Airbnb and other popular short-term accommodation services, can be a great way to generate some extra income, however, hosts need to be aware of their obligations and rising legal and regulatory issues.

Before creating an Airbnb listing, or renting out your home to short-term tenants, it’s important to do your research, there may be certain conditions relevant to your area or location and here are a few things hosts need to consider:

Insurance

Hosts must notify their insurer if there is any change in circumstances, such as using their home for short-term rental accommodation. A failure to notify an insurer could result in  a breach of contract and, therefore, may void the policy.

It is important to ensure accidents or damage are not excluded in your home and contents insurance. Hosts may need to upgrade their insurance to public liability insurance to cover unforeseen incidents involving guests or their renters.

Local council

Rules and regulations regarding short-term rentals vary between states and territories. Those who are considering hosting should seek advice as to whether they need to apply for consent from their local council. Local council planning laws also vary widely, especially, in terms of how they enforce these laws.

Legal and tax issues

Acting as a host can give rise to many legal problems, especially when owners are not around to supervise. Residential apartments used for high rotation short-term lettings could face legal issues such as consumer protections; noise; safety, hygiene and other standards. Those looking to become hosts should check fire alarms, appliances and gas connections are all certified and discuss options with their insurer.

Hosts will also need to keep the Tax Office in the loop and be sure to disclose rental income. As there may be potential CGT implications when the property is sold, it is essential to report all income in an income tax return.