Clarence Valley Independent

Short-term Rental Accommodation explained

Geoff Helisma |

The NSW Government’s Explanation of Intended Effect for its Short-term Rental Accommodation Planning Framework says it is proposing amendments to introduce a state-wide planning framework for STRA (Short-term Rental Accommodation).

The Independent asked NSW Fair Trading if property owners, who are leasing their homes or units out for short term rentals, were conducting a business.

A spokesperson said in an emailed response: “An owner letting out their own residential property for short-term rental accommodation (STRA) does not need to have an Australian Business Number (ABN) to undertake this activity and does not need to be licensed if they are only dealing with their own property.”
On what types of insurance STRA owners should have, the spokesperson said: “While it is sensible to have appropriate insurance coverage, it is not mandatory.

“However, a person who is acting as a property manager and handling residential rental arrangements for other people’s properties will need to hold a real estate agent’s licence under the Property, Stock and Business Agents Act 2002.”

The Australian Tax Office (ATO) confirmed that this was the case in an emailed response: “The ATO does not consider renting out a single property as carrying on a business.

“However, if you rent out part or all of your home, the rent money you receive is generally regarded as assessable income.

“You must declare your rental income in your income tax return, and you can claim deductions for the associated expenses, such as part or all of the interest on your home loan.”

More generally, while the regulatory framework is yet to commence, pending further consideration of various factors, according to NSW Fair Trading it will include:
• a mandatory Code of Conduct for online platforms, property managers, letting agents, hosts and guests that will include a complaint handling mechanism for neighbours and others affected by inappropriate or antisocial behaviour of guests;
• an exclusion register for guests and hosts who breach the Code of Conduct more than once in two years, which will keep them out of STRA for five years;
• allowing strata schemes to introduce by-laws prohibiting STRA but only for lots that are not the principal place of residence of the host;
• a state-wide planning instrument permitting use of residential premises for STRA with a state-wide consistent definition of STRA;
• allowing STRA as exempt development for 365 days per year when the host is present;
• when the host is not present, a limit on STRA of 180 days in Greater Sydney, with 365 days allowed in all other areas of NSW;
• councils outside Greater Sydney having the power to decrease the 365-day threshold to no lower than 180 days per year; and,
• certain planning rules applying to bushfire prone land.

The Code of Conduct and the new planning laws are currently being developed and should be finalised by early 2019.

A period of consultation with industry and stakeholders will follow before the Code of Conduct is administered.

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