GST APP TAX REGULATIONS: WHAT YOU NEED TO KNOW

GST app tax regulations: what you need to know. The GST app tax rules NZ hosts and drivers will soon operate under will take effect from 1 April 2024. They’re already catching people out in the lead-up, usually because some assumes the old GST threshold rules will keep applying the way they always have. If you list a room on Airbnb(opens in new tab), rent out a holiday home on Bookabach(opens in new tab), or drive for Uber, this guide is for you. It also covers what happened to the transitional provisions that expired last year, and the mistakes that cost hosts money.

30-Second Read

• From 1 April 2024, platforms like Airbnb, Bookabach, Uber and similar apps must charge and collect 15% GST on ‘listed services’ — regardless of whether the underlying host or driver is GST-registered.
• If you’re not GST-registered, the platform pays 6.5% to Inland Revenue and passes 8.5% back to you as a flat-rate credit. You get to choose whether that credit counts as assessable income on your tax return.
• The $60,000 GST registration threshold still applies to your own registration decision, but the platform charges GST on your bookings either way.
• There’s also a transitional rule letting some pre-2023 properties exit the GST regime, but only if you act before 1 April 2025 — after that, the option disappears.
• Getting your GST registration status wrong with a platform is one of the most common — and most expensive — mistakes hosts make.
• These changes don’t replace the need to declare the income in your tax return

We work through the mechanics, both sides of the accommodation rules, ride-share and delivery, two worked examples, and a checklist to run through before your next Airbnb booking lands.

 

What Are the GST App Tax Rules?

From 1 April 2024, online marketplaces offering ride-sharing, food delivery and short-stay accommodation must charge, collect and return GST on those services. The legislation calls these “listed services.” The rule covers platforms like Airbnb, Bookabach, VRBO(opens in new tab), Uber and similar apps. The obligation sits with the platform, not the individual host or driver, regardless of whether that person is personally GST-registered or earns under the usual $60,000 threshold.

Popularly nicknamed “the app tax,” these rules bring gig-economy platforms into line with how GST already applies to comparable traditional businesses. A hotel charges GST on every room it sells. These rules put short-stay accommodation booked through an app on the same footing. They apply specifically to listed services and don’t extend to other goods or services simply because a platform happens to sell them.

Before these rules existed, a host earning under $60,000 a year from occasional Airbnb bookings simply didn’t charge GST at all. That was the same way that any small, unregistered business wouldn’t. That created a genuine pricing gap between a small, unregistered host and a registered hotel or motel selling the same kind of accommodation. The marketplace rules close that gap. They shift the GST obligation onto the platform itself, so the guest pays the same 15% regardless of whether the underlying host is registered.

How the Platform Rules Work

Suppliers — Uber drivers, Airbnb-style hosts, and similar — remain exempt from their own GST registration if their annual revenue (before expenses) stays under $60,000. Instead of the host registering, the platform itself handles GST charging, collection and payment to Inland Revenue on their behalf.

For hosts who aren’t GST-registered, Inland Revenue’s rules(opens in new tab) work like this:

1. The platform charges the guest 15% GST on the booking value.
2. It pays 6.5% of that to Inland Revenue
3. Then it passes the remaining 8.5% back to the host as a flat-rate credit. That credit roughly offsets the GST the host would have claimed on their own operating expenses, if they’d registered for GST.

Inland Revenue confirms hosts can choose whether to include that flat-rate credit as assessable income in their tax return. It’s the host’s call, not an automatic requirement either way.

Hosts who are already GST-registered don’t receive the supplementary 8.5% credit. They continue claiming their usual GST input credits on expenses through their own GST return. If they don’t opt out of the platform rules, the rules zero-rate their supply to the platform. That means they shouldn’t separately return GST on the payments guests make through it.

Short-Stay Accommodation: Not GST-Registered (Most Hosts)

If you’re not GST-registered, this is the position that applies to you from 1 April 2024 onward:

• The platform applies 15% GST to your nightly rate and any connected fees, such as cleaning charges, on every booking made through it.
• This happens whether or not your total earnings sit below the $60,000 registration threshold. The platform’s obligation doesn’t depend on your personal registration status.
• You receive the 8.5% flat-rate credit back from the platform, which usually deducts it from its own commission rather than paying it separately.
• Receiving that flat-rate credit means you can’t separately claim GST based on your actual expenses. The flat-rate credit replaces that, rather than sitting alongside it.
• While your accommodation supply sits inside the GST net, the underlying property itself doesn’t. If you sell the property later, that sale generally isn’t subject to GST, unless something else about your circumstances requires you to register.

Voluntary Registration

Voluntary registration for GST might still make sense even if you’re comfortably under $60,000, in one specific situation: you’re planning significant capital expenditure, such as a major renovation or extension. Registering lets you claim GST on that spend. It also brings the property itself into the GST net, though, meaning GST could apply on a future sale or change of use. That’s a genuine trade-off. It’s very important to run the numbers with your accountant before committing either way.

Watch That Threshold

If your platform earnings pass $60,000 in any 12-month period, you must register for GST in the ordinary way. That applies whether the increase comes from higher nightly rates, more bookings, or adding a second property. That is the same as any other business crossing that threshold. However, be aware that there are potentially significant GST liabilities on your property that can arise in this scenario. Hence, make sure you get the right advice from a property accountant before you register for GST

Short-Stay Accommodation: Already GST-Registered

If you’re already GST-registered — often because you run other taxable activities alongside your short-stay accommodation — the mechanics look different:

• The platform still charges GST on nightly rentals and fees by default. You, though, need to zero-rate your own supply to the platform rather than returning GST on it directly.
• GST on the guest’s payment goes straight to Inland Revenue via the platform. You declare that income as a zero-rated supply in your own GST return.
• You must tell the platform your GST registration status. If you don’t, the platform may mistakenly pass you the 8.5% flat-rate credit meant for unregistered hosts. If that happens, you must repay it to Inland Revenue.
• On an eventual property sale, the usual GST sale rules apply. That is, zero-rated if you’re selling to a GST-registered buyer for a taxable activity, or 15% GST if the buyer isn’t registered. Some transitional provisions may still let certain capital assets exit the GST regime in specific circumstances. Confirm this with your accountant rather than assuming either way.

Ride-Share and Delivery Drivers

The same underlying framework applies to ride-share and food delivery. If you drive for Uber or a similar platform, the platform charges GST on the fare or delivery fee. It remits 6.5% to Inland Revenue and passes 8.5% back to you if you’re not personally GST-registered. This is the same split as accommodation. If you’re GST-registered as a driver, you zero-rate your supply to the platform and continue claiming your own input credits in the normal way.

One point matters specifically for drivers: Inland Revenue treats your income under this rate regardless of your registration status. Your pricing and margin calculations need to account for the fact that a portion of every fare goes to GST from day one. It’s not just once you personally cross the $60,000 threshold. This differs from the old world, where an unregistered driver simply kept 100% of the fare and only started factoring in GST once they registered.

What Happened to the Transitional Rules?

When these rules first came in, Inland Revenue offered transitional relief for properties bought before 1 April 2023 and used mainly for personal purposes. Owners in that position had until 1 April 2025 to elect to exit the property from the GST regime. That election required them to repay any GST they’d previously claimed on capital expenses for the property.

As of writing, that window is still open – but it won’t be forever. If you own a qualifying property and don’t make that election before 1 April 2025, the option will disappear, and your property’s GST position will default to the standard rules described above. If you’re unsure whether your property qualifies, or whether this election makes sense for you, talk to your accountant well before the deadline rather than leaving it until the last minute.

A related, narrower provision still applies going forward, for assets bought after 1 April 2023. Owners can elect that a future sale of the asset won’t attract GST, provided they haven’t claimed GST on it and haven’t used it mainly to make taxable supplies. That’s a live option today, distinct from the closed 2025 transitional window.

Common Mistakes Hosts (and Drivers) Make

Not confirming GST status with the platform. This is the single most common error we see. If the platform doesn’t know you’re GST-registered, it may pay you the flat-rate credit meant for unregistered hosts. You then have to repay that money, sometimes with penalties and interest if you don’t correct the error promptly.

Assuming the property itself is now inside the GST net. For unregistered hosts, it generally isn’t. Confusing the GST treatment of the booking with the GST treatment of the property leads to unnecessary worry, and sometimes causes hosts to avoid a sale strategy that would actually be fine.

Missing the $60,000 threshold on a growing portfolio. Adding a second short-stay property, or simply enjoying a strong season, can tip combined revenue over $60,000 faster than hosts expect. Remember, that threshold measures revenue, not profit.

Assuming a change of government reversed the rules. Assuming these rules might quietly get delayed or watered down before they start. They’ve been legislated and are proceeding as planned — don’t assume 1 April 2024 will slip just because a rule feels new or unfamiliar.

Not adjusting pricing for the new GST cost. Some hosts who weren’t previously GST-registered didn’t factor the platform’s 15% GST charge into their nightly rate at all. They effectively absorbed the full cost themselves, rather than reviewing whether their pricing needed to change. The flat-rate credit only offsets part of that cost. Therefore, it’s worth reviewing your rates against comparable listings rather than assuming your margin has stayed the same as it was before April 2024.

Worked Examples

Aroha lists her spare room on Airbnb. Aroha isn’t GST-registered and earns around $18,000 a year from occasional Airbnb bookings. From her very first booking after 1 April 2024, Airbnb charges her guests 15% GST. It pays 6.5% to Inland Revenue and credits Aroha 8.5% of the booking value as a flat-rate credit. Aroha decides not to include that credit as assessable income on her tax return — entirely her choice under the current rules. Her total accommodation revenue stays well under $60,000, so she has no obligation to register for GST herself. If she ever sells the property, that sale won’t attract GST either.

Mark owns two holiday homes and is already GST-registered. Mark runs a separate GST-registered business. When he added his second Airbnb property, he decided to register that activity for GST too. This was mainly so he could claim GST on a planned renovation. Mark makes sure both platforms he lists on have his correct GST registration status on file. For this reason, neither pays him the 8.5% flat-rate credit meant for unregistered hosts. He zero-rates his supply to each platform in his GST return. He continues claiming input credits on his renovation costs and ongoing expenses in the normal way. He is aware of the implications of GST on sale of the properties, should he sell to a non-GST registered buyer.

Checklist Before Your Next Booking

• ✅ Confirm your GST registration status is correctly recorded with every platform you list on
• ✅ Track your total platform revenue against the $60,000 threshold, especially if you’re adding properties or increasing rates
• ✅ Decide whether to include the flat-rate credit as assessable income, and apply that decision consistently
• ✅ Confirm whether any transitional election applied to your property, and whether it was made before the relevant deadline
• ✅ Review whether voluntary GST registration makes sense before undertaking major renovations
• ✅ Keep records of every platform statement showing GST charged and any flat-rate credits received

Common Questions About the GST App Tax Rules

Do I need to do anything if I’m not GST-registered? Generally, no — the platform handles the GST charging and remittance automatically. You just need to make sure your registration status is correctly recorded with the platform.

Does receiving the flat-rate credit mean I’m now GST-registered? No. The flat-rate credit is specifically for hosts who aren’t GST-registered, and receiving it doesn’t create a registration obligation on its own.

Will I have to pay GST when I eventually sell my Airbnb property? If you’re not GST-registered and the property was never brought into the GST net, generally no. If you’re GST-registered, the usual GST sale rules apply, subject to any relevant elections.

Do I need to do anything about the 2025 transitional election now? Not immediately, but don’t leave it too late. You have until 1 April 2025 to decide — talk to your accountant well ahead of that date so you’re not scrambling at the deadline.

Summary

GST app tax rules NZ hosts and drivers are about to operate under boil down to a few consistent principles: the platform, not you, will generally handle GST charging and remittance; your own $60,000 threshold still governs whether you personally register; and the flat-rate credit exists to roughly offset what you’d otherwise claim if registered. The one part of the rules worth acting on now, rather than later, is the transitional election — you have until 1 April 2025 to use it, and it’s worth deciding well before that date rather than leaving it to the last minute. Beyond that, the biggest risk won’t be the rules themselves. It’ll be getting your registration status wrong with a platform, which we expect to be the most common — and most avoidable — mistake once these rules are live.

Talk to EpsomTax.com About Your GST Position

The app tax rules brought every Airbnb, Bookabach and Uber host into the GST net, whether they’re registered or not. The right move for your situation still depends on your revenue, your registration status, and whether you’re planning any major renovations.

Contact EpsomTax.com to work through what these platform rules mean for your specific listing. We can confirm whether you need to register, help you avoid the registration status mix-ups that trip up short-stay hosts, and make sure you’re not caught out if your revenue creeps past the $60,000 threshold.