go to content
Politics

George Osborne Just Gave A Massive Tax Break To People Who Rent Out Rooms On Airbnb

You can now earn up to £7,500 a year from lodgers without paying income tax.

Posted on

People who use Airbnb to rent out rooms will be able to earn thousands of pounds more every year without paying any tax, according to a line buried in the budget.

From April next year, the government has said it increase tax relief on the so-called "rent-a-room" allowance from £4,250 to £7,500 every year. The announcement was made in the budget document published after Chancellor George Osborne's speech on Wednesday afternoon.

The subsidy only applies to those who rent out rooms in their main residence and will therefore not be applicable to buy-to-let landlords. But one side-effect is that people who regularly let out rooms in their house services such as Airbnb will be able to earn £3,250 extra every year without paying any income tax.

According to the budget, the rent-a-room tax-free allowance had been frozen since 1997 and is now being increased due to the change in rent prices in the last 18 years.

UK Treasury / Via gov.uk

In a section on its website called "Responsible Hosting" Airbnb recommends British homeowners to take advantage of the rent-a-room relief if they're using the service. The only requirement is that the lodger must live in the same area as the rest of the household and not in a separate self-contained part of the building.

Siraj Datoo is a political reporter for BuzzFeed News and is based in London.

Contact Siraj Datoo at siraj.datoo@buzzfeed.com.

Got a confidential tip? Submit it here.