The number of Airbnb listings in Australia is climbing steeply, with one in six Australians already using the service.

Despite the growth, confusion reigns with mixed rules and regulations that are hard to interpret, even by those who have implemented them. To help you make sense of them, here are a few things to be aware of before you start dreaming of the benefits of home sharing:

Airbnb on iPhone

The council may have the final say

Whether or not you can legally list your property for short-term stays through home-sharing sites such as Airbnb and Stayz is actually determined by your local council, not your owners corporation.

Short-term rental accommodation is currently banned in most residential areas in NSW, with only 12 councils allowing homeowners to lease their homes, and further zoning restrictions within those areas. There are also specific and varying regulations within each council – some require council consent, others that you provide meals, and so on.

In Queensland and Victoria, some councils require development permits for owners to be able to rent out their properties legally, with conditions relating to the number of people renting the space, and where the building is located. Owners can be ordered to pay neighbours’ compensation

It’s not always up to the owners corporation

In Victoria and Queensland, owners corporations and bodie corporates cannot restrict or make rules that prevent other owners from putting their properties on short-term accommodation websites such as Airbnb.

You can be given a hefty fine

Councils are cracking down on illegal short-term accommodation arrangements. In 2014, the City of Sydney and Randwick Council threatened unauthorised Airbnb hosts with fines of over $1 million.

In Queensland, and currently being implemented in Victoria, owners can be ordered to pay neighbours’ compensation, as well as any damage caused by their unruly guests to common property.

You’re not fully protected against damages or incidents

Airbnb automatically provides Australian hosts with host protection insurance of up to $1 million, however it doesn’t cover damage to shared or common property. It also doesn’t always cover you if a guest is physically harmed while on your property.

To ensure you’re covered for most circumstances, it may be worth investing in home insurance and contents insurance, and to double check that it doesn’t restrict claims if the property is used as a business.

It can affect your insurance premium

Due to the higher level of foot traffic and increased wear and tear to common property, it’s also worth noting that hosting on Airbnb may increase your owners corporations’ insurance premium. Furthermore, if the use of the building is not lawful, it may invalidate the insurance policy entirely.

It’s taxable

Whether you’re renting your entire home or just a single room on Airbnb, it’s important that you declare your earnings at tax time. The Australian Taxation Office has their eye on Airbnb hosts and has stated it will be increasing auditing of the properties currently listed.

On the other hand, you can claim expenses such as internet and phone use, water, power and even repairs and maintenance.

There’s legal ambiguity

For the most part, the laws that apply to short-term letting have yet to catch up with the technology that has made it so popular. The rules and regulations vary greatly state to state, and are different depending on which council and zone you live in. In New South Wales and Victoria, two separate inquiries into the adequacy of the regulation of short-term holiday letting are still being considered.

The best way forward it to check your local council’s rules and regulations and make sure you have a valid insurance policy to protect you against any risks.