As the Sharing Economy continues to grow, there is a growing attraction to rent out one of your bedrooms for short term stays. It is important to understand the implications of such an arrangement and the importance of keeping proper records. Not only of the income received and expenses incurred, but also of the number of days there was a guest.

The following information is only a guide. Individual circumstances may have a bearing on the result.

The information is structured more for the situation where only a room, within your home, is rented. As opposed to your entire home.


The income received, when renting out a room in your home, through a Sharing website (like AirBNB), is assessable and will need to be declared in your tax return. Due to the nature of the income, there is no need to have an Australian Business Number (ABN). But if you are transacting with Businesses, then you may need to register for an ABN. There is no need to be registered for GST, and there is also the threshold of your gross income needing to exceed $75,000, to be obligated to be GST Registered.

The income would be treated as Rental Income and included in your tax return under that item.


Expenses that you can claim are numerous, but the type of expense it is, will determine whether you are able to claim all of the expense or only part of the expense.

Expenses that may be 100% claimable:

  • Facilitator’s Fees (administration fee from online/website organisation)
  • Advertising
  • Cleaning
  • Bedding, toiletries only available for use by guests.


Expenses that will need to be apportioned (that you can not claim 100% of), would include:

  • Council rates
  • Water rates
  • Insurance
  • Electricity
  • Gas
  • Mortgage interest
  • Internet.


To calculate what percentage of these expenses you can claim, you would use the area of the room being used by the guest over the total area of the house. Plus you would take 50% of the common areas that the guests have access to, over the total area of the house. The number of days that the room was rented out, also has a bearing on this calculation.


There are a number of factors to consider, to determine whether this is a beneficially venture to enter into. Please discuss with us, so we can consider your personal circumstances, so that we can help you decide whether this is worthwhile.

It is important to note that by earning income from your home, this will have a direct effect on your ability to claim the Capital Gains Tax Main Residence Exemption. This means that when you sell your home, where normally it would not be subject to Capital Gains Tax, now it will be.