Airbnb

SMSF trustees can use a residential property owned by their SMSF to provide host services on platforms, such as Airbnb.

Things to consider before using a property as Airbnb or Bed and Breakfast:

• check your investment strategy to make sure it allows the host services.
• make sure the existing building insurance policy allows Airbnb host services.

Things to consider after property being used as Airbnb:

• make sure no related parties can use the property as their accommodation.
• the SMSF trustees can not be remunerated for daily management or any other services.
• keep adequate record for when, how long and to whom the host services were provided.

Airbnb taxation treatment in an SMSF: 

• net income will be tax at 15% for accumulation funds or funds in transition to retirement phase.
• net income will be exempt for account based pension funds.

GST Registration:

• GST registration is normally not required.
• GST is required if the following are met:  1. the turnover is more than $75,000  2. Airbnb meets the definition of “commercial residential premises’ in section 195-1.  (ATO ruling GSTR 2012/6).

Airbnb expenses can be paid from the SMSF:

• Motor vehicle expenses: No, car expenses can not be paid from the SMSF as the name of the car registration is not under the SMSF name.
• Phone bills: No,  the phone bill should not be under an SMSF account name.
• Linens (costs of laundry): Yes, invoices must be issued to the SMSF.
• Toiletries for the guests (such as soap, shampoo and conditioner): Yes, but invoices must be issued to the SMSF.
• Food (such as welcome drinks for the guests, etc): Yes, but the invoices need to be issued to the SMSF. It is recommended to buy food and drinks from an Airbnb products provider.
• Cleaning services: Yes if the property is cleaned by non-related parties.  Any cleaning services done by SMSF members/trustees or their relatives must not be paid by the SMSF.

The property used for host services normally is managed by the trustees. The following rules must not be breached:

• in house asset rules: no members and their associate can use the property for any purposes.
• sole propose test: trustees should be aware of the risks of operating Airbnb services and should not conduct a rental business in the SMSF.

Should you have any questions, please feel free to contact us for clarification.