Many of us are looking for ways to increase our income and make sure that we are as financially secure as possible. The good news is that there are various ways that you can try to increase what you earn and bring in more money.

One of which is with your property. If you are lucky enough to live in an area that someone else may want to stay in, such as a coastal region or a city, then you may be able to rent it out to short-term tenants.

There are several ways to do this; however, one that has seen an increase in popularity of late is AirBnB. AirBnB is a great way to increase your income, simply by renting out a property you own.

Are you wondering what tax implications come with renting out a property through AirBnB? Here are some of the key things that you need to know.

If you live in the property at the same time

If you own a property that has several living spaces, meaning that you could rent out a room or part of the property whilst you are still living there, then you may find that you can apply for room relief. This relief sees you earn up to the set threshold for that tax year, completely tax-free.

For the tax year 21/22, this is set at £7,500, which means that you don’t have to pay any tax up until this amount. Whilst earning money, simply by renting out a room within your property.

If you don’t live in the property

If you are renting an additional property that you own, such as a holiday home or somewhere that you only stay at when working in the area. Then the tax implications are different. You will need to be pay tax at your normal rate, which you can check on the HMRC website to find out more about.

Keep in mind that if you currently have a job bringing in income, this will impact the tax that you can expect to pay.

It is worth keeping in mind that you can claim tax liability on several expenses if you are in this situation. This includes landlord insurance, the fees you need to pay for AirBnB, and costs you may have to pay to clean the property.

It is also important to note that if you have lived in a property as your main residence and you then rent it out, you may have to pay capital gains tax when you want to sell it on. However, this will depend on the amount that you sell it for and your personal circumstances.

No matter the reason, renting out your property to make more money is a great way to boost your income and help you improve your financial situation and ensure that you can save money for the future.

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