BUENOS AIRES (July 25) (Reuters) – With Argentina’s inflation soaring 100% and the currency devaluing, computer scientist Luis, 33, has found an economic lifeline: renting out his Airbnb apartment for coveted dollars and finding a way to hide his income from the tax authorities.
Luis’ apartment in Buenos Aires brings in about $800 a month, 60% more than his IT salary, which was paid in pesos and was worth just $490 at black market rates in July last year when he quit to try freelancing.
He said the income Louis earns from his Airbnb rentals is paid in dollars into a digital account on the US payment platform Payoneer. Lewis said he then buys dollar-denominated stablecoins on offshore cryptocurrency markets, which he values in pesos on Argentine peer-to-peer exchanges — all under the radar of Argentine tax and financial authorities.
“I worked a lot, worked overtime [in IT] “I’m going to do something myself, work for myself and earn more,” said Lewis, who used only his first name to avoid being identified by the tax officer.
Reuters has found that thousands of landlords in Argentina are turning to Airbnb and other short-term rental platforms to shore up their income against runaway inflation — and many are avoiding currency controls and income tax on their earnings.
Reuters interviews with 18 hosts, agents, and property managers, analyzes of previously unreported rental data, and owner focus group reviews show that while some landlords report income, many keep these transactions off the books, benefiting from landlord-dependent regulations.
Reuters found that many hosts were struggling professionals rather than large-scale owners, striving to stay afloat amid an economic crisis that has left four in 10 Argentines below the poverty line.
When hosts trade dollars for pesos on informal markets, they divert money from the formal economy, contributing to a drain on foreign currency reserves that have left the country struggling to pay down debts and imports.
The trend of short-term rentals has pushed up local housing prices and made it difficult to find homes available for rent in pesos. Buenos Aires now has 1,200 homes available for rent in pesos, according to a register kept by the Argentine Chamber of Real Estate, up from about 8,000 in 2020.
Argentine hosts on Airbnb can receive payments to a local or foreign bank account in addition to Payoneer and Paypal, single host account options reviewed by Reuters and confirmed by Airbnb.
Deposits in a local bank account are converted from dollars to pesos at the official exchange rate. Argentine law also requires banks to report deposits over $400 per month.
Choosing to pay via an offshore bank account or a global platform — and transferring at a black market rate — offers an 88% higher yield and allows hosts to bypass tax authorities, according to a central bank source. But the source said that would be illegal.
“The only way for someone not to be legally exposed to using Airbnb is to make a transfer to a local bank,” said the central bank source, a payments expert who is not officially authorized to speak.
Short term rental boom
The terms and conditions on the Airbnb, Paypal, and Payoneer websites make it the responsibility of individuals, not businesses, to report income to local tax authorities.
Airbnb told Reuters in a statement that guidelines posted on its website advised hosts to register their short-term rental properties with Argentine authorities.
The company said this is the responsibility of each host, as well as an obligation to use legal payment methods.
“Hosts must comply with all applicable regulations, as clearly required by Airbnb’s Terms of Service, which all users must agree to in order to create an account on the platform,” Airbnb said in a statement.
The company collects information from hosts who use a US payment method for its own reporting to the Internal Revenue Service (IRS) in the United States, according to information on the company’s website.
Airbnb said about 40% of hosts in Argentina have used the platform to “help maintain expenses related to their current cost of living.”
Payoneer declined an interview request from Reuters. PayPal said that “as a global payments company, we comply with applicable laws and regulations.”
Argentina’s tax authority said it “always encourages people to declare” the income.
It is legal to use digital tenders to transfer assets to Argentina, though it is up to users to declare their income, said Ramiro Raposo, vice president of growth at the Argentina-based cryptocurrency payments firm.
“It is clear that tax evasion is not legal, but it has nothing to do with us,” he said.
Argentina’s short-term rental market has been booming since a 2020 law aimed at protecting tenants by limiting landlords to one rent increase per year.
Instead, the law has led to an explosion in the short-term rental market.
Data AirDNA shared with Reuters showed that more than 18,500 properties in Buenos Aires were listed on Airbnb in June. But Buenos Aires’ tourism ministry told Reuters that only 570 properties were registered in the city’s registry for short-term rentals in June.
AIRBNB is in the political spotlight
“We’re seeing more and more landlords turning to temporary rentals because they work in hard currency, dollars,” said Ariel Yeager, a real estate agent who said that short-term rentals now make up 90% of agency listings.
He said landlords who pay in dollars can earn twice the rent from a long-term contract in pesos because short-term tenants with access to hard currency have more purchasing power.
Tenants include international remote workers; He said students, medical tourists from neighboring countries, and Russians fleeing war and possible military service.
Gaston Levy, 38, a part-time writer and DJ, says he’s worried about finding a place to live when his lease expires in February. The landlord threatened to increase the rent, even though laws only allowed a rent increase once a year.
“It seems to me impossible to buy an apartment by earning pesos or to rent a house if the prices are in dollars,” he said.
In a focus group for real estate agents in Argentina reviewed by Reuters, hosts discussed the best ways to make money on Airbnb and exchange money for pesos without being detected.
“It’s a game you have to play,” said the 29-year-old host, who earns about $1,000 a month and asked not to be named to keep himself in the eyes of the tax man.
Gustavo, who rents an apartment for $1,500 a month for temporary residence through a local realtor, said he accepts pesos, but at black market rates. He said the government’s rate was “wrong”.
“We hope that soon there will be only one exchange rate and it will be better for everything,” he said.
Lawmakers and presidential candidates criticized the rent law and the growing short-term rental market in the October general election.
The four leading presidential candidates have spoken out against the rents law, and a lawmaker from the ruling Peronist coalition, Ana Maria Ianni, has proposed fining Airbnb if hosts fail to register with Argentine authorities.
“It’s a platform that does a lot of harm in the world in that regard,” said Ianni, vice chair of the Senate Tourism Committee.
She said the goal was not to put Airbnb out of business. “What we want is that when they offer a property for tourist accommodation, they do so by complying with this registry.”
Airbnb declined to comment on Ianni’s proposal.
(Reporting by Anna Katherine Brigida and Ileana Razowski) Editing by Adam Jordan and Susan Goldenberg
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