People who provide short stay accommodation through an online marketplace in New Zealand, such as Airbnb or booking.com, will be affected by GST changes from 1 April 2024.

There is no GST on long-term residential rent. However, this is not the case for short-term rentals such as hotels, motels and Airbnb. Generally, if the income earned from this short-stay accommodation is under $60,000 in 12 months then you would not need to be registered for GST and pay GST to IRD.

However, from 1 April 2024, the electronic marketplace is required to collect and pay 15% GST on all services provided through their platform. For providers of accommodation, this means:

If you are not GST-registered, the electronic marketplace deducts 8.5% tax from the supply and passes this on to you as a credit. This credit is meant to be approximately the GST that could be claimed if the provider was GST registered. They will also need to include this additional income in their income tax returns.

If you are GST registered, transactions between the electronic marketplace and the property owner are zero-rated for GST. This means GST will no longer have to be paid on the rent you receive from Airbnb, though you will receive a reduced amount, net of GST. This income will still need to be included in your GST return but then backed out under the zero-rating box of the return.

For example, if Rueben is GST-registered and rents out a property via Airbnb for $100 a night. Airbnb would charge $115 a night to the guest. Airbnb would pay the $15 GST to IRD and pay the balance to Craig. The balance paid to Craig is zero-rated for GST and he would include the $100 as zero-rated income.

I recommend that you speak with your accountant to work out how it applies to your individual situation.

Any questions don’t hesitate to contact us.