Non US Residents BE FOREWARNED

[Mark1461]

I just had a nasty surprise and got 1/3 less income from my vacation rental than I thought.

When I listd my week for rent I made the mistake of using AirBnB's recommended market price - it end ed up begin less than half of what I could have gotten. To add insult they told me the amount I would be getting upon checkin but 1/3 less arrived in my account. That's very misleading.

AirBnb is quite deceptive in that it doesn't disclose up front that they will be taking 30% off the top of any rental for US Tax Withholding. This is double taxing for foreigners as we need to declare that income in our home country and pay tax on it. 

So be forewarned - if you are a foreigner but are renting property that is in the US you are going to lose 30% off the top. Price your unit accordingly or better still use VRBO or other sources who do not withhold.

[Marit-Anne0]

@Mark1461 

Check if there is a tax agreement between the two countries.  Among other things,  they are in place to avoid double taxation.

[Mark1461]

Thanks Marit. Yes, there is an agreement between Canada (my home) and the US. In the past AirBnB honoured that and did not withhold but now they are telling me things have changed and they are required by law to withhold 30% from every foreigner. Perhaps it's a new Trump administation thing? 

If this is something they are now doing to every foreigner it won't take long for the word to get out and people jump ship. I understand VRBO does not withhold so I'm doing my hosting through them from now on.

[Marit-Anne0]

@Mark1461 

I do not know about Canada and the US, but here in France both airbnb and VRBO (HomeAway group) will report rental income to the tax authorities from July 1st of this year.