Accounting Treatment for Short-Term Rental Management Agencies under the New Airbnb GST Regulations

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New GST Rules Effective from April 1, 2024

Starting April 1, 2024, anyone providing accommodation or ridesharing services through online platforms in New Zealand will be affected by new GST (Goods and Services Tax) rules.

What Are the New Regulations?

Before April 1, 2024, short-term rental property owners or Uber drivers with annual turnover below the $60,000 GST registration threshold were not required to register for or pay GST. However, the new regulations stipulate that all accommodation and transport services facilitated through online platforms must be subject to GST, regardless of whether the property owner or driver is GST-registered. Non-GST registered service providers can receive a flat-rate credit of 8.5% based on their service income.

Impact of the New Rules on Short-Term Rental Management Agencies

The new regulations present challenges for short-term rental management agencies in terms of accounting treatment, especially when dealing with various online platforms and different property owners. Short-term rental management agencies can enter into agreements with online platforms stating that they will collect and pay the 15% GST themselves. To do so, the following conditions must be met:

  • You must be a New Zealand tax resident.
  • You must be managing accommodation services provided by property owners on more than one online platform.
  • You must use an electronic system to manage guest bookings automatically. Common examples include an API (Application Programming Interface) that facilitates information exchange between your management system and the online platforms, or you use property management software to manage bookings.

GST Filing for Short-Term Rental Management Agencies

If you have signed an agreement with the online platform to collect and pay GST yourself, you will be considered as providing accommodation services to the online platform using the property owner’s property. In your GST return, you must include this accommodation service income and declare and pay 15% GST on it. At the same time, you should continue to include the management fees and other charges collected from property owners in your GST return.

For non-GST registered property owners, make an 8.5% credit adjustment based on the accommodation service price in your GST return, and then transfer the refunded amount to the property owner. This 8.5% refund is not subject to income tax.

 

Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact The Number Studio office.