Airbnb in talks with Government on tax-free threshold

Airbnb has said it is in discussions with the Government about potentially creating a new tax-free threshold which would see hosts keep more of their home-sharing income.

Launching a report on the impacts of home-sharing in Ireland, Airbnb head of public policy Patrick Robinson said the company has been in talks with officials from various Government departments as recently as within the last few weeks, and one topic seemingly up for debate is the level of tax paid by Airbnb hosts.

‘Shocked’

Mr Robinson said those letting a property or room through the website were “shocked” when Revenue sent out a notice in August advising them to pay tax on rental income backdated to May 2014.

The company was subsequently unsuccessful in attempts to persuade the Government to categorise Airbnb hosts in the rent-a-room scheme, which sets a tax-free threshold of €12,000 for long-term rental earnings, but a new option could become available at a future stage.

"In terms of the tax incentive, that's an ongoing conversation. I think the last meeting was a few weeks ago," Mr Robinson told The Irish Times.

“We suggested a few ideas, they suggested a degree of openness to coming up with something that would work for hosts and would fit the new collaborative economy.

Sharing economy

“The Government has said they think that something at a lower level might be appropriate, they’ve told us that a threshold for the sharing economy might need to be at a lower level than rent-a-room which is there for long-term accommodation so the amount of income may be significant,” he added, without giving any indication of the exact threshold proposed.

He confirmed that some Airbnb hosts had terminated their link with the company after being made aware of the necessity to declare rental income, but said the numbers were “very, very low”.

The home-sharing report, which was conducted in partnership with economist David McWilliams, suggests that Airbnb’s operations in Ireland have contributed €202 million towards the local economy - money which the company claims has supported over 2,000 jobs.

7,200 hosts

There are now approximately 7,200 hosts in Ireland who have catered for 419,000 guests since 2009, with the majority choosing to visit Dublin over any other region.

The largest proportion of hosts are high earners, with income of over €42,201, and visitors spent an average of €561 on their trips during the study period of October 2014 to September 2015.

Speaking at the launch event, Mr McWilliams described the “economic revolution” which has resulted from Airbnb’s entry into the hospitality market, and said he believes the company’s exponential growth - which has seen the number of Irish hosts more than double annually since 2010 - will continue.