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  • Peer to peer caravan and recreational vehicle sharing

    Renting or hiring your caravan or recreational vehicle (RV) to others

    When you rent or hire (share) your caravan or RV through a peer to peer sharing platform, such as SHAREaCamper, Camplify, MyCaravan, Hire My Caravan and Camptoo you:

    • need to declare all your income in your tax return
    • are entitled to claim certain expenses as income tax deductions
    • may need to pay goods and services tax (GST) on amounts you earn and may be entitled to claim GST credits for expenses
    • need to keep records of the income received and of the expenses you can claim as deductions and GST credits.

    Note: Recreational vehicle includes campervan, motor home or camper trailer.

    See also:

    Income received from sharing your caravan or RV

    If you share your caravan or RV that you own or lease through renting or hiring, the payments you receive (before commissions) are assessable income. The amounts received are assessable income even if you are not carrying on a business of sharing caravans or RV's on lease or hire.

    If you own the RV jointly then you will need to declare income and claim expenses in proportion to your share of ownership.

    When you must pay GST

    If you are registered or required to be registered for GST and are carrying on an enterprise of caravan or RV sharing, you:

    • will be liable to pay GST on payments you receive from renting or hiring out your caravan or RV
    • can claim GST credits for any GST included in the price you pay for things that you use in carrying on your enterprise
      • if the expense also relates to your private use of your caravan or RV, you will need to apportion, as GST credits cannot be claimed for private use
      • you will need to hold a valid tax invoice to claim GST credits for expenses over $82.50 (including GST).
       

    If you don’t have an Australian Business Number (ABN) or are not registered for GST and you are carrying on an enterprise of caravan or RV sharing, you need to get an ABN and register for GST if your GST turnover from all of your enterprises together is, or is expected to be, $75,000 or more per year.

    Note: The above GST information does not apply to caravan park operators providing long-term accommodation.

    See also:

    Claiming expenses for income tax

    You can claim expenses for income tax purposes as long as:

    • they are related to the renting, hiring or sharing of your caravan or RV
    • you only claim the part of the expense that directly relates to the renting, hiring or sharing
    • you keep records, such as receipts, to back up your claims.

    You can claim 100% of your expenses that you incur under the terms of the contract with your peer to peer sharing platform, such as membership/listing fees and commissions.

    All other expenses that you incur need to be apportioned to take into account private use, such as:

    • storage fees
    • lease or interest payments and depreciation
    • insurance
    • registration
    • cleaning.

    Apportioning the expenses for private use

    If you rent or hire out your caravan or RV and there is also private use of the caravan or RV, your expenses are apportioned according to income earning and private use. You cannot claim deductions for the proportion of expenses that relate to the private use of the caravan or RV.

    Private use includes use by you, your family, your relatives and your friends free of charge.

    If your caravan or RV is rented or hired out to family, relatives or friends at below market rates, your deductions for that period are limited up to the amount of income received.

    If you have purchased or use the caravan or RV mainly for private use, you count periods the caravan or RV is not rented or hired, even if available for rent or hire on the platform, as private use. You will only be entitled to claim a deduction for expenses of the caravan or RV for the periods it is rented.

    If you have purchased or use the caravan or RV mainly for income producing use you are entitled to claim a deduction for periods when the caravan or RV is rented or genuinely available for rent. For your caravan or RV to be genuinely available for rent you must:

    • advertise it widely so it will attract users and respond to enquiries in a reasonable period
    • make it available during peak periods when people want to rent it
    • ask for a fair rent that is comparable to other listings
    • ensure it's in a location and condition that will make it likely to attract tenants
    • not refuse to rent it to interested people without adequate reasons.

    Even caravans and RVs that are mostly for income producing purposes are able to have periods of private use. If you use it yourself or rent it to family and friends at less than market rates, you must apportion the expenses. Like above, when you rent the caravan or RV at less than market rates you will be required to apportion your expenses and only claim a deduction for the expenses up to the amount of rent received.

    Example 1 – Mainly private use of the RV

    Mary and John purchased an RV and use the RV mainly for private use and completed an initial long trip around Australia. They store the RV at their home and occasionally their grandson stays in it when he visits.

    They are now finding that they do not use it very often and their relatives are using it a lot. They have decided to rent it out for extra income when they are not using it for a private use.

    They use a peer to peer sharing platform to advertise it for rent during the year. They hire it out for 26 weeks of the year to paying renters. Mary and John use the RV for private use for 6 weeks during the year to go on holidays.

    Mary and John’s income producing use during the year is 50% (26 weeks hired out to paying renters) and private use is 50% (26 weeks).

    They can claim 50% of expenses such as insurance and registration as they relate to some private use of the RV. They can claim 100% of expenses such as membership fees or commissions as they do not relate to the private use of the RV.

    During the year, Mary and John’s platform membership fees are $500. Other expenses, such as registration, insurance, interest and cleaning, are $3,000. The income producing proportion of these other expenses is $1,500 (50% of $3,000). The total allowable deductions are $2,000 ($1,500 + $500).

    Mary and John receive $4,000 of income from renting out the RV during the year.

    Income Tax Return

    Mary and John’s income and deductions for the year are as follows:

    • income received $4,000
    • deductions $2,000.

    Mary and John own an equal share in the caravan (50% each).

    They will each need to include $2,000 at the ‘Other income’ label and $1,000 at the ‘Other deductions’ label on their individual tax returns.

    It is important that Mary and John keep records of their income and expenses, such as statements from their peer sharing platform, bank account and other invoices.

    Example 2 – Mainly income producing use of the RV

    Byron lives in Dubbo and purchased three RVs mainly as an investment and for income producing use. He uses a peer to peer sharing platform to advertise them for rent during the year.

    Byron has researched the market and found that North Sydney is a popular area for RV rentals. He stores the three RVs in North Sydney that are available for rent and he only uses one of the RVs privately for four weeks each year when it has no bookings.

    Byron’s tax reporting obligations are the same as John and Mary’s. However, in determining his apportionment of expenses that he can claim as a tax deduction, he can count the period of time that each RV was genuinely available for rent.

    For the two RVs that are rented or genuinely available for rent for the whole of the year, he can claim 100% of the expenses as a tax deduction. However, for the one RV that is privately used for four weeks, he has to reduce his deductions to take into account the period of private use, that is, he can only claim 92% (48/52) of the related expense.

    End of example
    Last modified: 06 Sep 2018QC 56766