New fee structure

New fee structure

This is absolutely a horrible decision on AirBnN’s part. It completely penalizes the host.  We have been hosting for over 10 years and a Superhost for the entire time.  I will be thinking hard about staying on with AirBnB bead on this policy change. It adversely affects the host too much.  Especially on the Income tax and Rooms& Meal Tax

 

38 Replies 38

What I would like to know is what canvassing did Airbnb do to check what the majority of landlords want.  They say  "Many hosts tell us this makes pricing difficult."  They could equally say "Many hosts like the existing way that service fees are applied".  I think Airbnb should answer this question.
The service fee for guests in Greece is 16.7% - 16.9%, not the 15% idealised rate mentioned in the Airbnb blurb, with a 3.6% - 3.7% landlord fee.   
I tried the Airbnb tool to change the advertised rates and it changed a nightly rate of €135 to €161, an increase of 19.25% - this is an increase of 2.5% on the current guest rate of €157.87 (€135 + €22.87).  The net amount the landlord will receives becomes €136.05.   Hardly a neutral pricing tool.
So not only is Airbnb not reaching out to see if all landlords agree with their proposed change, their tool to automatically update the nightly rates is flawed.
Oh, and similar to the comments imade by Vanessa2864, here in Greece we will be taxed on the uplifted new rate without being able to deduct the 15.5% as an expense.  Until now, we were taxed on the advertised rate without being able to deduct the 3.6% as expenses.   So more taxes to pay as well.

Finally, if Airbnb at some future date decide to increase the 15.5% (which they will), we will have to recalculate the rates again.

I had no idea the Greek system worked the same way as Italy's, Katerina. Yesterday, "italiaOggi" “ one of Italy's leading financial newspapers, ran the following headline: "Airbnb quadruples host fees: short-term rental prices could rise by as much as 36.75%"

 

According to the paper, hosts who want to keep earning the same net income will have little choice but to raise their nightly rates. Depending on their tax situation, prices may need to increase anywhere from roughly 25% to nearly 37%. In practical terms, a €100-per-night listing could end up costing guests between €125 and €137.

 

The reason is simple. Starting on October 13, Airbnb will replace its long-standing fee structure for non-professional hosts, increasing the host commission from 3% to 15.5%. That's a staggering 417% increase and a complete departure from the pricing model Airbnb has used since 2008, where service fees were shared between hosts and guests.

 

But there's another piece of the story that's easy to miss.

 

Even if a host decided to register as a business and opt into Italy's simplified tax regime for small entrepreneurs (“regime forfettario”) - often seen as the most tax-friendly option - they wouldn't actually be able to deduct these higher costs. Under that system, business expenses aren't deducted individually because the government already assumes a fixed level of expenses through preset profitability coefficients. Only businesses operating under the ordinary tax regime can deduct their actual costs.

 

So simply raising prices isn't the obvious solution Airbnb seems to suggest.

 

You end up paying much higher commissions, becoming less competitive, and if you increase your rates enough to offset those costs, you often end up paying more tax as well.

 

And there's more.

 

If your business is registered for intra-EU VAT transactions, Airbnb's invoices now arrive without VAT because they're issued by a company established elsewhere in the European Union. However, under Italy's reverse-charge rules, you're still required to calculate and pay that VAT yourself. It's not recoverable, and it has to be paid by the 16th of the following month.

 

It's not a disaster. It's worse. It's another administrative headache.

 

And, as anyone who runs a small business knows, it's rarely the big crises that wear you down. It's the endless accumulation of small bureaucratic burdens that slowly turn a business into a full-time exercise in paperwork, deadlines, and accounting.

 

These days, there's a growing sense of quiet disappointment among Italian hosts. Many industry insiders see this dramatic fee increase for what it is: a bad deal. The house always wins, and you're left holding fewer chips every time you sit down at the table.

 

Once trust starts to disappear, people do what they've always done. They look for another way.

 

Some hosts will try to build direct relationships with their guests and rely less on intermediaries. Others will move to Italian booking platforms that charge lower or more flexible commissions. Not because they expect to find paradise somewhere else. Simply because, sooner or later, you start looking for the place where you lose a little less.

 

In Italy we have a word for that instinct: “arrangiarsi”. It roughly means "finding a way to make things work," even when the system seems determined to make them harder. Italians often dismiss it as a flaw - as if it were merely getting by. In reality, it's usually one of our greatest talents.

 

 

@Vanessa2864 

 

I've been told that the Italians and greeks tax you on income you've never earned. I was skeptical at first, assuming these hosts had simply never inquired with a tax advisor, and simply wrote checks to the government without making any declaration. But apparently there's some truth to it.

 

Considering how unfair and unethical such a mandate would be, I would expect that these cases would be heard in Italian and Greek courts on a daily basis. It's not just taxing you for income you never earn, but it's also double and triple taxation of the same money. That's shocking that they can get away with that. 

 

Ok, having said that, you too obviously have tabloids, and using tabloid "fury and outrage" maths, I suppose they can come up with a sensational figure like "quadruple fees", but there isn't a shred of actual evidence to support that. 

 

Notwithstanding your obscene tax system (which is what you really should be screaming about) the industry standard "single fee" model has no effect on bookings, earnings, prices or anything else. It's as if nothing happened. Nobody notices. And for me, the fees are slightly less than the split fee model. 

 

I've been on it for years now.  Nobody's noticed. Nothing. Everything is the same as before. 

 

So maybe you all should be asking your tax authorities to explain why you're paying tax on taxes, and paying tax on other's taxes, especially considering that those others have to pay them too. 

 

Good luck with that.

Hi @Katerina516 

The 15.5% is roughly 19.22% in Greece because Airbnb has to add 24% VAT on the service fee (this percentage varies in each country).

Thanks  @Shelley159 for the clarification.  If you are not VAT registered, the Airbnb calculation isn't appropriate.

No @Katerina516 it's relevant for everyone. The VAT is only on the service fee. Airbnb is VAT registered, so there's VAT on its service fees (whether the host has to charge VAT on the accommodation fee or not).

Many thanks -  that explains the 19.2%.  I will still work through the calculations on my spreadsheet, but my preliminary calcs suggest that by maintaining 117.6% of my advertised rate to make it price neutral for guests, I will be 3.6% worse off after tax.   So, I will have to increase the +17.6% that guests currently see. 
Why can't Airbnb just leave it as it is?

It's easier to just run the update tool @Katerina516 . Two advantages:

 

1) It makes sure all fees (including cleaning, etc.) are correctly updated for your region 

 

2) It switches your settings to the single fee structure. Then all.is ready for the fee structure change.

 

Like hosts in Italy and Greece, hosts in Canada will also face higher taxes having to add 13% HST on top of the new higher prices.  So Canadian hosts will need to increase prices by 2-3% more than the 15.5% combined fee, to cover increased payouts to the Canadian government.  Thanks, Airbnb.  This really simplifies things. (NOT!)

 

 

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