Airbnb (1 Viewer)

[GO]

I think a bnb is about 35 a night

 

[7 - No tomorrow]

I think a bnb is about 35 a night

Ah, way more than that. More like 70 or 80, I'd have thought.
But how much of that is Revenue taking?

 

[7 - No tomorrow]

The ol' BnBs on Gardiners St were the only way you and your bird could get a quiet place to ride back when we were all living with our Mams

 

[pete]

people having to pay tax on taxable income shocker

 

[7 - No tomorrow]

people having to pay tax on taxable income shocker

51% tho?

 

[pete]

51% tho?

Top rate of tax + USC @ 7% and PRSI @ 4%. Same as you'd pay on every extra € in your regular salary.

 

[Unicron]

Ah, way more than that. More like 70 or 80, I'd have thought.
But how much of that is Revenue taking?

If the B&B is a limited company I imagine then it'd be charged at the corporation tax rate and if the owner would be charged tax on their wages/drawings, if it's run as a sole trader you'd pay income tax based on how much profit you make, your profit essentially being your salary.

 

[7 - No tomorrow]

Top rate of tax + USC @ 7% and PRSI @ 4%. Same as you'd pay on every extra € in your regular salary.

Right
If you make 30-40k already

 

[Unicron]

Top rate of tax + USC @ 7% and PRSI @ 4%. Same as you'd pay on every extra € in your regular salary.

One thing that confuses me, if someone is in the lower tax band but was in a position to airbnb a room now and again and that income doesn't put them into a higher band would they still pay the 51 or would it be lower band plus the extras? And if they were charged 51 initially could they claim it back when they do their self assessment at the end of the year?

 

[7 - No tomorrow]

If the B&B is a limited company I imagine then it'd be charged at the corporation tax rate and if the owner would be charged tax on their wages/drawings, if it's run as a sole trader you'd pay income tax based on how much profit you make, your profit essentially being your salary.

This is what I expected more.
You're maybe paying cleaners to come in, you're buying towels and all sorts of gear. Furniture maybe.
Gotta be some write offs there.

 

[pete]

As an individual, if your gross income is €33,800 or less it's 20% + 7% + 4%, then 40% + 7% + 5% on everything over that. Obviously more complicated if you're not single

 

[7 - No tomorrow]

If nothing else it's a reminder how anyone pulling a wage is getting absolutely shafted

 

[pete]

This is what I expected more.
You're maybe paying cleaners to come in, you're buying towels and all sorts of gear. Furniture maybe.
Gotta be some write offs there.

I'd assume so. Only the profits should count as taxable income.

 

[pete]

One thing that confuses me, if someone is in the lower tax band but was in a position to airbnb a room now and again and that income doesn't put them into a higher band would they still pay the 51 or would it be lower band plus the extras? And if they were charged 51 initially could they claim it back when they do their self assessment at the end of the year?

I don't think you'd pay anything on the additional income until the self assessment form goes in, then you get a bill for any outstanding tax.

 

[Unicron]

This is what I expected more.
You're maybe paying cleaners to come in, you're buying towels and all sorts of gear. Furniture maybe.
Gotta be some write offs there.

Yeah, all of that should be expensible. And notionally an airbnber should be able to write those off too once they get their tax affairs in order. Like if you're renting a room for 60, but it's costing you 40 to rent it then you should only pay tax on the 20. But if you can't support the argument that you've got expenses then the tax man will hit you on everything you take in

But what will likely happen is that people will decide it's not worth the hassle to do the forms etc.

 

[pete]

The forms are easy enough. Keeping track of what's coming in and what's going out is the hard part.

 

[Unicron]

The forms are easy enough. Keeping track of what's coming in and what's going out is the hard part.

This is where people are going to get stung, especially if they thought it was off the books money.

 

[7 - No tomorrow]

I have no idea what people here do

Cannot imagine that the IRS is not wetting its beak though

 

[pete]

How It Works For Me
I rent the whole house. I rent it out for about €500 a day depending on the time of year. What I then do is find myself a house on Airbnb that is either in the countryside or in another country and rent that. This is where the arbertage bit comes in.

As you can see in the example below I found just as nice a house that is only about 100km away and which is only €40 per night. By moving a little down the road I am able to make a €400 profit per night and slip that in to the mortgage kitty. Do that 10 nights a month and you have a very compelling argument.

And an interesting chat with the tax man to look forward to.

Airbnb Arbitrage - How To Pay Off Your Mortgage In Half The Time - Lovin Trends

 

[pete]

I have no idea what people here do

Cannot imagine that the IRS is not wetting its beak though

All seems perfectly clear...

How do taxes work for hosts? | Airbnb Help Centre