Inland Revenue proposes tax revamp for short-stay accommodation providers

Short-term accommodation providers will have to fork out $50 tax per night, under Inland Revenue's proposal.

Inland Revenue is proposing a standard nightly amount people who rent out their property as short-term accommodation can claim as costs.

The proposed amount is $50 a night if the host is the home owner and $45 a night if the host rents the property. They may qualify if the space is rented for up to 100 days each year, IRD said.

The tax department is seeking feedback from the public on the proposal.

IRD director of public rulings Susan Price said renting out a property as short-term accommodation qualifies as income and therefore needs to be included in a tax return.

"People renting out a room in their home can claim costs like advertising and a proportion of the expenses for the time the space is rented including things like rates, insurance and cleaning," Price said.

"What we're proposing in our draft determination is a standard, nightly amount to claim as costs."

The new rules have been drafted to simplify tax obligations for people who occasionally host guests such as those who use Airbnb or Bookabach.

"We're also consulting on draft guidance about how the existing rules apply for other short-stay accommodation hosts who can't use the proposed standardised deductions – either because they rent space out for more than 100 nights per year or because the accommodation isn't in their home."