6 ms·

I have still not understood how legal Airbnb is. If I own a house, can I just let it out for rent for $$ with no consequences? What is difference between this a

I have still not understood how legal Airbnb is. If I own a house, can I just let it out for rent for $$ with no consequences? What is difference between this and running a hotel? (I assume you cannot sublet in most places even though I have seen people do this :/ )

randyrand 10y ago
Scale is the biggest difference. Usually a hotel has many guests at a time, and multiple employees. Airbnb operators are usually run by the host, and typically only have a single spare room.
stale2002 10y ago
Why focus on Airbnb? What about Craigslist. Or classified ads in the newspaper. Are these all "illegal hotels"? People have been renting out spare bedrooms in their house for centuries.
- vkou 10y ago
  People have been using paper to commit fraud for centuries, but nobody goes after the paper manufacturers. They will go after the guy running a forgery-on-demand service, though. Craigslist is a general classified service. It's at about five arms lengths' away from property-related transactions. AirBnB, on the other hand, is very intimately involved in these transactions. Courts aren't stupid, and they will interpret the two situations quite differently.
  - chii 10y ago
    What about the introducer of said forgert-service ? I can't possibly be breaking the law if all I'm doing is introducing people to each other.
    - vkou 10y ago
      I think that's the same line of reasoning used by the Assasinat.io startup - making introductions between sets of three people (One of whom happens to be heavily armed, one of whom happens to be fairly wealthy, and one who happens to be wanted dead by the second.) Since courts aren't stupid, I don't think it would pass muster either. Even if it did have a karma system, and a sweet app.
    - jonathankoren 10y ago
      There's a word for that. It's called Conspiracy. https://en.wikipedia.org/wiki/Conspiracy_(criminal) https://en.wikipedia.org/wiki/Conspiracy_(criminal)
TeMPOraL 10y ago
A question I never see being brought up: do people pay their due taxes from their AirBnB earnings?
- deleted 10y ago
  [deleted]
- toomuchtodo 10y ago
  Surprisingly, AirBNB only reports your host income if you have over $20,000 in earnings and 200+ bookings [1]. (These thresholds are set by statute) Sounds like a legal fix is in order to get that down to a $600 threshold as applies to traditional 1099 reporting, but I'll assume a fix won't be made as the threshold was most likely set high as a compromise to enable such reporting to occur. Luckily, AirBnB will collect occupancy taxes and can remit them to taxing authorities directly. [1] https://www.airbnb.com/help/article/481/how-do-taxes-work-for-hosts https://www.airbnb.com/help/article/481/how-do-taxes-work-fo...
  - gamblor956 10y ago
    The federal threshold for reporting payments of income is $600, and there is no federal statutory threshold with respect to the number of bookings before reporting is required. Curious that a technology company can't manage something that low-tech property management companies can handle without issue. This type of tax reporting is very easily automated, so AirBnB doesn't really have any excuse not to do it properly.
    - toomuchtodo 10y ago
      IRS guidelines (1099-K instructions) state the thresholds I stated; if they're not defined in law, the IRS is dictating the thresholds themselves.
  - ArtDev 10y ago
    Airbnb does a terrible job with occupancy tax. They only cover a few cities and do not provide any tools to collect tax at the time of booking. VRBO/Homeaway does collect tax for you. So I pay the tax out of my own airbnb earnings (it is regulated here so I have a license). Which sucks because hotels can add the tax, after their daily rate. I just earn 10% less.
jacalata 10y ago
It depends heavily on your location. Some jurisdictions levy taxes that you are supposed to pay when you rent out your house for a short time ('hotel taxes'). Some areas have private groups which control a block of houses ("Home Ownership Associations" in the US) which might have a rule saying you can't rent out the house at all, even though you own it. Some cities have laws saying that a building must be either built for the purpose of being a hotel (with extra requirements for fire codes, etc) or you can't rent it for short periods. Some say you can rent out your house but must register as a business (San Francisco). Some say that if the place you own is inside an apartment building then you may not rent it out for short periods unless you live there while the renter lives there (this is the law in NYC).
gumby 10y ago
In addition to the answer given, your insurance company may not cover you if there is a problem when you rented your place out.
- ArtDev 10y ago
  Airbnb provides insurance when you rent out your space. The result is that you don't have to worry about your homeowners insurance covering damage as its already covered.
  - gumby 10y ago
    Just make sure they don't find out.

randyrand 10y ago

Scale is the biggest difference. Usually a hotel has many guests at a time, and multiple employees. Airbnb operators are usually run by the host, and typically only have a single spare room.

stale2002 10y ago

Why focus on Airbnb? What about Craigslist. Or classified ads in the newspaper. Are these all "illegal hotels"? People have been renting out spare bedrooms in their house for centuries.

vkou 10y ago
People have been using paper to commit fraud for centuries, but nobody goes after the paper manufacturers. They will go after the guy running a forgery-on-demand service, though. Craigslist is a general classified service. It's at about five arms lengths' away from property-related transactions. AirBnB, on the other hand, is very intimately involved in these transactions. Courts aren't stupid, and they will interpret the two situations quite differently.
- chii 10y ago
  What about the introducer of said forgert-service ? I can't possibly be breaking the law if all I'm doing is introducing people to each other.
  - vkou 10y ago
    I think that's the same line of reasoning used by the Assasinat.io startup - making introductions between sets of three people (One of whom happens to be heavily armed, one of whom happens to be fairly wealthy, and one who happens to be wanted dead by the second.) Since courts aren't stupid, I don't think it would pass muster either. Even if it did have a karma system, and a sweet app.
  - jonathankoren 10y ago
    There's a word for that. It's called Conspiracy. https://en.wikipedia.org/wiki/Conspiracy_(criminal) https://en.wikipedia.org/wiki/Conspiracy_(criminal)

TeMPOraL 10y ago

A question I never see being brought up: do people pay their due taxes from their AirBnB earnings?

deleted 10y ago
[deleted]
toomuchtodo 10y ago
Surprisingly, AirBNB only reports your host income if you have over $20,000 in earnings and 200+ bookings [1]. (These thresholds are set by statute) Sounds like a legal fix is in order to get that down to a $600 threshold as applies to traditional 1099 reporting, but I'll assume a fix won't be made as the threshold was most likely set high as a compromise to enable such reporting to occur. Luckily, AirBnB will collect occupancy taxes and can remit them to taxing authorities directly. [1] https://www.airbnb.com/help/article/481/how-do-taxes-work-for-hosts https://www.airbnb.com/help/article/481/how-do-taxes-work-fo...
- gamblor956 10y ago
  The federal threshold for reporting payments of income is $600, and there is no federal statutory threshold with respect to the number of bookings before reporting is required. Curious that a technology company can't manage something that low-tech property management companies can handle without issue. This type of tax reporting is very easily automated, so AirBnB doesn't really have any excuse not to do it properly.
  - toomuchtodo 10y ago
    IRS guidelines (1099-K instructions) state the thresholds I stated; if they're not defined in law, the IRS is dictating the thresholds themselves.
- ArtDev 10y ago
  Airbnb does a terrible job with occupancy tax. They only cover a few cities and do not provide any tools to collect tax at the time of booking. VRBO/Homeaway does collect tax for you. So I pay the tax out of my own airbnb earnings (it is regulated here so I have a license). Which sucks because hotels can add the tax, after their daily rate. I just earn 10% less.

jacalata 10y ago

It depends heavily on your location. Some jurisdictions levy taxes that you are supposed to pay when you rent out your house for a short time ('hotel taxes'). Some areas have private groups which control a block of houses ("Home Ownership Associations" in the US) which might have a rule saying you can't rent out the house at all, even though you own it. Some cities have laws saying that a building must be either built for the purpose of being a hotel (with extra requirements for fire codes, etc) or you can't rent it for short periods. Some say you can rent out your house but must register as a business (San Francisco). Some say that if the place you own is inside an apartment building then you may not rent it out for short periods unless you live there while the renter lives there (this is the law in NYC).

gumby 10y ago

In addition to the answer given, your insurance company may not cover you if there is a problem when you rented your place out.

ArtDev 10y ago
Airbnb provides insurance when you rent out your space. The result is that you don't have to worry about your homeowners insurance covering damage as its already covered.
- gumby 10y ago
  Just make sure they don't find out.