Sakura Haven Homestay Hosts

Do I Have to Pay Tax on My Homestay Payments?

General advice only. Please consult your financial adviser for details specific to your situation.

No, homestay payments are generally not considered taxable income under section 6-5 of the ITAA 1997.

This applies if:

1. The host provides accommodation to a student under a homestay arrangement.
2. The host accommodates no more than one or two students at a time.
3. Payments received are used to cover the student's household expenses, such as room, food, power utilities, and Wi-Fi costs.
4. Any surplus after covering expenses is minimal; it is largely a supporting, cultural experience for the Host.

Explanation

Under section 6-5 of the ITAA 1997, an Australian resident’s assessable income includes all ordinary income from various sources. Rental income is typically considered assessable income. However, payments made under a non-commercial or domestic arrangement, such as board or lodging, are not classified as assessable income (FC of T v. Groser 82 ATC 4478; 13 ATR 445).

Homestay payments are determined by educational institutions to cover accommodation costs for the student, including food, utilities, and household expenses. These payments are not set at commercial rental rates and do not include a profit component for the host. While there may be small surpluses at times, these are generally insignificant compared to the overall costs incurred by the host.

For this reason, homestay payments received under a domestic arrangement are not classified as taxable income under section 6-5 of the ITAA 1997.

For further guidance, hosts may also refer to resources such as 'Your Life Choices' on how the Government Centrelink views income from homestay students.

Source: Australian Taxation Office, Commonwealth of Australia