Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified Australia tax professional before filing.
Sydney, Australia · Short-term rental taxes
Short-Term Rental Taxes in Sydney, Australia
STR income earned in Sydney is taxed as ordinary assessable income under the Australian federal income tax system administered by the ATO, with deductions available for rental-related expenses and depreciation.
The 30-Second Answer
- All STR income — nightly rates, cleaning fees, cancellation fees — must be declared in your annual Australian income tax return (Individual tax return, supplementary section for rental income).
- You can deduct rental-related expenses (platform fees, cleaning, insurance, interest, depreciation) but must apportion any expense that also covers private use of the property.
- Capital works (Division 43) and plant & equipment (Division 40) depreciation are claimable each year; a quantity surveyor's depreciation schedule is strongly recommended.
- New ATO Taxation Ruling TR 2026/1 and PCG 2026/2 / PCG 2026/3 (effective 1 July 2026) sharpen how the ATO scrutinises holiday-home deductions and private-use apportionment — keep meticulous records.
Deductions
What Sydney STR Hosts Can Deduct
Expenses must be incurred in earning rental income; any private-use portion must be excluded. Apportion shared costs by floor area or time.
Borrowing expenses over A$100 must be spread over 5 years or the loan term, whichever is shorter. Capital improvements (not repairs) are added to the cost base and depreciated, not immediately deducted. Source: ATO Rental Properties guide 2025.
Filing Calendar
Key Dates & Filing Calendar
Australia uses a 1 July – 30 June income year. Most individuals lodge via myTax or a registered tax agent.
If you use a registered tax agent, you may qualify for the extended 15 May deadline — but you must be on the agent's books before 31 October.
Australian Taxation Office — Key dates for individuals, ato.gov.au
Tax Treatment
How STR Income Is Taxed: Whole Property vs. Partial Rental
Australia does not have a simplified flat-rate rental regime. Instead, the key distinction is whether you rent the entire property or only part of it — this determines how you apportion deductions.
Entire Property Rented
All income declared; all rental expenses fully deductible (no private use).
- Declare 100% of gross rental receipts as assessable income.
- Claim 100% of eligible expenses: interest, rates, insurance, platform fees, depreciation.
- No private-use apportionment required while property is genuinely available for rent.
- Capital gains tax (CGT) 50% discount applies if property held > 12 months on eventual sale.
No threshold — all income taxed at your marginal rate
Partial / Mixed-Use Rental
Expenses must be apportioned between rental and private use by floor area and/or time.
- Only the rental-use portion of income and expenses is assessable/deductible.
- Apportion by floor area (for shared spaces) and by days rented vs. days privately used.
- ATO TR 2026/1 and PCG 2026/2 clarify that periods of genuine availability for rent count as rental use.
- Main residence CGT exemption may be partially reduced if you rent part of your home.
No threshold — apportioned income taxed at your marginal rate
Depreciation
Depreciation Deductions for Sydney STR Properties
The ATO allows two streams of depreciation: Division 43 (capital works / building structure) and Division 40 (plant & equipment / removable assets).
| Asset | Typical write-off period | Notes |
|---|---|---|
| Building structure & capital works (Div 43) | 40 years (2.5% p.a.) | Applies to buildings constructed after 15 September 1987. Requires a quantity surveyor report for accurate claim. |
| Carpet & floor coverings | 8–10 years | Division 40 plant & equipment; effective life set by ATO Tax Ruling TR 2024/1. |
| Air conditioner (split system) | 10 years | Division 40; must be new asset purchased after 9 May 2017 for second-hand residential property restriction. |
| Hot water system | 12 years | Division 40; effective life per ATO schedule. |
| Furniture & appliances (new) | 5–13 years (varies by asset) | Division 40; second-hand plant & equipment in residential property purchased after 9 May 2017 cannot be depreciated by subsequent owners. |
A quantity surveyor's depreciation schedule (typically A$500–A$800) is recommended to maximise claims and satisfy ATO substantiation requirements. The cost of the schedule is itself tax-deductible.
When you sell the property, depreciation claimed under Division 43 reduces the cost base, potentially increasing your capital gain. Division 40 balancing adjustments may also apply. Seek advice before selling.
NSW / Sydney Local Levies
Local & State Taxes Affecting Sydney STR Hosts
New South Wales does not currently impose a state-wide short-term rental levy. Sydney City Council does not levy a separate tourist/accommodation tax. The main imposts are federal GST and NSW land tax.
Unlike Victoria (Short Stay Levy from Jan 2025) and the ACT (STRA Levy from Jul 2025), NSW has not enacted a dedicated STR levy as of mid-2026. Sydney hosts face the following charges:
Most Sydney STR hosts: 0% local lodging levy (GST only if turnover ≥ A$75,000)
NSW Fair Trading — Short-term rental accommodation framework; ATO — GST for small business (ato.gov.au); Revenue NSW — Land Tax (revenue.nsw.gov.au)
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| GST (if registered) | Host registers with ATO, lodges BAS quarterly or annually, remits 1/11th of GST-inclusive price | Add GST to your nightly rate or absorb it; claim GST credits on business expenses; platforms do not remit GST on your behalf |
| NSW Land Tax | Revenue NSW assesses and bills the landowner directly each January | Not a guest-facing charge; it's an annual bill to the property owner based on land value |
GST registration is compulsory once your total annual turnover from all sources reaches A$75,000. Residential rent is input-taxed (GST-free for long-term leases), but short-term accommodation (under 28 days) is a taxable supply subject to GST if you are registered. Most casual hosts remain below the threshold and are not required to register.
Platforms
How Airbnb, Stayz & Other Platforms Handle Reporting in Australia
Australian platforms are required to report host income data to the ATO under the sharing economy reporting regime — know what data the ATO already has.
| Platform | Reports your income to ATO | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Yes — mandatory from 1 July 2023 under SERR | No NSW/Sydney levy to collect; does not remit GST on host's behalf | Annual income summary available in host dashboard; download for tax records |
| Stayz (Vrbo) | Yes — mandatory from 1 July 2023 under SERR | No NSW/Sydney levy; does not remit GST on host's behalf | Annual earnings statement available in owner portal |
| Booking.com | Yes — mandatory from 1 July 2023 under SERR | No NSW/Sydney levy; does not remit GST on host's behalf | Extranet provides monthly and annual payment reports |
Using Multiple Platforms?
The ATO receives income data from each platform separately under the Sharing Economy Reporting Regime (SERR). Add up gross income from all platforms before declaring — the ATO cross-matches platform data against your return. Keep your own consolidated record.
Sharing Economy Reporting Regime (SERR) — Australia
From 1 July 2023, digital platforms facilitating accommodation rentals must report host identity and income data to the ATO twice yearly. This is Australia's equivalent of the OECD DAC7 standard. Hosts should assume the ATO has visibility of all platform income.
ATO — Sharing Economy Reporting Regime (ato.gov.au/SERR), effective 1 July 2023
Illustrative P&L — Sydney STR (Entire Property, Full Year)
Example only. Assumes a Sydney apartment rented 100% of the time at A$250/night average, 200 nights. Marginal tax rate 37% (income A$135,001–A$190,000 for 2024-25). Not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and for How Long
The ATO can review rental claims up to 5 years after lodgment. Keep records that substantiate every deduction and the rental vs. private-use split.
| Keep | How long | Why |
|---|---|---|
| Platform income statements (Airbnb, Stayz, Booking.com) | 5 years after lodgment | Primary evidence of gross income; ATO cross-matches against SERR data |
| Receipts for all expenses (cleaning, repairs, insurance, rates, platform fees) | 5 years after lodgment | Required to substantiate every deduction claimed; ATO can disallow unsubstantiated claims |
| Mortgage / loan statements showing interest charged | 5 years after lodgment | Interest is typically the largest deduction; lender statements are the best evidence |
| Quantity surveyor depreciation schedule | Life of property + 5 years | Supports Division 40 and Division 43 claims; also needed to calculate cost base on sale |
| Calendar / booking log showing rental nights vs. private-use nights | 5 years after lodgment | Essential for apportionment calculations under TR 2026/1 and PCG 2026/2 |
| Purchase contract, settlement statement, and capital improvement invoices | Life of property + 5 years | Needed to calculate capital gain / loss and cost base on eventual sale |
ATO TR 2026/1 and PCG 2026/2 (effective 1 July 2026) place greater scrutiny on holiday-home deduction claims. A contemporaneous booking log is now more important than ever to demonstrate genuine availability for rent.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
This page is for general educational purposes only and does not constitute tax advice. Tax rules change frequently — always verify current rates and requirements with the ATO or a registered tax agent. All figures are in Australian dollars (AUD).
- Australian Taxation Office — Rental income you must declare — ato.gov.au — last updated 21 May 2026. Confirms all STR income is assessable.
- Australian Taxation Office — Rental expenses (2025 guide) — ato.gov.au/forms-and-instructions/rental-properties-2025/rental-expenses — categories of deductible and non-deductible expenses.
- ATO — TR 2026/1, PCG 2026/2, PCG 2026/3 — Finalised May 2026. Clarifies holiday-home deduction apportionment and ATO compliance approach from 1 July 2026.
- ATO — Sharing Economy Reporting Regime (SERR) — ato.gov.au — mandatory platform reporting of host income from 1 July 2023.
- ATO — GST and residential rental properties — ato.gov.au — short-term accommodation (under 28 nights) is a taxable supply; registration threshold A$75,000.
- Revenue NSW — Land Tax — revenue.nsw.gov.au — annual land tax on investment properties; principal place of residence exempt.
- NSW Fair Trading — Short-term rental accommodation — fairtrading.nsw.gov.au — NSW STRA registration and planning framework; no state STR levy as of mid-2026.
- Vrbo / Expedia — Australia lodging tax collection page — help.vrbo.com — confirms Vrbo collects Victoria Short Stay Levy and ACT STRA Levy but not an NSW levy.
- Bentleys Accountants — Airbnb Tax Guide 2026 — bentleys.com.au — practitioner summary of TR 2026/1 and PCG 2026/2 implications for STR hosts.
- H&R Block Australia — Tax deductions for Airbnb hosts — hrblock.com.au — updated 22 May 2026; apportionment rules for partial-use properties.
- Trinity Group — Rental property depreciation Australia — trinitygroup.com.au — Division 40 and Division 43 effective lives and quantity surveyor guidance.
Questions
Frequently Asked Questions — Sydney STR Taxes
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