Declare your Airbnb income – or else, SARS warns
- SARS has warned property owners “who host fee-paying guests” to declare that income on their income tax return.
- This seems to be directed at hosts on Airbnb, which launched in SA five years ago.
- SARS says there's "early evidence" that better compliance is needed.
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The South African Revenue Service (SARS) has issued a stern warning that property owners “who host fee-paying guests”, must declare that income on their income tax return.
“This is the same principle that applies to any person who has rental income from letting out their property as a home-owner, placing them under the same obligation to declare such rental income to SARS,” it said in a statement.
While this could include guesthouse owners, the warning seems to be aimed at hosts on the Airbnb platform, which launched in South Africa five years ago.
“Early evidence has highlighted the need to focus on improving compliance in this sector of property owners who derive income from fee-paying guests,” SARS says.
A property owner is also required to register as a VAT vendor with the accompanying obligations, if the short-term rental income exceeds R1 million in a 12-month period.
SARS says it is “determined to make it hard and costly for non-compliant taxpayers not willing to meet their obligations. We are working hard to improve system capabilities, in order to detect those taxpayers who do not comply by using data to identify risk.”
Werksmans director Doelie Lessing says it may be relatively straightforward for SARS to confirm undeclared income from Airbnb. Verifying who owns a property is one of the easiest assets for SARS to confirm, she says. Properties listed on Airbnb could then be potentially cross referenced to confirm hosts.
She encouraged those who have not declared their Airbnb income, to do so as soon as possible. They could opt to use the SARS voluntary disclosure programme (VDP), which offers more favourable penalty amounts.
“Failure to regularise your affairs, may place taxpayers at risk and should they be selected by SARS for an audit, the more stringent normal processes will apply,” SARS warns.
“Taxpayers are reminded that failure to comply with their tax obligations may result in administrative penalties being imposed in addition to interest, or even criminal action being taken against them.”
The VDP unit at SARS can be contacted directly at VDP@sars.gov.za.
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