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.
Oldfarm, Redwood
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)?
A Year In Redwood 
I agree with everything you have said, anyone doing B&B has far higher overheads than someone letting a room long term, laundry, cleaning, wear and tear, letting a room long term lets the government off from providing and building accommodation for students, interns or just workers in the cities so in fact private people are providing what should be provided by the state. But why should these ‘hosts’ get away without paying tax, makes no sense at all.
Thanks for the support Anne
Sorry to hear about all this, Margaret. It seems to me that it’s becoming more and more difficult to run a B&B in Ireland or indeed anywhere in the EU with all the rules and regulations that apply. We would love to do it here but the kitchen requirements are out of reach for us and would turn the heart of our home into something very unhomely. The difference between the two does seem very suptle. How utterly frustrating for you. I see the Dept of Finance has a Twitter account – maybe Tweet them to register your opinion. (Can’t imagine you’d get a response, but you’d never know!)
June, they are making it more difficult to do anything! I have emailed the Dept. of Tourism who told me it was a matter for Dept. of Finance… shall be sending them a copy.
Agree with all of this too. Rural dwellers are a dying breed, I don’t think hosts are recognised for the value they give and for the relationships that are built up with guests to Ireland. I would have sworn that the tax break would have applied. Fight it!!!!
Thank you C! It is all so silly and innocuous … the amount we’ve earned is so so tiny in the scheme of things! Just as well we like meeting the people!
From outside of Ireland – though I visit annually. My family is trying our first AirB&B lodging next week near Kinsale. I had no idea this was all simmering as I was making our travel plans. I wish you all the best and success beyond measure. Also… I’m not able to reach the lodging I had set near Cahir. If that falls through you may hear from me. 🙂
Thank you for your comment Jody. You will I’m sure enjoy the AirBnB experience. We’ve certainly enjoyed it from our side of the fence! Shout if you need help!
Margaret
We were keeping tabs on this last couple of weeks Margaret and thinking of you and Alfie. It’s total non-sense and Revenue have to realise that! You should all come under the rent a room scheme, it makes no sense not to do it as it is highly discriminating against rural areas. In our travels through West Cork last 2 weeks, we have realised how much little villages are suffering and how many of those are simply bucking down under financial pressures. Even those with tourism pull have suffered tremendously with small businesses closing down for lack of trade. How else is rural Ireland to prosper? This rule is just shambles! I’ve nothing against having AirB&B hosts providing revenue info, but it should be held under the rent a room scheme and those making more than 12K should pay their share of taxes, but not before that. I hope somebody is challenging this in the courts! Defo discrimination against rural dwellers.
Thanks for the support Lily. We are trying to lobby… but not sure we will be listened to.
M
Hi M,
Is there a big group looking at the lobbying aspect?
Hi Julia,
Are you a member of the Dublin Air Hosts group? If so Marie on there is preparing a submission.
Margaret
[…] READ ON: AirBnB versus Irish Revenue (A Year In Redwood) […]
Wow – I must admit all this had, indeed, passed me by, and we are currently looking into the possibilities of doing it here.
Hi Matt,
Don’t let the rent a room scheme mess deter you. We’ve met lovely people and have enjoyed the experience… just make sure to keep records of costs etc.
Margaret
Then Revenue clarified the situation and made it clear short-term lets to guests, “including where such accommodation is provided through online accommodation booking sites”, did not fall within the terms of tax relief. Once the clarification was confirmed, Airbnb entered dialogue with Revenue, culminating in it releasing information on all rental income earned by Irish users for the past 15 months.
Thanks for your comment Leo. However, I think there needs to be a clarification on ‘short’ and ‘long’ term. Is taking in students for a series of two week periods over the summer months – long or short term? I’d willing do a two month period of 2 weeks at a time if I had the opportunity – and it would be more than we do now!