Have a spare room in your home that you could spruce up and rent out to bulk up your extra income streams a bit and help reduce the ever-increasing cost of living?
Airbnb Rooms, a newly launched category on the popular online accommodation platform, allows you to rent out a private room at an average charge of R675 per night in South Africa.
Yes, you’ve been able to do it before – and it was Airbnb’s third most-popular category as travellers are looking to cut back on accommodation costs, but now they’ve optimised the category by introducing a “Host Passport” feature where the potential guest can learn more about the host before booking their stay. This makes for a safer experience for the guest.
Before you start listing your rooms, make sure you are aware of the potential risks linked to letting people stay in your home or on your property. We asked Just Property for some advice when it comes to being savvy about renting out a room on a short-term rental basis. Here are two points to be aware of:
- What if they don’t leave?
Your guests arrived, but they’ve overstayed their welcome and won’t leave. Help! This is where you need to know what the law says. While Airbnb’s short-term rental agreements are as simple as the click of a mouse on the app, it is advisable to put together a full and in-depth lease agreement, despite the short duration of the stay. Short-term rental lease agreements can specifically exclude certain provisions of the Consumer Protection Act, as well as the Prevention of Illegal Evictions. You have the choice of either asking a professional letting agent for advice on vetting prospective ‘guests’/tenants and have them look over your lease, or you could appoint an agent to manage your short-rentals for you.
- SARS is watching…
Two years ago, SARS warned South Africans hosting fee-paying guests that they had to declare rental income in their tax return. Airbnb requires tax-related declarations before payments are made to hosts, and those who try to “game” the system will be caught out. Airbnb is legally required to provide a limited amount of data about transactions that take place on the Airbnb platform to SARS upon request.
It’s important to note that, when you sell your primary residence, the first R2m profit is exempt from capital gains tax. If you’ve been renting out any part of your property, you forfeit that exemption and will have to pay capital gains tax on the full profit.
But wait, there is some good news, too. Rates and taxes, bond interest, advertisements, estate agent fees, homeowner’s insurance, garden services, repairs associated with the rented area, security and property levies, cleaning, AirBnB fees and other types of services applicable to keeping your short-stay business in operating order can be claimed as deductions.