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  • Airbnb

    Is there GST claimable on purchase of a property to be used for AirBnB ?
    Does the income when it arrives from AirBnB Include GST?
    Can you claim GST on the expenses ?

  • #2
    Yep. Not a residential activity so not exempt.
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    • #3
      And if you have AirBnBs think carefully before turning them into long term rentals. If most tourism revenue in NZ is domestic (+75%) - then Airbnbs can still survive and so too the tourist industry by and large.

      Here's an opinion piece on Stuff - which essentially says we all need a paradigm shift when it comes to valuing what we have here in NZ - i.e. when we travel domestically we should expect to pay what the experience is worth and tour operators probably need to rethink their packages to attract us so we don't just go to yet another beach.

      The example given in the Stuff article is - we'd happily pay to do a walk in another country even when the scenery is underwhelming but we're loathsome to pay for the experience here in NZ.

      We have some of the best sights and tourist experiences in the world and we can now get out and do them without the crowds.

      AirBnBs (particularly in the scenic areas) do not need to swap to long term rentals - the business will be there for them as we wake up to the reality if we want a 'real' holiday (not just yet another trip to the beach) it's going to happen right here in NZ and we've got it all.

      cheers,

      Donna
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      • #4
        Originally posted by Beano View Post
        Is there GST claimable on purchase of a property to be used for AirBnB ?
        Does the income when it arrives from AirBnB Include GST?
        Can you claim GST on the expenses ?
        Generally the main question is , "Would you want an airbnb property to be in the GST net, or is it better to keep out?

        - you might buy for $400,000 plus GST. zero rate or claim the $60k GST back . Great
        - 10 years later you sell it for $920,000 for a couple wanting to retire there. You then pay back $120k GST

        Plus you pay GST on income, but there is no GST on interest expense, so while you can claim GST on some other costs, you end up paying GST every period.

        If over $60k income you have to GST register, but there can be some clever ways around this.

        Ross
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        • #5
          Originally posted by donna View Post
          And if you have AirBnBs think carefully before turning them into long term rentals. If most tourism revenue in NZ is domestic (+75%) - then Airbnbs can still survive and so too the tourist industry by and large.

          Here's an opinion piece on Stuff - which essentially says we all need a paradigm shift when it comes to valuing what we have here in NZ - i.e. when we travel domestically we should expect to pay what the experience is worth and tour operators probably need to rethink their packages to attract us so we don't just go to yet another beach.

          The example given in the Stuff article is - we'd happily pay to do a walk in another country even when the scenery is underwhelming but we're loathsome to pay for the experience here in NZ.

          We have some of the best sights and tourist experiences in the world and we can now get out and do them without the crowds.

          AirBnBs (particularly in the scenic areas) do not need to swap to long term rentals - the business will be there for them as we wake up to the reality if we want a 'real' holiday (not just yet another trip to the beach) it's going to happen right here in NZ and we've got it all.

          cheers,

          Donna
          I think you are misunderstanding these articles about re-calibrating the tourism sector in NZ to cater for domestic tourists (and there have been many). Kiwis may spend thousands to go overseas and want to make sure it is bang for buck - somewhat of a sunk cost fallacy, but if you've come all this way may as well spend a bit more to enjoy it. At the same time, that walk overseas might cost $10 NZD, but the walk in NZ is $50 NZD. Sure, you could also argue that money not being spend on travelling overseas is money that could be spent in NZ, but that would be undervaluing Kiwis' strong aversion to being ripped off. Just look at the dynamics of retail and how many sales and specials there are here. Anecdotally, probably 85%+ of my typical supermarket shop will be items on special.

          The articles also do mention that the expensive tourism activities in NZ are often expensive because their market is willing to pay it, aka it is the market price. Once that market changes, so too will their price need to change.

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          • #6
            Originally posted by bmt View Post
            I think you are misunderstanding these articles about re-calibrating the tourism sector in NZ to cater for domestic tourists (and there have been many). [...]
            Yes. It does appear the article has been misunderstood. A pivot towards domestic tourism is needed and the reality is adjustments need to be made by local operators.

            That said, I understand NZ is in dialogue with Australia, Singapore and Canada over an extended bubble arrangement allowing travel between these countries. The time frame is sketchy - but such an arrangement would at least create some demand for AirBnB properties and tourist operators.

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            • #7
              I did say this:

              and tour operators probably need to rethink their packages to attract us so we don't just go to yet another beach.
              So in my opinion, not only do we need to think less about the cost and more about the experience right here in our own backyard, the industry also needs to come to the party and rethink what they offer and how they market it to Kiwis.

              cheers,

              Donna
              SEARCH PropertyTalk, About PropertyTalk

              BusinessBlogs - the best business articles are found here

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