Airbnb and GST Collection in NZ
Starting 1 April 2024, Airbnb will be required to collect and pay 15% GST on the accommodation price and cleaning fees for listings in New Zealand. This change is part of new GST Marketplace Rules from Inland Revenue (IRD). Here’s what you need to know as an Airbnb host.
What’s Changing for Airbnb Hosts
If You’re Not GST Registered
If you’re not GST registered or haven’t given Airbnb your GST number, Airbnb will collect 15% GST from your guests. Airbnb will then give you an 8.5% flat-rate credit to cover the GST on your costs, like cleaning or maintenance. The remaining 6.5% GST will be sent directly to IRD by Airbnb. You’ll see this flat-rate credit in your Gross Earnings tab in your Airbnb account, under ‘Host remitted tax.’
If You’re GST Registered
If you’re GST registered and have given Airbnb your GST number, Airbnb will still collect and pay 15% GST on the accommodation price and cleaning fees. However, you should stop sending GST to IRD for Airbnb bookings. Airbnb will handle this for you. You won’t get the flat-rate credit but can still claim GST on your expenses in your own GST return.
Opting Out of the Marketplace Rules
Some GST-registered hosts can opt out of the new rules. You may qualify if:
• You expect to have 2,000 or more nights of accommodation available on Airbnb in a year.
• You list accommodation services for other hosts on Airbnb.
• You are a business that expects to make more than $500,000 NZD in a year.
If you think you qualify for the opt-out, contact Airbnb’s Community Support team.
How to Update Your GST Information
If you’re GST registered and need to update your GST number, follow these steps:
1. Go to Account and select Taxes.
2. Click Add VAT ID number and fill out the form.
3. Make sure the GST number used for your Airbnb listings is correct.
What is the Tax Base for the 15% GST?
The 15% GST is calculated on the total price for accommodation and cleaning fees. Airbnb’s service fees are calculated separately, excluding taxes.
What Happens if You’ve Been Paying GST to IRD?
If you’ve been paying GST directly to IRD for Airbnb bookings and don’t qualify for the opt-out, you should stop doing so for bookings made after 1 April 2024. Instead, these bookings should be treated as a zero-rated supply on your GST return. You’ll still be able to claim GST on your business expenses.
When is GST Collected?
Airbnb will collect GST when the guest books the accommodation, not when they check in. If the booking is cancelled or changed, the GST will also be adjusted at that time.
Where to Find GST Information in Your Account
To see how much GST Airbnb has collected, go to the Gross Earnings tab in your Transaction History. Look for the ‘Show all paid’ section at the bottom.
Do You Need to Register for GST?
If your total income from all taxable activities (including Airbnb) is over $60,000, you must register for GST with IRD. This includes rental income, business income, and self-employed work.
If you’re unsure if you need to register for GST, contact Cambridge Accountants. We can help you determine if you need to register and guide you through the registration process.
Final Thoughts: Get Your Taxes in Order
With the new GST Marketplace Rules starting 1 April 2024, it’s important for Airbnb hosts to understand how this will affect their GST obligations. If you’re unsure about your situation, need help updating your GST details, or aren’t sure if you need to register for GST, contact Cambridge Accountants today. Our team can help you navigate these changes and make sure your taxes are in order.
