Airbnb and short term rentals GST
Navigating the new "App Tax" rules, the $60k threshold, and the 8.5% flat rate credit for unregistered hosts.
If you rent out your bach, investment property, or a spare room on platforms like Airbnb, Bookabach, or Holiday Houses, you are providing "taxable supplies".
From 1 April 2024, the "App Tax" rules (Platform Economy rules) completely changed how GST is applied to these bookings in New Zealand.
The App Tax Rule
The Marketplace Operator (e.g., Airbnb, Booking.com) must collect and pay GST (15%) on all accommodation bookings, regardless of whether you (the host) are registered for GST or not. Split 15% on a nightly rate with the GST calculator.
How the App Tax Works (Unregistered Host)
The 8.5% credit is calculated on the GST exclusive supply value, not the GST inclusive total. Example: on a $200 nightly rate the platform collects $30 GST from the guest. The unregistered host receives $217 ($200 plus the $17 credit), and $13 goes to IRD.
Host Status Scenarios
If your turnover is under $60,000, you don't need to register for GST.
- ✓ You: Do not charge GST to guests directly.
- ✓ The Platform: Charges 15% GST on the listing price.
- ✓ The Credit: The Platform passes on an 8.5% flat rate credit to you. You may treat this credit as excluded income, which is not subject to income tax, or you can elect to treat it as assessable income. If you treat it as excluded income, deduct the expenses for your marketplace nights on a GST exclusive basis.
If your total taxable supplies exceed $60,000, you must register for GST.
- ✓ You: File GST returns as normal.
- ✓ The Platform: Still collects the 15% GST and pays it to IRD.
- ✓ Your Return: You report the sale as zero rated (because the platform paid the tax). You claim GST on your expenses (cleaning, rates, insurance).
- ✗ No Credit: You do NOT receive the 8.5% flat rate credit.
Mixed Use Asset Rules (Audit Risk)
The mixed use asset rules apply for the year when the bach was used to earn income, used privately (any private use counts, including family stays or mates rates under 80% of market rent), and sat empty for at least 62 days. If all three are true:
- You must apportion your expenses between business and private use.
- If your gross rental income is less than 2% of the property's value, loss quarantining applies: the excess expenditure is not lost, it is carried forward to offset future profits from the same property. You cannot use it against your other income in the current year.
Can I Opt Out?
You can only opt out of the platform rules in limited cases: you list more than 2,000 nights of accommodation on a single marketplace in a 12 month period (or reasonably expect to), or you are a non individual making more than $500,000 of taxable supplies in a 12 month period. Listing intermediaries such as property managers have separate rules. For almost everyone else, including small Airbnb and Bookabach hosts, the platform must collect the tax. You cannot opt out just because you don't like the new system.
Frequently Asked Questions
If your total turnover from taxable supplies (including the Airbnb rent) is under $60,000 in a 12 month period, you do not need to register. However, the platform (Airbnb) will still collect 15% GST from the guest under the new App Tax rules. When you are over the line, start with how to register for GST in NZ.
If you are an unregistered host, the platform collects 15% GST on the booking. They send 6.5% of the GST exclusive value to IRD and pass 8.5% back to you as a flat rate credit. You may treat that credit as excluded income, which is not subject to income tax, or elect to treat it as assessable income. If you treat it as excluded income, deduct expenses for marketplace nights on a GST exclusive basis.
Only in limited cases. You can opt out if you list more than 2,000 nights of accommodation on a single marketplace in a 12 month period (or reasonably expect to), or if you are a non individual making more than $500,000 of taxable supplies in a 12 month period. Listing intermediaries such as property managers have separate rules. Standard small Airbnb hosts cannot opt out; the platform must collect the tax.