Airbnb, the global platform for unique accommodations and experiences, breaks the barriers of conventional property renting – it allows users to share their private homes, apartments, and unique accommodations around the world. However, both property owners and Airbnb users should be aware of the obligation to account for short-term rentals to avoid unpleasant legal and financial consequences.
What exactly is Airbnb?
Airbnb is an online platform for the short-term rental of private accommodations that has recently become exceptionally popular. It allows individuals to rent out their homes to people looking for a place to stay for a few days. For travelers, this is often a great and financially attractive alternative to hotels and guesthouses. More and more tourists are opting to seek accommodations with private individuals instead of commercial establishments, and more and more people are offering this possibility. The concept is simple: if there are vacant apartments or rooms and some money is to be made, they are rented out to tourists wishing to explore the city or live there for a certain period.
Since it is a relatively new form of renting, not everyone is informed about the tax aspects. The following explains how tax for Airbnb rentals should be accounted for.
Airbnb tax – who has to pay?
Under German law, rental income is subject to income tax according to § 21 of the Income Tax Act. This includes regular rents the tenant pays to the property owner along with all additional costs, as well as one-time payments for providing an apartment or room, for example, via the Airbnb platform or another.
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So if there is free space and a decision is made to rent it out via the Airbnb platform, income tax on the income earned must be expected. The German tax authority will not check the origin of these payments, but considers them rental income that must be indicated in the tax return in Annex V.
Renting via Airbnb – when is no tax paid?
No need to worry about tax issues if a room or apartment is rented out once or very occasionally. In such cases, the income generated is not taxed as long as it does not exceed the established limit. The Federal Ministry of Finance has stipulated that tax liability only begins at earnings of more than 520 euros a year. If less is earned in a year, these earnings do not even need to be indicated in the tax return.
However, it should be noted that with rental income of just 521 euros per year, taxes are levied on the total income earned. The amount of tax depends on various factors, including the individual’s tax rate, which depends on other income.
Income from renting, renting out apartments, houses, or subletting rooms is only taxable if the total income exceeds the established basic allowance threshold, which is currently €12,084 for singles or €24,168 for jointly assessed married couples. If this threshold is not exceeded in a given year, no taxes on Airbnb rental income must be paid.
Tax on Airbnb rental – what can be deducted?
Some expenses recorded in the tax return for Airbnb rentals can be deducted, but they must be directly related to the income generated from renting. They can be indicated in the annual tax return as income costs, including:
- A portion of the rent for the apartment (proportional to the use of the apartment by the guests),
- Utility costs for the apartment like heating, water, or gas (proportional to the use of the apartment by the guests),
- Cleaning costs,
- Purchases for the guests,
- Expenses for repairs and maintenance,
- Fees charged by the Airbnb platform.
This means that the higher the costs for generating income, the lower the taxable income can be. It is advisable to consider all expenses incurred in the tax return. Receipts, utility bills, and rental agreements should be kept. It is best if all payments for cleaning and repair services are made by bank transfer, rather than in cash, to prove the expenses related to the income and be able to deduct them in the tax return.
Do you want to complete all tax formalities in Germany quickly and conveniently? Use the tax filing app Taxando – it allows you to account for all income so that the Airbnb tax can be paid without any problems.
Maciej Szewczyk
He gained experience as a consultant on IT projects for many international companies. In 2017, he founded the startup taxando GmbH, where he developed the innovative tax app Taxando, which simplifies the filing of annual tax returns.
Maciej Szewczyk combines technological expertise with in-depth knowledge of tax regulations, making him an expert in his field. In his private life, he is a happy husband and father and lives with his family in Berlin.
