Last Updated on January 30, 2024 by Kristina Valcheva
Renting out your holiday home or buy-to-let on a home-sharing website such as Airbnb or Vrbo can yield attractive returns.
However, tax on Airbnb property abroad can be perplexing.
Many overseas landlords don’t realize how much tax they owe as a host. Are you getting all of your tax breaks?
We’ve answered some of the most common tax questions from short-term rental hosts with properties abroad like you.
Here is what you need to know about tax on Airbnb property abroad.
Do I have to pay taxes on Airbnb income?
Yes, in general, Airbnb income is taxable. If you are renting out your property abroad, you have to pay income tax on it.
In general, you will be able to deduct some of the allowable expenses, such as mortgage interest, rates, insurance, and so on.
How do I report Airbnb income on a tax return if I own an overseas property?
Compliance with the tax on Airbnb property abroad is essential to avoid legal issues and financial setbacks.
If you are renting an overseas property, you are obliged to file an income tax return not only in your home country but also abroad – where your property is.
Airbnb rentals are involved in the national tax system.
What’s more, Airbnb recently revealed that they are sharing hosts’ data with the tax authorities.
Landlords should fill out their Airbnb tax returns appropriately to avoid government penalties.
Will I be taxed twice?
You won’t be taxed twice. If there is a tax treaty between the two countries, you should not be double-taxed.
Got questions? Request a free callback from a tax expert.
How much taxes do I pay on my Airbnb rental income?
The amount of taxes you must pay will be determined by your gross rental income as well as any deductible expenses you may be able to claim. It also depends on the income tax rates in the country where your property is.
Allowable expenses lower your taxable income so that you pay less tax in the end.
What expenses can I deduct from my Airbnb income?
Most expenses that you can deduct are similar for all countries including:
- purchase costs (including notary fees)
- land registry taxes
- depreciation of the building
- depreciation of the furniture
- interest on a loan
- facility charges
- management agency’s fees
- letting agency’s fees
- cleaning, maintenance fees, and repair costs
- utilities ( gas, electricity, water, TV, internet)
- accountant’s fees
- advertising fees
- property insurance fees
- a “maintenance” trip (to check your property)
- local taxes
May I receive a tax form from Airbnb?
Yes, you may receive a tax form from Airbnb.
We encourage you to seek advice from a property tax professional if you need help reporting your Airbnb income.
They should also send you a form if taxes were withheld from your payouts, so you can claim them on your tax return.
If I don’t get a notice or tax form, do I still owe taxes?
If you do not receive a tax form, this does not mean that you do not owe income taxes.
Your host site reports your income to the tax authorities, so you must report the same income when you file your property tax return.
Does Airbnb/Vrbo collect taxes on my behalf?
Each listing site has its own income tax withholding rules.
Airbnb and VRBO ask for taxpayer information from hosts because they must disclose it to the tax authorities in the respective country.
Airbnb’s policy is that if you do not provide them with accurate tax information, they will deduct income taxes from your payouts. The amount they withhold is between 24% and 28%, which is likely more than you owe.
If Airbnb withheld income from your payments, you can claim it on your tax return as a credit. These sites should also send you a tax form if you had taxes withheld from your payouts, so you can claim it on your income tax return.
But the most important thing you can do is to simply report your rental income on your tax return.
What about local taxes?
Depending on where your property is, you may also be required to pay local taxes on your Airbnb earnings. Sales tax and occupancy tax are common local taxes that Airbnb hosts must pay.
In some countries, Airbnb may collect and remit occupancy tax on your behalf, often known as a hotel tax, lodging tax, or transient occupancy tax. This indicates that these taxes will be added to a guest’s bill automatically.
Still, as an Airbnb host, you are ultimately responsible for meeting your local tax requirements. As a result, even if Airbnb does not collect local taxes on your behalf, you must pay them.
To find out what taxes you’ll have to pay, contact the tax authorities in the area where your property is located.
Where can I see my Airbnb earnings for tax purposes?
Simply navigate to the Settings page and select “Transaction History” to view all of your Airbnb earnings information. Once there, you can sort transactions by payout method, listing, and date.
You will then be able to see completed payouts, upcoming payouts, and gross earnings. This page also allows you to export your earnings and transaction history into a spreadsheet for use when filing your income tax return.
Why do you need to keep all the records of your rental periods?
If you want to properly complete your Airbnb tax return, you must keep accurate records of when you rented out your house. You will also need to keep the income documents and receipts for all your expenses.
In addition to the dates your property was rented out on the Airbnb platform, you’ll need to keep track of the days you occupied it yourself.
If your property is located abroad – in France, Spain, Germany, the UK, the USA, Ireland, Hungary, and Poland, check out the most important information you need to know below.
France
If I am a non-resident, earning Airbnb income from France, do I need to declare it and file a French tax return?
Rent earned via Airbnb is taxed in the same way as furnished rental is.
The landlord renting out the house on Airbnb is classified as an unprofessional landlord (Loueur Meublé Non-Professionnel LMNP) by the tax authorities.
This income should be reported on the French tax return as Bénéfices Industriels et Commerciaux (BIC) (2042C).
However, there are certain distinctions based on whether you are a resident or a non-resident, as well as the type of business regime your rental property is subject to.
Your rental income, like all income in France, will be subject to both French income tax and social charges, so keep these figures in mind.
If you are a non-resident with property in France, you have to file a French property tax return and an income tax return in your home country.
France has double taxation treaties with many countries, so you are unlikely to be taxed twice on the same income.
How much tax will I have to pay on my Airbnb income in France as a non-resident?
Non-residents’ rental income will be taxed at 20% up to a threshold of €28,797. Any rental income that exceeds this amount will be taxed at a rate of 30%.
The social charges for EU residents are 7,5% and for non-EU residents – 17,2%.
Can I claim any tax deductions for my Airbnb income in France?
Yes. All allowable expenses can be deducted in case of Real mode taxation. For the Micro Mode of taxation – (Micro – BIC) – we have a 50% of gross rental income notional deduction.