your Own Time and Labour

Your own time and labour as an Airbnb host is not deductible. Tasks like sourcing furniture and decor, setting up Airbnb listings and marketing, stocking and furnishing your Airbnb, and pre-guest cleaning all take time. But the ATO does not allow any tax deductions for the hours you personally spend setting up or running your Airbnb. This is no different to earning a salary as an employee, where you also can’t claim a deduction for your time at work.

A related question arises for jointly owned Airbnbs where one owner does most or all of the cleaning and active management, including setting up the Airbnb. The ATO doesn’t allow any deduction for unpaid labour between spouses or co-owners. Even though the work is genuine and necessary, there are no payments allowed and no tax deductions for one partner doing more work of setting up, cleaning or managing the Airbnb.

Travel To Set Up Or Manage The Airbnb 

Another surprisingly non-deductible expense is Airbnb travel. Since 2017, the ATO has removed all tax deductions for travel expenses for Airbnb and rental properties. This change was primarily aimed at rental property owners claiming deductions for flights and travel as ‘inspection costs’, when the true purpose of their trip was largely private, such as a family holiday. As a result, there are no claims available for car travel, flights, accommodation or local trips related to setting up, cleaning, inspecting, repairing or restocking an Airbnb. 

Private Use Based on Floorspace and Time

As mentioned before, it’s common for Airbnb’s to involve some elements of private use. This could be spaces shared with guests, or days when the Airbnb is not available for bookings. Private use is of course not deductible, and so the process of apportioning tax deductions ensures that only the Airbnb portion of your expenses is claimed in your Airbnb tax return. A good Airbnb bookkeeping spreadsheet or software will take care of these calculations for you. Read more in our article on apportionment for Airbnb.

Airbnb Tax Deduction Timing Rules Explained

Airbnb tax deductions don’t just depend on the type of expense; they also depend on timing. The ATO applies different rules to regular operating expenses, assets, capital works, and setup costs, and each category follows its own deduction timeline. Getting these timing rules right is essential, as identical expenses can receive very different tax treatment depending on when they’re incurred.

Timing of Regular Airbnb Tax Deductions

Rental income and expenses, including for Airbnbs and short-term rentals, are reported on a cash basis. Under cash-basis accounting, a tax deduction is claimed in the financial year in which the expense is paid, regardless of when it relates to.

This means that if you pay an expense in a particular financial year, the deduction belongs in that year, even if the expense covers a longer period of time. For example, if you pay an annual insurance premium in June, the full amount is deductible in that financial year, even though most of the coverage relates to the following financial year.

The same principle applies to utilities, rates, body corporate payments, internet services, cleaning costs and most other day-to-day Airbnb expenses. The key factor is the date of payment, not the period the expense relates to.

Timing of Deductions for Assets and Capital Works

The timing rules are different for assets and capital works, because these costs are not deducted immediately. Instead, they are claimed over time through depreciation or capital works deductions. These claims begin when the asset is installed and ready for use, not the purchase date. An asset that’s sitting in storage, waiting to be installed, or that has been purchased but not yet installed, doesn’t trigger a deduction until it is actually in place and ready for its income-producing purpose. 

Note that this rule implies that the property itself must be available and ready for guests to stay, so the rules for an asset purchased during an Airbnb’s setup period are a little more nuanced. More on this below. 

Claiming Expenses During Airbnb Setup

For tax purposes, Airbnb setup costs are expenses incurred before your Airbnb is genuinely ready and available to earn income. These are the costs involved in preparing a property for short-term guests, as opposed to the ongoing costs of running an Airbnb once bookings are underway.

Setup costs typically include things like furnishing the property, buying appliances and equipment, carrying out repairs or improvements, arranging insurance, paying for photography, and setting up listings and access systems. This cash outlay usually happens within a condensed setup period, before any Airbnb income is earned.

The Australian Tax Office’s tax rules for claiming Airbnb setup costs are complex. Some expenses can be claimed immediately, some must be written off over time, some are treated as capital, and others are not deductible at all. 

The ‘First Available Date’ Explained

The tax treatment of Airbnb setup costs hinges on when the property is first available for rent. This is the point at which the setup phase ends, and normal Airbnb expense rules begin.

A property is considered first available for rent when it is fully furnished, guest-ready, and listed in a way that allows bookings to be accepted. An actual booking is not required. However, the listing must be live, and the property must be genuinely capable of earning income.

This timing point determines how different costs are treated. It sets when holding costs can start being claimed, when depreciation on assets begins, and whether repairs are treated as deductible expenses or as part of setup. 

The Airbnb tax rules for setup costs that are listed below all hinge on this single date, so it’s important to be clear on what this date is for your own Airbnb in order to claim your deductions correctly.

Business-Oriented Setup Expenses Immediately Deductible

Setup expenses that are incurred to establish, market and launch the Airbnb activity (as opposed to improving the property itself, or buying lasting physical assets) are often deductible up front, even if they are incurred before the first available date. 

Examples include:

• Short-stay permits and registration fees
• Professional photography and floor plans
• Listing copywriting or optimisation services
• Website expenses
• Guest manuals and printed instructions
• Guest consumables purchased for Airbnb use
• Keys and access costs (excluding those classed as assets)
• Software, computer expenses, stationery
• Tax advice in relation to Airbnb setup

However, there is a critical timing rule to be aware of. Under ATO rules, rental property expenses are only deductible in a financial year in which the property was genuinely available for rent. If this timing requirement isn’t met, the expense can’t be claimed at all.

In practice, this means that where these expenses are incurred in the same financial year that the property first becomes available for rent, they are deductible in full. On the other hand, if they’re incurred in a different financial year, for example, paid in June but the Airbnb first becomes available in July, then the deduction is lost.

There is one exception to this rule, which is short-stay permit application fees. Because a permit establishes a legal right to use the property for short-term accommodation, it is treated as a capital expense. If it can’t be claimed in the year it’s incurred due to the timing rule above, it can instead be capitalised, with the tax benefit realised later when the property is sold. More on capital expenses is covered below.

Assets Purchased During Setup

As a quick recap, a depreciable asset is an item that is used over time, and that can be removed from your Airbnb without damage, such as appliances, furniture and decor. In an asset’s year of purchase, depreciation is apportioned by days, and the start date is based on when the asset was first ‘installed and ready for use’. 

For an asset purchased during the Airbnb setup phase, ‘installed and ready for use’ means the first available date of the Airbnb itself. Assets purchased earlier don’t start depreciating until the Airbnb is available to take bookings and earn income.

The same rule applies to renovations, improvements and other capital works that occur during the Airbnb setup phase. The capital works deduction starts from the date the property is first available for rent. 

Holding Costs During Setup

Holding costs are the ongoing costs of owning and maintaining a property. This includes insurance, council rates, mortgage interest, and general property maintenance. They continue to apply during the Airbnb setup period, even though there are no guests and no income being earned.

Whether holding costs are deductible during the setup period depends on how the property was used immediately before it became an Airbnb. 

If the property was already being used as a long-term rental property, then holding costs during the Airbnb setup period may be deductible. 

In most other cases, holding costs aren’t deductible, but they can often be capitalised, which means they can be claimed against the capital gain when the property is sold in the future. Once the property is ready and available for rent, then holding costs can be claimed as regular expenses. 

For more detail on these rules, visit our article on claiming Airbnb setup costs.

Bookkeeping for Airbnb Tax Deductions

Airbnb bookkeeping may be one of the least glamorous parts of running an Airbnb, but it’s also one of the most important for smart management decision-making, maximising profits, and staying ATO compliant.

Step One: Gathering Airbnb Receipts

It’s essential to have a system for collecting receipts and tracking expenses from day one. This includes physical receipts, emailed invoices, and online purchases. A lost receipt is a lost tax deduction, which is money down the drain. So although recordkeeping can feel like a chore, it’s one that makes you money. Every Airbnb host needs a routine for capturing receipts that is on-the-spot, fast and as low-friction as possible. 

For digital receipts, many people default to creating folders in their cloud drive or computer hard drive. But in practice, an easier option is to use folders inside your email inbox instead. Most digital receipts arrive by email anyway, so this is a “grab them where they are” strategy. It avoids the extra step of downloading, renaming and re-uploading files. 

Most email platforms offer the ability to create rules that automatically sort incoming emails into folders, which means much of your filing can be automated. So for regular bills, such as council rates or insurance bills, you can create rules that pick up the subject line and send them to your Airbnb expenses folder automatically. This helps ensure that none of your tax deductions are missed in a busy inbox. 

For physical receipts, a good strategy is to keep envelopes in strategic locations, such as in the car, in a handbag, and at home near where you keep your wallet or keys. The key to success is that there’s always somewhere obvious to put a receipt the moment you get it.

Another effective option is to digitise physical receipts immediately at the store checkout by taking a photo on your phone and emailing it to yourself. Scanning apps exist, but in reality, taking a photo is usually faster, and speed is what makes a routine stick. 

The ATO requires you to keep records for at least five years, so your process needs to be simple and low-friction enough that you can maintain it consistently.

Step Two: Airbnb Bookkeeping

Having gathered your receipts and invoices, on a regular basis you will then need to enter your expenses into some kind of bookkeeping software or spreadsheet. By collating your income and categorising and totalling expenses as you go, you can track your Airbnb’s profit and performance during the year, and avoid an end-of-year scramble at tax time.

A specialised Airbnb bookkeeping system is essential. As we mentioned earlier, the ATO only allows deductions for the portion of expenses that relate to earning Airbnb income based on time and floorspace. This means complex apportionment calculations are required for all expenses. Airbnb’s also have unique categories of tax deductions, and extensive asset and depreciation tracking requirements. 

Generic bookkeeping solutions generally don’t offer these features, and the workarounds they would need are technical and tedious. Instead, a bookkeeping solution that is designed specifically for Airbnb will always be smoother and simpler.

The EasyBnbTax Ultimate Airbnb Spreadsheet

The EasyBnbTax Ultimate Airbnb Spreadsheet is purpose-built to handle Airbnb taxes with ease.

It gives you a single system to track Airbnb income across platforms, categorise expenses using Airbnb-specific categories, calculate apportionment correctly based on time and floor space, and maintain a full depreciation schedule for assets and capital works. Throughout the year, you can see how your profit or loss is tracking, and at tax time, the spreadsheet produces a clean, end-of-year summary that lines up directly with the rental schedule in MyGov. Whether you lodge your own return or hand everything to an accountant, the hard work is already done.

Learn more and see what’s included on the EasyBnbTax Ultimate Airbnb Spreadsheet information page.

Learn To Maximise Your Airbnb Tax Deductions

If you’re looking for a deeper understanding of how to manage your Airbnb taxes, that’s exactly what the EasyBnbTax Complete Online Course is designed to deliver. 

This course walks you through everything you need to manage your Airbnb taxes from start to finish. Setup costs, deductions, depreciation, apportionment and bookkeeping are all covered step by step, using plain English and real Airbnb examples. You learn not just what to do, but why you’re doing it.

The course includes 30+ video lessons, the full version of the Ultimate Airbnb Spreadsheet with lifetime updates, a step-by-step MyTax walkthrough so you can lodge your own tax return, and ongoing support. And it’s 100% tax deductible. This course is a smart financial decision for new Airbnb hosts. It pays for itself by teaching you to maximise your legitimate tax deductions, showing you all the common mistakes to avoid, and empowering you to lodge your Airbnb tax return if you choose. 

If you want to feel confident managing your Airbnb taxes, the EasyBnbTax Complete Online Course is a smart solution. Learn more on our course information page, which includes a free sneak peek video lesson with some handy tax deduction tips.

Key Takeaways for Airbnb Tax Deductions

Airbnb tax deductions are governed by detailed rules, and it’s fair to say they’re more nuanced than most hosts expect. Between apportionment, timing, depreciation, and different property setups, the ATO’s tax treatment of an expense isn’t always obvious at first glance. 

The key to getting the most out of your deductions for Airbnb is to have a solid understanding of the ATO’s rules, and a reliable way to track expenses as you go. That’s what allows deductions to be claimed consistently, without anything slipping through the cracks, or causing a scramble at tax time. When handled right, you can be confident you’re squeezing the maximum possible profits from your Airbnb.

FAQ’s About Tax Deductions For Airbnb in Australia

What tax deductions can Airbnb hosts claim in Australia?

Airbnb hosts in Australia can claim tax deductions for expenses incurred in earning Airbnb income, including platform fees, cleaning and laundry, guest consumables, utilities, insurance, council rates, property management fees, repairs, depreciation on eligible assets, and capital works. Deductions must be reduced for private use through apportionment where the property is shared or not available full-time.

How do Airbnb tax deductions work for jointly owned properties?

For jointly owned Airbnbs, income and tax deductions must be split according to the legal ownership on the title of the property. So for a property with two equal owners, each must declare 50% of all income and 50% of all expenses in their respective tax returns. This is true even if one owner does the majority of the management, cleaning or administration work.

Can I declare Airbnb income in my spouse’s name?

No. Airbnb income must be declared according to the legal ownership on the title of the property. So for a jointly owned property, even if one owner does the majority of management, cleaning or administration work, all income and expenses must be declared 50/50 in each owner’s respective tax return. 

Can I pay my spouse for cleaning or managing the Airbnb?

No. Payments to a spouse or co-owner for cleaning, managing, or maintaining an Airbnb are not tax-deductible. The ATO does not allow deductions for labour between spouses or related owners, even where the work is genuine and necessary.

Can I claim for my own time spent managing or cleaning my Airbnb?

No. Your own time and labour are not tax-deductible. This includes cleaning, guest communication, restocking supplies, managing bookings, and general administration. The ATO does not allow deductions for personal effort, even when the work directly relates to earning Airbnb income.

Can I claim tax deductions if I Airbnb part of my own home?

Yes. Airbnb expenses can be claimed when renting out part of your own home, but only the portion that relates to earning Airbnb income. Expenses must be apportioned to exclude private use based on both shared use of floor space, and on nights with guest bookings vs no bookings. 

Do Airbnb expenses need to be apportioned for private use?

Yes. Where an Airbnb involves private use, such as shared spaces or periods of personal occupancy, expenses must be apportioned. The ATO requires both time-based and floor space apportionment so only the income-producing portion of each expense is claimed.

Can I claim mortgage interest for my Airbnb?

Yes. The interest portion of a mortgage is tax-deductible to the extent the property is used to earn Airbnb income. Where the property is shared or not available year-round, the interest must be apportioned to reflect private use.

Is the principal portion of my mortgage deductible for Airbnb?

No. Mortgage principal repayments are never tax-deductible. Only the interest component of a loan for an Airbnb can be claimed as a tax deduction.

Are travel costs to manage or inspect an Airbnb tax deductible?

No. Travel expenses related to managing, inspecting, cleaning, repairing, or restocking an Airbnb are not tax-deductible. Since 2017, the ATO has disallowed all travel deductions for residential rental properties, including short-term rentals like Airbnbs. This includes car travel, flights, and all other forms of travel.

What records do I need to keep for Airbnb tax deductions?

Airbnb hosts must keep records showing the date, amount, supplier, and nature of each expense. Receipts or invoices can be digital or physical, including photos of physical receipts. Airbnb hosts must also keep records of calculations for apportionment, depreciation, and timing calculations where required. Records must be kept for five years.

How long do I need to keep Airbnb tax records for?

Airbnb tax records must be kept for five years. This includes receipts, invoices, depreciation schedules, and apportionment calculations that support the deductions claimed.

How can I make sure I don’t miss any Airbnb tax deductions?

Use a consistent Airbnb bookkeeping system, record expenses as they occur, keep all relevant receipts, and understand how apportionment, depreciation, and timing rules apply. Capturing expenses throughout the year ensures deductions are complete and accurate at tax time.

Questions? Thoughts? Pop them in the comments below and I’ll get right back to you!

Happy hosting! – Jess