Tax advisers are not surprised that Revenue appears to be investigating some homeowners who are letting rooms to visitors through accommodation website Airbnb.
In 2015 news that the company would have to provide information to Revenue sparked a long drawn-out public row, based on the fact that people believed there was a tax break for letting rooms in their homes. The incentive did not apply in this case, so the upshot was that the income was taxable.
Revenue is not pulling any punches. Its notices tell the householders that they are “under investigation” and the relevant income includes that from short-term letting. The letters also advise taxpayers to provide Revenue with all necessary records and bank statements.
There could be quite a pool of money sloshing around here. According to some estimates, around 23,000 Irish householders earned a total of €115 million from Airbnb rentals last year.
That is an average of €5,000 each in 2017 – not a king’s ransom but not a sum to be sneezed at either, particularly for the average Irish homeowner.
No one is suggesting that everyone who lets a room on Airbnb doesn’t tell the taxman. In fact, plenty probably do, particularly the bigger earners, of which there are supposedly quite a few.
Nonetheless, Revenue’s response to questions over the weekend indicates that it believes there is a risk that some have not paid everything that is due.
Revenue has information from Airbnb on its Irish listings. Given the high-profile row about this three years ago, anyone who has not made a return should themselves not be surprised when the taxman comes calling.