According to the latest statistics, the number of nights booked in London via Airbnb increased 130% in 2016 compared to 2015. But what’s even more interesting is that this number is expected to increase in 2017. People in London love Airbnb because it allows them to make a little extra money while those who are traveling to London are getting a chance to pay less for accommodation and get a different travel experience.
90-day limit
Due to Airbnb’s popularity and increasing pressure from the hotel industry, the San Francisco-based website and the City Council reached an agreement and revealed a 90-day limit for hosts in London less than a year ago. This limit is set per year and doesn’t allow hosts to rent their properties for over three months unless they don’t have consent from the Council.
This was a significant change as 25% of the homes in London found on Airbnb were rented for over 90 days. In other words, they were acting as illegal hotels. It’s worth mentioning that it was already illegal to let out a home in London for more than 90 days a year without planning permission before Airbnb's arrival, but the local authorities didn’t have a way to enforce the law. Now, thanks to Airbnb’s latest changes in terms and regulations, this problem is avoided.
Taxes
The other regulation related to Airbnb hosts is related to taxes. Just like in many other countries, London property owners who rent out their properties have to pay taxes. This is known as rental income tax. It’s interesting that the regulations are a little bit different for residents and non-residents. Namely, UK residents have to pay tax on all of their income while nonresidents pay tax just for their revenue in the UK. Their foreign income is not included.
So, residents of London and the UK must report income that they have received from Airbnb property rental in case they’ve earned between 2,500 and 9,999 GBO after allowable expenses or 10,000 GBP or more before deductible expenses. There is an opportunity to claim costs to cut the income tax, but they depend on the type of property you have – commercial property, furnished holiday rental or residential property. On the other hand, non-residents that are renting a London property on Airbnb must inform Her Majesty’s Revenue, and Customs and they may or may not have to pay tax.