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Using airbnb causes loss of primary residence status for property tax purposes

We had qualified for a senior property tax freeze but when I submitted the renewal application required every 3 years I declared the income received from Airbnb along with our social security income. While this did not put us over the income threshold we were informed that even though the amount was small our property ceased to be primary residence which was a requirement for senior freeze. Also we are required to submit a 1099 from Airbnb regardless.
I fail to see the point of that as we submitted a statement from the Airbnb site showing amount paid for 2015. the Airbnb website states that IRS does not require them to send out 1099’s to people grossing less than $20K, but that does not help people like us who are stupid enough to declare it as income on our tax returns. I have requested a 1099 and am awaiting a response.

At the moment it looks as though we will not qualify for a senior freeze any longer simply because we rented out a spare room for a few nights. Our increase in property taxes will most likely exceed any income we have received from Airbnb, so we will have not only had the extra work for nothing, but will be out additional money spent on guest accommodations, like linen, door locks, coffee, towels, food etc. While we will honor the upcoming reservations we cannot afford to take guests in 2017.
We are not blaming Airbnb, but hope this will save other people a similar surprise.


Sorry this has happened to you, but thank you for putting it here for others who may need this information!

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May I ask where you are? These sorts of property tax laws are highly localized.

Also, I’d fight it. They must be confused and not realize that you are living in the home. Honestly, a lot of people don’t know what Airbnb is. They just assume if you have income from the home that you aren’t living there and you’ve rented it out.


Is this in the US? Can’t give advice without location.

Here in Boulder, the City declares that it is your primary residence if that is where your car(s) and voting is registered, and it is deeded to you and not an LLC. Also, not applicable to you, your child’s school address has to be at your “primary” residence. I’m in a unique situation because I always own at least two, and sometimes more, houses in our county since I flip houses so I am acutely aware of this requirement. Ask them where in the statutes you can find a definition of “primary residence” that says that using it occasionally as a rental disqualifies your property for the senior property tax freeze. If you’re in the United States, google “[your state] statutes online”. If you’re in one of 13 states or Puerto Rico, you will see a page for LexisNexis (http://www.lexisnexis.com/hottopics/michie/), which will give you access to most of your state’s statues. Or, it may be a local ordinance. Either way, ask them to show you exactly where “primary residence” is defined and read it to see if it lists any disqualifiers or limitations.


Thank you all for your responses. I do realize that every county is different, BTW my county is Pinal, in AZ. In the past I have contacted them about other issues, zoning, building regs and even property tax and have always had helpful and courteous responses. Sadly, nothing stays the same, as this time the person in charge was very hostile, accusatory and aggressive. They do define primary residence property on their website, and ours complies with that definition.They do not make any sense as in my renewal I have to give evidence of DOB to prove that I am not younger than I proved 3 yrs previously. Had I found a way to get younger I wouldn’t need ant tax breaks because of all the books and tv shows!

In other words the whole thing is a complete farce, but if you don’t play their game , you lose. I really posted this as a warning to other Hosts who make an honest declaration of their income when as there are no 1099’s. The chances are they are not going to know.Yes, I was a fool. I have made a lot of mistakes but I try not to repeat them so I am not a total fool, am I?


Gosh, so sorry. I am assuming the freeze is the same thing as an exemption here in Hawaii. I’m glad now that my CPA forces me to take it as a regular rental deduction and not a business.

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I had shown this as miss. Income, I.e., not business income.

Keeping your sense of humor slows aging so you are on the right track. I assume you are going to fight this. Please keep us posted. I don’t qualify for the exemption yet here in El Paso TX but it’s good to know I need to keep up with this as a possible issue.

Honesty is not always rewarded

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Absolutely true. They see "rental income’ and they think ‘rental property.’ When I was looking for additional liability that covered me with renters it was obvious how few insurance people knew what I was talking about. Even Geico didn’t understand. I have no reason to think local municipalities are any more well informed. In a way, Airbnb is bringing back the old concept of a border - although short term. It is an odd hybrid.


Unless the reward in intrinsic, not extrinsic. In other words, honesty is it’s own reward, I don’t expect the government to reward me.


@KKC Not only are you my Host Guru you are quickly becoming my Spiritual Guru, as well. :wink:


Perhaps a quick consult with a real estate attorney is in order?

This sounds so sad. I hope you can find a way to fight it.

In my experience, there is not such thing as a “quick consult” when it comes to attorneys. Plan to spend at least $500.

I don’t have very much experience with this, but in the past when I’ve had a little difficulty I spoke with a lawyer to get his thoughts before actually hiring him.

The definition of rental property in Arizona according to the statute ARS 33-1901 is as follows: “Residential rental property means property that is used solely as leased or
rented property for residential purposes.”

My property is NOT used solely as rented property so I fail to understand why renting out a spare room occasionally negates my primary residence status and changes it to a “rental property” in the eyes of Pinal County. Any quick consult with an attorney would cost $$$ as Sandy2 rightly states, so I will have to fight this on my own on the grounds that my property does not fit the legal definition of a rental property.

Due to my ex-husband, who is an attorney, I unfortunately have lots of experience acting in pro se because he kept taking me to court on custody issues (we always settled, dismissing his claims – had him sign a stipulation last time, in May, that he won’t do it ever again!). So, my advice is to find your on-line state statutes, google case law that pertains to your issue (keep rewording the case law search until you find what you need), go to the county court web-page for template motion and responses. If you find that you are in over your head, then hire an attorney. My ex spent at least $60K a shot on attorney’s fees every time he filed. Those fees add up so quickly. Good luck!

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But they did punish monetarily

Well, if you get audited and you failed to disclose income you’ll get punished for that too. The problem isn’t that the OP was honest, it’s that his county doesn’t understand what Airbnb is.

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