Not GST registered and rent a holiday home ?
Thereโs a handful of really important things to remember if you own a property that you rent out for short term or holiday accommodation using Airbnb or bookabach.co.nz or holidayhomes.co.nz etc, and ๐ฒ๐จ๐ฎ ๐๐ซ๐ ๐๐๐ ๐๐๐ ๐ซ๐๐ ๐ข๐ฌ๐ญ๐๐ซ๐๐. By all accounts these rules are tripping a few people up, so here some things to keep in mind:
๐ If you havenโt already, you need to tell the online platform that you are not GST registered. That way they will know to pay you the โflat rate creditโ of 8.5% credit, which will offset a large part of the 15% GST they return to the IRD in relation to bookings at your property. You should then see this credit being applied to your account each time the platform issues you with a statement;
๐ This is important! Remember that you are still not actually GST registered. Although the platform will now be returning GST on income received from your property, this does not mean you have to pay GST when you sell the property. Unless you actually register for GST, or become required to register (because your turnover exceeds $60,000) you should not be required to pay GST when you sell the property;
๐If you start to wonder whether it would be better to register for GST but are below $60,000 turnover, be very careful before deciding to GST register. If you register for GST the sale of the property may well be subject to GST, potentially costing you many thousands of dollars;
๐Some platforms have decided to simply add 15% on to the price your property was previously listed at. This is despite you actually only effectively paying 6.5% GST on your income from the property (15% minus the 8.5% credit you receive). So you may find your occupancy drops as you my now seem more expensive relative to some of your competition. You just need to be aware you are not suffering a 15% GST cost, only a 6.5% GST cost so if anything perhaps your price needs to be raised 6.5%;
๐The normal rule when providing short term accommodation other than through a platform is that if people are going to stay for more than 4 weeks you will effectively only need to charge and account for 9% GST on the income earned. However under the platform rules the platform will simply keep accounting for 15% GST on the accommodation charges even where the occupancy is longer than 4 weeks. Unfortunately there probably isnโt anything you can do about this when renting out via a platform.
๐๐ฒ ๐๐๐ซ๐ค ๐๐๐ฏ๐ข๐๐ฌ, ๐๐๐ฑ ๐๐ฉ๐๐๐ข๐๐ฅ๐ข๐ฌ๐ญ