96 Questions
What is the purpose of the exclusion register?
To list participants who have failed to comply with the code
Short-term rental accommodation is covered by Residential Tenancies Acts.
False
What is the purpose of the Owners Corporation Act 2006 amendment in 2019?
To ensure that guests do not disrupt other apartment owners/dwellers or common areas
The Australian Tax Office considers income from short-term rentals to be ______________ income.
assessable
Who is responsible for ensuring that guests do not disrupt other apartment owners/dwellers or common areas?
Apartment owners
GST is applicable on residential rent.
False
Match the following with the correct description:
Code of Conduct = Regulates the short-term rental accommodation industry Exclusion Register = Lists participants who have failed to comply with the code Owners Corporation Act 2006 = Ensures guests do not disrupt other apartment owners/dwellers or common areas ATO = Considers income from short-term rentals to be assessable income
What is the purpose of the code of conduct?
To regulate the short-term rental accommodation industry
The Body Corporate and Community Management Act 1997 is Queensland legislation.
BCCM Act
Rental investors are required to account for GST on income earned from renting out a room, house, or a unit.
False
What is the percentage of expenses that Sylvia and Stan can claim for the granny flat?
14.14%
Robert can claim 100% of the general expenses for renting out his apartment on an occasional basis.
False
What is the condition for claiming rental deductions for a holiday home?
The holiday home must be genuinely available for rent.
Sylvia and Stan can claim a deduction of _______________ of the general expenses.
18.18%
Match the following scenarios with the correct claim for rental deductions:
Rented out entire main residence on an occasional basis = Claim percentage of general expenses based on number of days rented Granny flat rented out = Claim percentage of general expenses based on floor area and number of days rented Holiday home not genuinely available for rent = No claim for rental deductions Holiday home genuinely available for rent = Claim percentage of general expenses based on number of days rented
Why can't Pam claim rental deductions for her holiday home?
All of the above
Tom and Barbara can claim rental deductions for their holiday home.
False
What is the formula to calculate the expenses deduction for the granny flat?
Floor area of granny flat / Total floor area x Number of days rented / 365 days x 100%
Robert can claim _______________ of the general expenses for renting out his apartment.
6.85%
What is the purpose of calculating the floor area of the main house, garage, patio, and granny flat?
To calculate the expenses deduction for the granny flat
What is the category of income from renting out a car parking space?
Other Income
The ATO requires individuals to report income from renting out a car parking space on their tax returns.
True
What is the purpose of the Sharing Economy Reporting Regime?
To ensure individuals report income from sharing economy activities in their tax returns.
Jacinta can claim ____% of the general property expenses for renting out her garage.
3.75%
What is the name of the regime that requires compulsory reporting by Electronic Distribution Platform operators?
Sharing Economy Reporting Regime
The Melbourne congestion tax is imposed on off-street private and public car parking spaces in all areas of Melbourne.
False
What is the period of rental for which the Sharing Economy Reporting Regime applies?
90 days or less
The ATO can share information with other government departments and agencies, including the _______ and _______.
Department of Social Services, State and Federal Police
Match the following expenses with the correct category:
Service fee to online platform = Specific expenses Council rates = General property expenses Professional photography = Specific expenses Insurance = General property expenses
Jacinta can claim 100% of the general property expenses for renting out her garage.
False
What is a short term rental property?
A furnished property rented on a short-term basis
Short term rentals are also referred to as long-term rentals.
False
What are some reasons why short term rental accommodation may be required?
Holiday, business travel, conferences, emergency accommodation, medical visits, special events, relocation
The Fair Trading Act 1987 (NSW) covers the provision of short term rental accommodation in Section _______________.
54B
Match the characteristics of short term rentals with their descriptions:
Rental period = 1-30 days Fully furnished = Yes Income = Higher rate charged-can vary guest to guest Maintenance = High cleaning and presentation costs
What is the main difference between short term rental and long term rental?
Rental period
Short term rentals have a low vacancy rate.
False
What is a holiday apartment in a commercial residential property?
A type of short term rental property
What is the primary criterion for a business of letting rental properties?
All of the above
Short-term rental income earned through asset sharing is declared as business income.
False
What is the income earned by subletting a rental property classified as?
Business income
When apportioning expenses for renting out part of a home, expenses can only be claimed for the ______________ in the financial year rented to a paying guest.
days
How is the room occupancy calculated for Trudy's apartment?
(Floor area of the second bedroom / Floor area of the apartment) x Number of days rented / 365 days
Sylvia and Stan can claim a 100% deduction of the expenses related to the granny flat.
False
What is the purpose of apportioning expenses when renting out part of a home?
To calculate the deductible expenses based on the floor area used for income producing purposes
Match the following terms with their definitions:
Asset sharing = Renting out a property on a short-term basis, such as on online platforms Business-like manner = Letting rental properties with significant size and scale Apportionment = Renting out a part of a home and claiming expenses
Trudy can claim a deduction of ______________% of the general expenses such as council and water rates, loan interest, body corporate fees, insurance, and electricity.
13.19%
Sylvia and Stan are required to pay CGT on the granny flat when they rent it out.
False
What type of insurance is usually not sufficient for short-term rentals?
Standard building and contents insurance
A bed and breakfast accommodation can accommodate more than 6 paying guests at any one time.
False
What is the primary purpose of a smoke alarm annual inspection in a rental property?
To ensure the smoke alarm is functioning properly.
Body corporate fees are also referred to as __________ fees.
strata title
Which of the following is an additional potential rental deduction for a houseboat?
Marina berthing fees
A bed and breakfast accommodation can serve meals to non-paying guests.
False
What is the purpose of a PABX in a holiday home?
To provide phone services to guests.
In a short-term rental, the owner can set temperature restrictions using a __________ thermostat.
smart
Match the type of accommodation with its specific requirement:
Bed and Breakfast = Serving meals only to paying guests Houseboat = Marina berthing fees Holiday Home = Providing linen service for sheets, pillowcases, and towels
What type of insurance is offered by Airbnb for hosts?
AirCover for Hosts
What is the reason Steve and Josie cannot claim any rental deductions for their holiday home?
The property is not genuinely available for rent and used privately during key periods.
If a holiday home is rented out to family or friends at below market rate, the deductions are limited to the same amount received for rent.
True
What is the purpose of the "boat familiarisation" process for houseboat rentals?
To familiarize guests with all facilities/equipment provided on the initial day of renting.
Logan uses his holiday home for _______ nights during the year in off-peak periods.
21
What is the minimum length required for a houseboat to be eligible for rental?
5.2 metres
A private mooring licence for a houseboat is issued to a partnership.
False
What is the name of the peer-to-peer boat rental service mentioned in the text?
Bedsonboard.com
The gross rental income of $32,000 is declared, and the rental advertising and commission of $2,240 is claimed at _______ as this relates to tenants only.
100%
Match the type of holiday rental with the corresponding online platform:
Houseboat = Bedsonboard.com Caravan or motorhome = Camplify
Taxpayers can only claim deductions available for standard long-term rental properties for their holiday home.
False
What is a key factor to consider when operating a commercial residential property?
Operates in a commercial or business-like manner
Bob's bed and breakfast accommodation is considered a taxable supply of accommodation in commercial residential premises.
True
What is the threshold for GST registration?
GST turnover is greater than $75,000
Accommodation is considered short-term if guests stay for less than __________ continuous days.
28
What is the purpose of online car park rental platforms?
To manage the advertising and collect payments for car parking spaces
GST applies to long-term accommodation.
False
What is the concession that may be eligible for if sold as an active commercial business activity?
Small Business CGT Concession
The Australian Tax Office considers income from short-term rentals to be ______________ income.
taxable
Match the following expenses to the correct category:
Mattresses and pillows = Specific expenses Food and drinks for guests = Specific expenses Kitchen equipment = Specific expenses GST registration = Commercial residential property factors
Concessional treatment applies to short-term accommodation.
False
Which council in Queensland has introduced a local law requiring owners to appoint a property manager or contact person who must be available 24/7?
Noosa Shire Council
There is currently specific legislation in place in South Australia for short-term rental accommodation.
False
What is the proposed annual registration fee for short-term rentals in Melbourne City Council?
$350.00
The Western Australian government has introduced a Short-Term Rental Accommodation Incentive Scheme, which offers a financial incentive of $______________ to existing owners of un-hosted short-term rental accommodation properties.
10,000
What is the proposed levy on short-term accommodation booking platforms in Victoria?
7.5%
What is the maximum number of days proposed by Melbourne City Council for short-term rentals per year?
180
Match the following councils with their corresponding requirements for short-term rentals:
Noosa Shire Council = Appoint a property manager or contact person Gold Coast Council = Apply to rent out a holiday home Melbourne City Council = Cap of 180 days per year and annual registration fee of $350.00 Western Australian government = Short-Term Rental Accommodation Incentive Scheme
The NSW government has introduced a short-term rental accommodation register.
True
What is an example of an EDP?
A marketplace
The ATO uses data collected from financial institutions to ensure taxpayers are meeting their taxation obligations.
True
What is the purpose of the data collected by the ATO from EDPs and financial institutions?
To ensure taxpayers are correctly meeting their taxation obligations.
Weekend Getaway Co must report the transaction as it involves a supply made through the platform for payment and is connected to _______________.
Australia
What type of information is collected from online platforms?
All of the above
The Short Term Accommodation Association Australia offers members a range of services to assist and support them.
True
The Exclusion Register operates based on a _______________ system.
two-strike
What happens if a guest or Host is listed on the Exclusion Register?
They are prevented from hosting on the platform
What is the purpose of the Short Term Accommodation Association Australia?
To assist and support members
Match the following data with the correct source:
Listing owner and property details = Online platform Payee account name, BSB and account number = Financial institution Property activities = Online platform Date and amount of payment to the payee = Financial institution
Study Notes
Short-Term Rental Properties
- A short-term rental property is a furnished property rented on a short-term basis, including apartments, houses, granny flats, holiday apartments, and rooms in private homes.
- Length of rental period is generally less than 30 days.
- Short-term rentals can also be referred to as vacation rentals, transient rentals, or resort dwelling units.
Reasons for Short-Term Rentals
- Holiday
- Business travel
- Conferences
- Emergency accommodation
- Medical visits/treatment/appointments whilst away from home
- Special events (sporting, concerts)
- Relocation
Short-Term Rental vs Long-Term Rental
- Short-term rental:
- Rental period: 1-30 days
- Fully furnished: Yes
- Income: Higher rate charged - varies guest to guest
- Maintenance: High cleaning and presentation costs
- Turnover of tenants: High
- Vacancy rate: Varies depending on location and time of year
- Long-term rental:
- Rental period: 6 months plus
- Fully furnished: No
- Income: Consistent income as per lease
- Maintenance: General property maintenance
- Turnover of tenants: Low
- Vacancy rate: Longer tenancy so less vacancies
Regulation of Short-Term Rental Properties
- The Fair Trading Act 1987 (NSW) covers the provision of short-term rental accommodation.
- A code of conduct applies to short-term rental accommodation industry participants.
- Measures are in place to ensure that neighbours of short-term rentals are not unduly impacted.
Australian Tax Office Interpretation of Income
- Income from short-term rentals is assessable income.
- Income and expenses are declared at Item 21 Rental income unless operating a business of letting properties, then declared at Item 15 Business income.
- No GST on residential rent.
- Rental investors have minimal involvement in day-to-day rental activities and rely on income from a job.
- A business of letting rental properties requires significant size and scale of rental property activities.
Apportionment of Renting out Part of a Home
- Expenses must be apportioned based on the floor area used for income-producing purposes.
- Expenses can only be claimed for the days in the financial year rented to a paying guest.
Renting out the Main Residence on an Occasional Basis
- Expenses to be claimed relate to the periods of time rented out in the financial year.
- Expenses must be apportioned based on the percentage of the floor area used for income-producing purposes.
Holiday Homes and Availability for Rent
- If the holiday home is not rented out and not genuinely available for rent, no income or expenses are declared on the tax return.
- If the holiday home is not genuinely available for rent, expenses are limited to the extent of the private usage period.
Claiming Deductions for a Holiday Home
- Standard potential rental deductions include:
- Real estate agent fees
- Advertising
- Council rates
- Insurance
- Loan interest
- Mortgage discharge costs
- Bank fees
- Borrowing costs
- Body corporate fees
- Smoke alarm annual inspection
- Gardening
- Electricity and gas
- Pest control
- Land tax
- Legal costs
- Locks and keys
- Repairs and maintenance
- Relocation costs
- Stationery, telephone, postage
- Swimming pool/spa
- Capital works
- Capital allowances
- Holiday home additional potential rental deductions include:
- Travel agent commission
- Credit card commission
- Linen service
- Laundry service
- Internet-WIFI
- PABX
- Cable TV
- Guest supplies
- Cleaning and servicing
- Robot vacuum cleaner
- Firewood
- Household furniture
- Crockery, cutlery, and cookware
- Bedding
- Board games and playing cards
- Books and magazines
- Artwork and home décor
- First aid kit
- Guest screening
- Home security system
- Smart locks
- Video doorbell
- Inventory of appliances, furniture, and fittings
- Short-term rental insurance options include:
- Standard building and contents insurance policies
- Pay-per-night short stay-insurance
- Airbnb host protection insurance (AirCover for Hosts)
Houseboat as a Holiday Rental
- Houseboats are vessels or floating structures that provide accommodation on water.
- They may be available for rent on a short-term basis in similar conditions to land-based accommodation.
- Specific requirements include:
- Vessel must be registered under the Marine Safety Act
- Private mooring licence permits the vessel to be moored on navigable waters-renewable every 12 months
- Comply with the relevant State, Regional, and Local Environmental Plans
- Boat familiarisation of all facilities/equipment provided on initial day of renting
- Houseboat additional potential rental deductions include:
- Marina berthing fees
- Marine maps
- Buoyancy aids
- Water safety poster
- First aid kit
Caravan or Motorhome as a Holiday Rental
- Caravans or motorhomes may be available for rent on a short-term basis through peer-to-peer online platforms.
- Caravan or motorhome additional potential rental deductions include:
- Damage insurance cover
- GPS tracking (distance and speed tracking) if not at a fixed site
- Peer-to-peer platform commission fee
- First aid kit### Criteria for Running a Bed and Breakfast
- No more than 6 paying guests accommodated at any one time
- The total number of residents and paying guests does not exceed 10 persons at any one time
- Serving of meals only to paying guests
- Guests are to stay for a maximum of 14 consecutive nights
Specific Requirements for Running a Bed and Breakfast
- Insurance: building, contents, personal accident, public liability, and cancellation
- Council planning permission
- Food safety and fire safety
- Payment options: virtual terminal, card reader, and point of sale
- Listing on online platforms or other advertising (e.g., tourist websites)
Specific Expenses for Running a Bed and Breakfast
- Mattresses and pillows
- Bed linen, blankets, and towels
- Bedroom furniture and furnishings
- Bedroom décor
- Toiletries
- Food and drinks for guests
- Newspapers and magazines for guests
- Smoke alarms
- Directional road signs
- Front entrance sign
- Website and social media
- Professional photography for advertising and website
- Kitchen equipment
- Outdoor gardening
- Test and tag of electrical appliances
Commercial Residential Property
- Operates in a commercial or business-like manner
- Able to provide accommodation to several unrelated guests at one time
- Accommodation is provided to the public
- Main purpose is providing accommodation
- The operator supplies accommodation in their own right, rather than as an agent
- Occupants usually have the status of guests - their principal place of residence is elsewhere
GST Implications
- Commercial accommodation is accommodation in commercial residential property
- GST applies to short-term accommodation (less than 28 continuous days)
- Concessional treatment applies to long-term accommodation (28 continuous days or more)
- GST registration is mandatory if GST turnover is greater than $75,000
CGT Implications
- May be eligible for the Small Business CGT Concession if sold as an active commercial business activity
Car Parking Space Rental
- Online car park rental platforms (e.g., Parkhound, ParkingMadeEasy, Carparkit, and ParkMe) manage advertising, collect payments, and direct deposit into the owner's bank account
- Rental period may be on a daily, weekly, or monthly basis
- Income received depends on carpark locality, size, and security provided
- Specific expenses: service fee to online platform, professional photography, internet and telephone, insurance, cleaning, and repairs
Section 10: ATO Sharing Economy Reporting Regime
- Commenced on 1 July 2023
- Compulsory reporting by Electronic Distribution Platform (EDP) operators
- Reports transactions for short-term accommodation (less than 90 days)
Section 11: Short Term Accommodation Association and Assistance for Owners/Hosts
- The Short Term Accommodation Association Australia (STAAA) offers members a range of services to assist and support them
- Annual fee is deductible against short-term rental property income
Section 12: Recent and Future Government Changes
- Various changes have been implemented and/or proposed around Australia in relation to short-term accommodation
- Examples:
- Noosa Shire Council in Queensland: local law requiring owners to appoint a property manager or contact person, and doubling council rates for short-term rentals
- Gold Coast Council in Queensland: application fee for short-term rental accommodation
- NSW government: short-term rental accommodation register
- Melbourne City Council: introducing a cap on the number of days per year that properties can be used as short-term rentals, and an annual registration fee of $350.00 per property
- Victorian government: introducing a levy of 7.5% on short-term accommodation booking platforms
- Western Australian government: Short-Term Rental Accommodation Incentive Scheme and proposing a Short-Term Rental Accommodation Register
- Short Stay Accommodation Act in Tasmania
Learn about short term rental properties, including definitions, types, and regulations. Understand the nuances of renting out furnished properties, holiday homes, and more.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
