Short-stay hosting is taxable income, and once it scales it can drag in GST too, which is where a lot of hosts get caught. Here is what to declare, what you can claim, and why the $60,000 line matters more for short-stay than for long-term rentals.
Quick answer
Income from Airbnb and other short-stay letting is taxable and goes on your tax return. You can claim the expenses that relate to the hosting, apportioned for any private use. And because short-stay accommodation is a taxable supply for GST (unlike long-term residential rent), crossing $60,000 of turnover means GST registration — with real consequences when you eventually sell.
So short-stay sits in an awkward middle ground: taxed like a business, but attached to a residential property.
The detail, in plain English
For income tax, you declare your gross short-stay earnings and claim the related costs. If you host a room in your own home, or let the whole house only part of the year, you apportion costs between income-earning use and private use. Common deductible costs include a share of rates, insurance, power, internet, consumables, cleaning, platform fees, and depreciation on furniture and chattels.
The bigger trap is GST. Long-term residential rent is exempt from GST, but short-stay accommodation is a taxable supply. So as a host you can be pulled into the GST net once your taxable turnover crosses $60,000 in a 12-month period. That is more than just adding 15% to nightly rates — once a property is in the GST system, selling it later can trigger GST on the sale, which is a large and often unexpected cost.
A simple example
A host lets a self-contained sleepout year-round and earns $28,000. Costs directly tied to the hosting come to $9,000.
| Line | Amount |
|---|---|
| Short-stay income | $28,000 |
| Deductible hosting expenses | $9,000 |
| Taxable short-stay profit | $19,000 |
| Over $60,000 turnover? | No — GST not required |
Here the host pays income tax on the $19,000 profit and is well under the GST line, so GST does not apply. If that same host added more rooms or properties and turnover climbed past $60,000, GST registration would become compulsory, and the eventual sale of the property would need careful GST planning.
Common mistakes to avoid
- Treating it like long-term rent for GST. Short-stay is a taxable supply; long-term residential rent is not.
- Not declaring the income because it feels like a side gig. Platforms report, and undeclared income is a risk not worth taking.
- Claiming 100% of household costs when the space is also used privately — costs must be apportioned.
- Ignoring the GST-on-sale consequence of registering a property for GST.
- Forgetting the bright-line and ring-fencing rules can still apply to the underlying property.
Where this fits in your return
Short-stay income lands on your IR3 as part of your taxable income. If you are GST-registered, the 15% on bookings and the GST on related costs run through your GST returns separately. The property also sits under the wider property rules — the bright-line test on sale and rental loss ring-fencing can both be relevant depending on how the property is used. Pulling these threads together is what stops a short-stay arrangement creating a tax surprise down the track.
How Fernway can help
We work out the right income and expense split for your hosting, keep you on the correct side of the GST line, and flag the GST-on-sale and bright-line consequences before you make decisions, not after. If registering for GST would help or hurt, we will tell you plainly. Fixed fee, quoted up front.
This is general information, not personalised tax advice. Your situation may differ, so book a free review to discuss it with us or check ird.govt.nz.
This is general information, not personalised tax advice.See our full disclaimer.