Airbnb Hosts: Tax Guide

Room in Your Home vs Whole Property

The tax treatment depends on what you’re renting:

A room in your own home — you may qualify for the Rent-a-Room Scheme (£7,500 tax-free)
A whole property (or a property you don’t live in) — this is property income and follows normal rental income rules

The Rent-a-Room Scheme

If you let a furnished room in your main home, the first £7,500 per year is completely tax-free. This includes Airbnb income. If you earn less than this, you don’t need to report it.^[1]

If you earn more than £7,500, you can either:

Deduct the £7,500 allowance instead of actual expenses, or
Use actual expenses and ignore the scheme

Whole Property Lettings

If you rent out a whole property on Airbnb, it’s treated as property income. You report total rental income and deduct allowable expenses on your Self Assessment return.^[2] Under Making Tax Digital, landlords with qualifying income over £50,000 will report this through MTD Income Tax software from April 2026.

The £1,000 Property Allowance

If your total property income (not just Airbnb) is £1,000 or less, the property allowance covers it tax-free. You can’t use both the property allowance and Rent-a-Room Scheme.^[3]

Allowable Expenses

If you’re using actual expenses (not an allowance), you can deduct:^[2]

Airbnb service fees
Cleaning costs
Laundry and linen
Utilities (proportion for the let period)
Insurance
Repairs and maintenance
Mortgage interest (as a 20% tax credit for residential lets)

Airbnb Reports to HMRC

Under the new digital platform reporting rules, Airbnb is required to share your hosting income with HMRC. This means HMRC knows how much you’ve earned, so accurate reporting is essential.^[4]

Council and planning: Check with your local council about any restrictions or licensing requirements for short-term lets in your area. Some areas require planning permission for Airbnb-style hosting.

Frequently Asked Questions

Do I have to pay tax on Airbnb income in the UK?

Yes. Airbnb income is taxable in the UK. However, if you rent a room in your main home, the first £7,500 per year is tax-free under the Rent-a-Room Scheme. If you earn less than £1,000 from property, the property allowance covers it automatically.

What is the Rent-a-Room Scheme for Airbnb hosts?

The Rent-a-Room Scheme lets you earn up to £7,500 per year tax-free from letting a furnished room in your main home. This includes Airbnb income. If you earn below the threshold, you don’t even need to report it to HMRC.

Does Airbnb report my income to HMRC?

Yes. Under the digital platform reporting rules, Airbnb is required to share your hosting income data with HMRC. This means HMRC knows how much you’ve earned, so accurate reporting is essential.

What expenses can I claim as an Airbnb host?

If you opt to use actual expenses instead of a tax-free allowance, you can deduct Airbnb service fees, cleaning costs, laundry, a proportion of utilities, insurance, repairs, and mortgage interest (as a 20% tax credit for residential lets).

Sources

Rent a Room scheme — GOV.UK
Renting out your property — GOV.UK
Tax-free allowances on property and trading income — GOV.UK
Reporting rules for digital platforms — GOV.UK