Do I Pay GST on Holiday Home Income?

The $60,000 registration threshold and what counts toward it

You need to register for GST if your turnover from all taxable activities is more than $60,000 for any 12-month period. Taxable activities include short-stay rental income, but also any other business income you earn, such as consulting work, freelance writing, or selling goods. If you own multiple properties and rent them all out short-term, all that income counts toward the threshold. Some property owners are surprised to learn that non-property income pushes them over the GST threshold.

The threshold is for 12 months, not a calendar year. If you start renting out a holiday home in July, you count income from that date forward for 12 months. Once you trigger the threshold (whether it's expected or actual income), you must register for GST, usually within 30 days of hitting that amount. The IRD takes late registration seriously. If you have already been collecting income that should have been GST-liable without being registered, you will owe all the GST you should have collected, plus interest and potential penalties.

For illustrative purposes, imagine you earn $40,000 from freelance work and own a holiday home that earns $25,000 per year. Your combined taxable turnover is $65,000, which exceeds the $60,000 threshold. You must register for GST on all of your income, not just the holiday home portion.

If you book through an online marketplace

From 1 April 2024, an online marketplace covered by the listed-services rules collects and returns 15 percent GST on short-stay accommodation supplied through it. When the seller is not GST-registered, the marketplace generally passes an 8.5 percent flat-rate credit to the seller and returns the balance to Inland Revenue. GST-registered sellers are treated differently and should use the marketplace statements in their own GST records.

Marketplace collection does not by itself answer whether the seller must register for GST. The $60,000 test applies to the person's taxable activities, and the treatment of marketplace and direct sales in that calculation needs to be handled correctly. Check Inland Revenue's current listed-services guidance or ask an accountant before assuming the marketplace removes every seller obligation.

Keep every marketplace statement showing the booking value, GST, flat-rate credit and payout. Reconcile those records with direct-booking income and the amounts included in income-tax and GST returns.

If you take direct bookings

If you operate a direct-booking website (like those built by Directstay.guru) or take bookings by email or phone, you are responsible for GST. If your annual revenue exceeds $60,000, you must register for GST, collect 15% from guests (or build it into your quoted price), and remit it to the IRD quarterly or six-monthly depending on your registration scheme. You can claim back GST you pay on property expenses like maintenance, cleaning supplies and utilities.

Some owners start with direct bookings below the threshold, then add platform listings once they cross it. In that case, your direct booking income and platform income are both added together to determine if you need to register. Once registered, you collect GST on all your turnover, regardless of which channel it comes from. If you are registered for GST, you also need to file GST returns on time. This adds administrative overhead, which is one reason some hosts prefer the simplicity of booking through platforms where the platform handles GST.

Mixing platforms and direct bookings, and crossing the threshold

If you book some guests directly and some through Airbnb or other platforms, the marketplace still collects GST on the platform bookings (they handle their portion automatically). But you are responsible for collecting GST on direct bookings. If your combined turnover exceeds $60,000, you must register for GST and track both streams separately in your filings to show which income was marketplace-collected and which was your direct collection.

Using one booking system can simplify reporting, but it does not change the legislation. Marketplace bookings remain subject to the listed-services rules and direct bookings remain the seller's responsibility. Confirm whether registration is required rather than assuming marketplace collection keeps the seller below the threshold.

If you take direct bookings and realise mid-year you will exceed $60,000, register immediately rather than waiting until year end. Once registered, the effective date can be set from when you realised you would exceed the threshold. Keep records of when you expect to cross the threshold. The IRD is relaxed about early registration but strict about late registration if you have already been collecting income that should have been GST-liable.

Compliance and record keeping

If you are registered for GST or receiving marketplace GST statements, keep all documentation carefully. The IRD may ask for your registration certificate, invoices showing GST you collected from direct bookings, and marketplace statements showing the GST breakdown. Keep records for at least seven years.

File GST returns on time. If registered, file either quarterly or six-monthly depending on your scheme. Late filing or non-payment can result in penalties and interest. If unsure whether you are registered, check with the IRD directly. It is better to clarify than to assume.