Airbnb occupancy tax

All You Need to Know About Airbnb Occupancy Tax

Airbnb serves two wonderful purposes in the travel industry. The first is that it allows people to obtain a place to stay anywhere in the world, which is conveniently located, private and affordable. The second is that it enables people to avoid those large, busy resorts which are typical with summer holidays.

Of course, there are many more benefits to Airbnb, but nevertheless, it’s a wonderful platform that travelers seem to love. Although, as a host, you’ll need to brush up on certain legalities to ensure you’re operating within the boundaries of the law. One of those legalities is occupancy tax.

What is occupancy tax on Airbnb?

Essentially, occupancy tax is a compulsory charge which is demanded by a government for the rental of rooms. The price you’ll be required to pay heavily depends on where you are located. That’s because the Airbnb occupancy rate varies between cities, states, and countries. If you want to learn more about the rate, check out our previous blog post.

Despite the host being responsible for the tax, it is usually covered by the guest. So, once you’ve determined what occupancy tax rate you need to pay, you can then add it to your listing, so that guests are fully aware of the charge. If the guest isn’t informed of the precise amount that they need to pay before placing the booking, it can cause complications for you.

Now, in some regions, there is no pressure on the host to deal with the occupancy tax. Why? Because Airbnb takes care of it for them; Airbnb will collect and transfer the money to the relevant tax authority on the hosts’ behalf. But, if your region isn’t covered, then you can either collect it in person from the guest or resolve the issue using the Resolution Centre.

Countries where occupancy tax is processed by Airbnb…

So, we spoke above about certain regions where the occupancy tax is handled by the Airbnb team. Well, here they are:

  •         United States (multiple states)
  •         U.S. Virgin Islands
  •         Puerto Rico
  •         Switzerland
  •         Portugal
  •         Netherlands
  •         Mexico
  •         Italy
  •         India
  •         Germany
  •         France
  •         Canada

If you’re situated in one of those areas above, then Airbnb will display the amount that the guest needs to pay within your actual listing – you don’t need to worry about anything whatsoever. Therefore, you should definitely not try and claim any extra money from your guests, as that would violate the Airbnb terms or service, and you’ll find yourself in a troublesome situation. In addition, as time goes on, Airbnb may add more regions to their list and will inform you if yours is selected.

Considering you’ll need to pay occupancy tax on all of your bookings, it’s important that you know how to price correctly; you’ll need to cover the cost, but also stay competitive so that guests are still prepared to pay for your property. Follow the link if you need some assistance to conjure up an effective Airbnb pricing strategy.