If you live in Ireland you would have had to be living in a bubble this past week not to be aware of all the controversy regarding AirBnB and Irish Revenue.
Let me explain for those not living here…. AirBnB have set up their European headquarters in Dublin as of May 2014, so they now have to abide by Irish Revenue rules. All fine and dandy.
However, most of the people who are ‘hosting’ via the AirBnB website were under the impression that they could earn up to €12k without having to pay tax on it. This was under what Irish Revenue call the ‘rent a room’ scheme. This past week it has emerged that this was an erroneous believe, and that AirBnB hosting cannot be classified under this tax scheme.
The radio, the newspaper, social media sites have been full of the story. Labels such as tax evaders have been levelled at AirBnB hosts. Rants have been had about data protection etc. etc. as AirBnB are now obliged to reveal details of all their Irish hosts to the Irish Revenue.
I thought I’d share our thoughts on the whole thing.
Yes, we too thought that the hosting would come in under this ‘rent a room’ scheme.
The ‘rent a room’ scheme allows a homeowner to rent out a room, or many rooms, in their home to students, interns or professionals, TAX FREE, as long as they do not earn over the magical €12,000 per annum. Revenue’s argument is that in the above scenario the person renting the room is a ‘resident’ whereas under the AirBnB scenario they are a ‘guest’. The argument further continues that because they are a ‘guest’ it is now a ‘trade’.
To be honest, it is all very stilted towards city dwellers. We’d gladly be surrogate parents to a student or intern, if there was the opportunity.
Living in prime agricultural/rural Ireland, there are no hospitals or industry within a 40 mile radius. There is a massive exodus of students from here to the cities every Sunday during term time…. heading off to line the pockets of the ‘non-trading’ ‘rent a room’ folks.
Parts of rural Ireland are dead during the week… waiting patiently for the young people to come home again at the weekend.
Can anyone explain to me what’s not a ‘trade’ about renting a room to a student, intern or professional?
We fail to see the difference.
The running costs for what we do are probably more than the ‘resident’ costs…. changing sheets and towels more often!
Here in our little pocket of North Tipperary there are no jobs. There is no local factory that provides employment. Everything is based on farming – and there are only so many jobs in that sector too.
We feel that what guests we do entice into the area are at least contributing somewhat to the local economy. We are buying more to accommodate them. They are buying/spending in the community. The visits to the local pub, and the major Friday night attraction of the old time dancing at the GAA hall, all give a little boost to the economy.
We have a couple of guests coming next week to research their family who emigrated from our village, Lorrha. The local Historical Society have already provided them with so much information. The guests are overwhelmed with the generosity of people… and they haven’t even arrived yet.
We are rather proud that one guest who came and stayed last summer, liked the area so much they bought a property and have moved here, have set up a business, and again are boosting the local economy by another little bit.
Our little B&B venture has become a community venture.
Don’t get us wrong. We have no objection to paying taxes. Oh, and by the way, we’ve earned nothing close to €12k. Way way below it in fact. It is just the total and utter confusion that has been caused by this.
In fact, now that I’ve written all this down… maybe there should be a tax break for bringing people into an otherwise neglected part of the country?
Are you listening Mr. Noonan (our Minister for Finance)?