GST decision time for Airbnb property managers: Are you in or are you out?

Karen Sullivan
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There’s new GST legislation in place for online marketplaces, which includes short-term accommodation platforms like Airbnb, ride-sharing platforms like Uber and delivery services like Uber Eats. These online platforms must now collect 15% GST and return it to Inland Revenue. This ‘app tax’ came into effect on 1 April 2024, and it’s already having an impact on the market.

What does this mean for Airbnb property owners? 

If you own a property that is rented out on Airbnb or other major short-term accommodation platforms, the impact on you will depend on whether you are registered for GST. If you are registered, there should be no difference to you – and in practice you might make more money depending on how the market responds.

If you are not GST registered, because your property earns less than $60,000 a year, the main difference is that you will earn less. The 15% GST paid on your behalf goes to Inland Revenue, and the platform returns 8.5% to you as a refund if you are not GST registered. The overall result is that you will have 6.5% less in your hand from Airbnb revenue – if you don’t raise your prices. 

However, there has reportedly been widespread price increases across Airbnb and similar platforms. If GST registered owners have put their prices up at all, they will make more for the same number of nights. If non-registered owners have raised their prices by more than 6.5%, they will also make more money. 

The new GST rules do not influence your GST registration status. We know that many owners limit nights available for rent to stay below the $60,000 threshold and avoid paying GST on any capital gains when they sell the property. Others choose to register, allowing them to claim a GST deduction when they purchase a property to reduce debt required, and maximise their income throughout its rental tenure. 

What about Airbnb hosting companies and property managers?

Managing short-term rental accommodation is hard work. There’s a lot to do, from arranging access and managing cleaners, to regular maintenance and compliance. It’s especially difficult to do well if you’re not nearby. Many Kiwi property owners choose to outsource this work to professional property managers or specialist hosting companies, which can work very well for everyone involved. The property owner can rent out their holiday house and make some money, without having to be called in the middle of the night by irate guests if a pipe bursts.

These service providers are known as ‘intermediaries’ under the new rules because they sit between the platform and the ‘underlying supplier’ (the property owner). Intermediaries might manage just 10 properties, or 100. They charge a management fee, plus other costs. Some invoice the property owners at the end of the month, while all the Airbnb income goes directly to the client. Other intermediaries receive the Airbnb income, subtract their fees and then pay owners the balance at the end of each month. 

Since their inception, there have been amendments to the rules that allow intermediaries to opt out by agreement with the platform. Any property owners that advertise more than 2,000 nights per year (and therefore have a portfolio of at least six properties) can also choose to opt out and continue to return GST directly.

These owners and intermediaries now have an important decision to make: Are you in, or are you out? 

What are the pros and cons of opting out? 

In or out: This is a very thorny and highly specialised area of taxation, so it’s a decision you’ll need to make based on your own situation.

If your business does not opt out, there are some advantages:

  • The platform deals with Inland Revenue. Each major ecommerce platform will collect and return GST on your behalf, which has a certain simplicity to it. 
  • Your business does not face any risk of getting the GST payment wrong, because the responsibility lies with the platform.

But it’s not all straightforward if you don’t opt out. Your company will need to collect information on which clients are registered and which are not, store it, and keep it up to date, and keep it safe. You will need to notify each affected platform if a client changes their status from unregistered to registered, or vice versa.  

Opting out, on the other hand, will be the better option for many intermediaries:

  • If your business lists properties on your own sites as well as platforms like Airbnb and, opting out will allow you to treat all your bookings the same. For intermediaries that take direct bookings, opting out will often be the preferred choice. Not opting out will mean that direct bookings and platform bookings need different treatment in your systems.
  • You don’t need to keep the platforms up to date on an owner’s GST status.

However, opting out means your business will need to be the one keeping track of owners’ GST registration status and ensuring this is always up to date. You’ll need to capture and store more information on clients and services. This means you’re reliant on owners communicating with you in a timely and accurate way. The business will also be responsible for correctly paying GST, so any shortfall will be up to you to remedy.

What do Airbnb intermediaries need to do?

The first step is having information available for your owner clients, because they will have questions.

When it comes to implementation, you may need to assess your systems. There will be a complex and messy mix of data for any intermediary using several platforms and providing many services. It will take some time and effort to comply with the new rules – this could also be a good time to assess your pricing, both in terms of nightly rates and management fees.

Overall, prices in the short-term accommodation sector look set to rise thanks to these changes. But they do help level the playing field across the accommodation industry, which should ultimately benefit all the professional players in the field.