Do you have or intend to purchase a vacation property that can be used and/or rented part time? Have you thought about owning an Airbnb, or own one currently and confused about how to declare your income… well we have some answers to your questions.
Any rental income that is generated from short term rentals or yearly leases must be reported on your personal income tax return. Now think about this property (or Airbnb) as a rental business… the income you generate you are also able to deduct expenses related to that income. Make sure you keep all your receipts and speak to a professional about this process but you could expense things such as
New bedding
Toiletries
Dining ware
Property taxes
Insurance
Utilities (heat, hydro, electricity, water)
Cable and internet (if provided to your guests during their stay)
Maintenance costs
Cleaning services
Now, since you are renting this property part time, those expenses have to be calculated in a percentage based on the percent of time the property is being rented out.
IMPORTANT TIP: it is important to set aside 20-30% of your income for tax expenditures. A great program to keep all your accounting in check is to use Quickbooks Intuit. Lastly, short term rentals are subject to HST, so make sure if you have an Airbnb or plan to get one, it is important you set up this step. If you have any other questions pertaining to Airbnb & vacation rentals, let our team know, we can help. Visit us at our website www.luvrealestate.com or call 416-678-1683.
