Benjamin Connor
Registered User
- Messages
- 2
Does the fact that I'm using my house as a B&B compromise the PPR exemption so the more interest I claim the more of PPR I forego.
Folks
This Airbnb stuff is utter nonsense on Revenue's part.
If it's below €12k pa, it's "rent-a-room" in my view.
I would happily appeal any assessment issued on foot of Revenue's position and go before and Appeal Commissioner.
In theory it may. In practice, the percentage in any given scenario will be minuscule unless the householder makes a bonanza from AirBnB.
Even then the legalities under which AirBnB arrangements operate may well mean that there is no effect of the PPR exemption if the householder occupies the property concurrently.
You would lose. The original rent-a-room legislation clearly refers to residential accommodation and the contemporaneous expert commentary on it (Judge Irish Income Tax 2001) unequivocally rules out its application to short-term holiday or other casual lettings.
Of course the cost of one's labour is not deductible, the money one receives for one's labour is wages which are also subject to income tax. It makes no sense at all to deduct eg an hourly rate from rental profit, case V and then declare the same amount under case I or IV.
In fact, until prsi on rental income was recently introduced for non-chargeable persons people saved by not having to declare part of their rental income as earned "labour" income.
, often not worth your while if you are paying the higher rate of tax.
No I wouldn't. I believe your analysis is flawed.
Revenue's argument appears to have two legs to it:
- The duration of the stay
- The fact that it might be Case I
Section 216A makes no reference at all to duration, so that argument is spurious. And if one considers the badges of trade in the context of ad hoc Airbnb rentals, I would not like to have to argue that a B&B trade exists.
Interestingly, Airbnb have published their advice from EY on the subject. In their view, "Rent-a-Room" applies (subject to the usual rules).
That's my thinking on it too, particularly because it can be labour intensive. I guess the 'profit' is one's wages. So you have to weigh up if renting a room for a night or 25 Euro, losing say 10 in tax, with 5 Euro costs, is worth 10 Euro for washing, cleaning, greeting and making beds.
Revenue's own [broken link removed] say this:
"Income from guest accommodation such as a bed and breakfast or a guesthouse operation is generally treated as trading income (Case 1) and not rental income (Case V). This type of income, even where it is under the relevant limit, does not qualify for rent-a-room relief"
My view is that these Airbnb don't fall into Case V and therefore don't qualify for section 216A.
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