How to Run an Airbnb or Short-Term Rental Business in Australia

Starting a Short-Term Rental or Airbnb Business in Australia

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Running an Airbnb or short-term rental business in Australia can be highly profitable, especially in high-demand areas. However, managing such a business successfully requires more than listing a property online. From legal compliance to financial planning, property management, and tax strategy, short-term rental operators must manage many moving parts. In this detailed guide, we explain everything you need to know to set up, run, and grow an Airbnb or short-term rental business in Australia.

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What is Considered a Short-Term Rental or Airbnb?

Short-term rentals (STRs) typically refer to residential properties rented for a few nights to several weeks. This includes:

• Airbnb listings
• Stays on platforms like Stayz, Booking.com, and HomeAway
• Direct bookings via your own website or social media
• Room rentals or granny flats for casual stays

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Is It Legal to Operate an Airbnb in Australia?

Yes, but each state and local council has its own rules. You must:

• Check your council’s zoning and development control plan
• Register your property with local or state authorities (NSW mandates registration via NSW Fair Trading)
• Comply with fire, safety, and insurance requirements
• Notify your strata (if applicable)

Failure to comply can result in fines or bans. Trinity Accounting Practice always advises confirming legal obligations before starting.

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Benefits of Running an Airbnb or STR Business

1. Higher Returns: STRs can earn more than traditional long-term rentals if managed well.

2. Flexibility: You can block out dates for personal use.

3. Tax Deductions: Property expenses may be claimable (explained further below).

4. Market Expansion: Tourists, business travellers, and digital nomads provide steady demand.

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Risks and Challenges to Consider

• Vacancy periods reduce income during low seasons
• High operating costs, including cleaning and maintenance
• Guest damage and insurance risk
• Legal changes or tax compliance failures can attract penalties

Trinity Accounting helps mitigate these risks with smart planning.

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Step-by-Step: How to Start an Airbnb or STR Business in Australia

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Step 1: Choose the Right Property

Evaluate location, nearby attractions, transport, and amenities. Properties in CBDs, coastal areas, or tourist hubs usually yield better returns.

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Step 2: Check Local Council Rules

Each state or council may have:

• Night caps (e.g. 180 nights/year)
• Registration or code of conduct
• Fire safety and compliance requirements
• Development consent (in some LGAs)

Trinity Accounting can help you research your region’s laws.

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Step 3: Setup Property for Guests

Furnish with durable, easy-to-clean items. Include:

• Bedding and towels
• Cutlery, cookware, and appliances
• Wi-Fi and entertainment
• Smoke alarms and fire blankets
• Security locks

Optional: Install smart locks, noise monitoring, or CCTV at entryways.

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Step 4: Register with Platforms

Popular listing sites include:

• Airbnb
• Stayz
• Booking.com
• Agoda Homes
• Your own website (recommended for control and lower fees)

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Step 5: Open a Separate Bank Account

Keep rental income and expenses separate for easier bookkeeping.

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Step 6: Organise an ABN (if needed)

If your turnover exceeds the GST threshold ($75,000), or you operate as a business, an ABN is required.

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Financial Requirements to Run a Short-Term Rental Business

Upfront Costs:

• Furniture and setup: $10,000–$25,000
• Photos, copywriting, marketing: $500–$2,000
• Insurance: $300–$1,000 annually
• Legal setup or business registration: $300–$2,000 (if using a trust or company)

Ongoing Costs:

• Cleaning: $80–$250 per booking
• Utilities: $300–$800/month
• Repairs and maintenance: 5–10% of income
• Platform fees: 3–15%
• Insurance premiums
• Council registration (NSW: $65 per property per year)

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Record-Keeping and Bookkeeping for Airbnb Operators

Proper record-keeping is crucial. You should:

• Track all income (gross and net)
• Retain receipts for cleaning, linen, repairs, utilities, and upgrades
• Log time the property is used for personal vs business use
• Record depreciation for furniture, appliances, and fit-out

Trinity Accounting Practice recommends using Xero or MYOB for accurate bookkeeping and GST tracking. We also help clients automate reconciliations and BAS preparation.

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Do You Need to Pay GST on Airbnb Income?

If you earn $75,000 or more per year, you may need to register for GST, but residential rent is input-taxed, which means:

• GST is not collected on rental income
• GST credits may not be claimable on related expenses

However, if you provide serviced accommodation (meals, daily cleaning, linen, etc.), this may become a commercial supply, and GST may apply.

This is a complex area — Trinity Accounting can provide a private ruling or advice specific to your setup.

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Do You Need to Pay Income Tax on Airbnb Profits?

Yes. Income from Airbnb or STR is taxable. You must declare it in your individual or company tax return, including:

• Rental income
• Cleaning and other service fees
• Additional earnings like extra guest charges

Trinity Accounting Practice can help you plan for tax and claim all legitimate deductions.

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What Can You Claim as Tax Deductions?

Common tax-deductible expenses include:

• Cleaning and linen services
• Repairs and maintenance
• Depreciation on furniture, fittings, and appliances
• Mortgage interest (if property is used to produce income)
• Water, electricity, internet
• Property insurance
• Council rates and body corporate fees
• Airbnb service fees
• Advertising and photography costs
• Accounting and tax advice

Note: Deductions must be apportioned for personal use days.

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How to Manage Personal Use of Your Short-Term Rental

If you stay in the property for personal use, you must:

• Keep a logbook of dates used
• Apportion expenses based on days rented vs personal use
• Understand that deductions and CGT exemptions may be affected

Trinity helps Airbnb hosts maintain audit-ready records that comply with ATO rules.

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Capital Gains Tax When Selling Your Airbnb Property

If you sell a short-term rental property, Capital Gains Tax (CGT) may apply unless:

• It was your main residence for the entire ownership period
• It was not rented out for income
• You qualify for the 6-year absence rule (with conditions)

Even partial rental use affects CGT. Trinity Accounting can calculate CGT liabilities, apply for valuations, and help reduce your tax exposure.

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Insurance Considerations for Short-Term Rentals

Standard home insurance does not cover commercial or Airbnb use. Consider:

• Specialist STR insurance (e.g. ShareCover, Terri Scheer)
• Public liability cover
• Damage caused by guests or pets
• Loss of income due to cancellations or property damage

Having adequate cover is essential to protect your assets and rental income.

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Choosing the Right Business Structure for Airbnb Operators

You can operate your Airbnb business as:

1. Sole Trader (under your own name)
2. Company (separate legal entity)
3. Discretionary Family Trust (for asset protection and income splitting)

Each structure has tax implications, CGT effects, and legal considerations. Trinity can assess your situation and recommend the right structure.

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Common Mistakes Airbnb Hosts Should Avoid

• Not declaring income to the ATO
• Missing GST or registration thresholds
• Not keeping receipts or tracking usage days
• Overlooking insurance or council laws
• Mixing business and personal funds
• Ignoring CGT impacts

Avoid penalties and audits by working with an accountant who understands short-term rentals.

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Software and Tools for Airbnb Business Management

To streamline operations, consider using:

• Guesty, Hostaway, or Hospitable for multi-platform management
• Xero or MYOB for bookkeeping
• AirDNA for market research
• Beyond Pricing or PriceLabs for dynamic pricing
• Slack or WhatsApp to manage cleaning teams
• Zapier to automate workflows

Trinity helps clients set up and integrate tools that save time and money.

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Should You Use a Property Manager or Do It Yourself?

DIY Pros:

• Higher profit margins
• Full control

DIY Cons:

• Time-consuming
• Hard to scale

Property Manager Pros:

• Hands-off income
• Professional handling of guest issues and cleaning

Property Manager Cons:

• Fees (10–25%)
• Less control over reviews and listing

Trinity can help you assess the profitability of each option using cash flow projections.

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Can I Operate Multiple Airbnb Properties as a Business?

Yes, but once you have several listings or properties, the ATO may consider it a business (not passive income). You may then need:

• An ABN
• Business activity statements (BAS)
• GST registration (if applicable)
• Business structure for legal protection

Many of our clients run multi-property portfolios with Trinity’s help for bookkeeping, payroll, and advisory.

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How Trinity Accounting Practice Helps Airbnb Hosts

We support short-term rental operators with:

• BAS and tax return preparation
• Bookkeeping with Xero or MYOB
• CGT advice and property tax planning
• GST compliance and rulings
• Structuring for asset protection and tax minimisation
• Council compliance guidance
• Budgeting, cash flow, and performance tracking

Whether you’re managing one listing or scaling to ten, our team can guide you through every stage.

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Get Help From Trusted Airbnb Accountants

👉 Trinity Accounting Practice
✅ Accounting Firm in Beverly Hills
☎️ 02 9543 6804
📍 159 Stoney Creek Road Beverly Hills NSW 2209
🌐 www.trinitygroup.com.au
📅 Weekend & after-hours appointments available!
📅 Booking Link https://calendly.com/ramy-hanna

Let’s simplify your Airbnb business and keep your finances running smoothly.

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