The Finnish Tax Administration says that providers of Airbnb and other short-term rentals have failed to report rental income amounting to over 15 million euros in 2018. This is more than double the seven million euros worth of unreported earnings in 2017.
Through landlords’ payment transactions, the taxman has identified nearly 9,000 short-term rental providers, of which a large number are Airbnb renters. While the number of rentals has remained the same between 2017-2018, the number of owners who haven’t reported their income has risen.
In 2017, 2,400 people failed to report rental income, but last year, the number was 3,000.
All rental income must be reported to tax authorities as it is treated as capital income.
“Risk of being caught is thought to be low”
A part of the unreported income is unintentional and due to ignorance, but some of the renters are consciously trying to increase their by profits, according to Timo Puiro, chief inspector at the Tax Administration’s corporate taxation unit.
“We have been following this matter for several years and it looks like rental providers are taking risks and not reporting their income,” Puiro said.
About half of the 8,800 landlords did not own the properties themselves, according to authorities.
“They may be tenants themselves seeking income from short-term rentals to cover their living expenses. It could also be students or those on the move who want to want to make use of the free space in their homes.” Puro observed.
Authorities are also aware of high-income housing investors who have not reported rental incomes.
“Some of them used to be traditional landlords. They may have moved on to a short-term rental arrangement in the hope of making better returns.
“Maybe the risk of being caught is thought to be low,” Puiro thinks.