By Anna-Catherine Brigida and Eliana Raszewski

BUENOS AIRES As Argentina's inflation rate soared past 100% and the value of the currency slid, IT worker Luis, 33, found an economic lifeline: renting out his apartment on Airbnb for coveted dollars and finding a way to hide his earnings from the tax authorities.

Luis's apartment in Buenos Aires brings in around $800 a month, 60% more than his salary in IT, which was paid in pesos and worth just $490 at the black market rate by July last year, when he quit to try freelancing.

The income Luis earns from his Airbnb rental is paid in dollars into a digital account on US payment platform Payoneer, he said. Luis said he then buys dollar-denominated stablecoins on overseas crypto markets, which he barters for pesos on peer-to-peer exchanges in Argentina -- all under the radar of Argentine tax and financial authorities.

"I was working so much, putting in extra hours [in IT], and I said, 'to hell with it," said Luis, who only used his first name to avoid being identified by tax authorities. "I'm going to do my own thing, work for myself and earn more."

Thousands of Argentine property owners are turning to Airbnb and other short-term rental platforms to boost their earnings against runaway inflation -- and many are avoiding foreign exchange controls and income tax on their earnings, Reuters has found.

Reuters interviews with 18 hosts, real estate agents and officials, analyses of previously unreported rental data and reviews of landlord chat groups showed that while some property owners do declare their income, many keep these transactions off the books, taking advantage of regulations that rely on landlords to come clean.

Many of the hosts, Reuters found, were struggling professionals rather than large-scale landlords, looking to stay afloat amid an economic crisis that has left 4-in-ten Argentines under the poverty line.

When hosts exchange dollars to pesos on informal markets, they divert funds from the official economy, contributing to a drain on foreign currency reserves that has left the country struggling to make payment on debt and imports.

The short-term rentals trend has pushed up local house prices and made it harder to find homes available for rent in pesos. Buenos Aires now has 1,200 homes available for rent in pesos, according to a registry maintained by the Argentine real estate chamber, down from about 8,000 in 2020.

Argentine hosts on Airbnb can receive payments to a local or overseas bank account as well as Payoneer and Paypal, options on one host's account reviewed by Reuters showed and Airbnb confirmed.

Deposits to a local bank account are converted from dollars to pesos at the official exchange rate. Argentine law also requires banks to report deposits that exceed $400 a month.

Opting for payment through an overseas bank account or a global platform -- and converting at a black market rate -- offers an 88% better return and allows hosts to circumvent tax authorities, according to a central bank source. But the source said that would be illegal.

"The only way that one is not legally exposed using Airbnb is making a transfer to a local bank," the central bank source, a payments expert who was not authorized to speak on the record, said.

BOOM IN SHORT-TERM RENTALS

The terms and conditions listed on the websites of Airbnb, Paypal and Payoneer hold individuals, not companies, responsible for reporting income to local tax authorities.

Airbnb told Reuters in a statement that guidance published on its website advised hosts to register their short-term rental properties with Argentine authorities.

Doing so was the responsibility of each host, as is the obligation to use legal payment methods, the company said.

"Hosts must comply with all applicable regulations as clearly required in Airbnb’s terms of service that all users must agree to in order to create an account on the platform," said Airbnb in a statement.

The company does collect 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 website.

Airbnb said about 40% of hosts in Argentina used the platform to "help to maintain the expenses related to the current cost of living."

Payoneer declined a Reuters' interview request. PayPal said that "as a global payments company, we adhere with applicable laws and regulations."

Argentine tax authority AFIP said that it "always encourages people to declare" income.

Ramiro Raposo, Argentina-based Vice President of growth for U.S.-based cryptocurrency payment firm Bitwage, said using the digital tender to transfer assets into Argentina was legal, though it was up to users to then declare their earnings.

"Evading taxes is clearly not legal, but that has nothing to do with us," he said.

Argentina's short-term rental market has been booming since the adoption of a 2020 law that sought to protect renters by limiting landlords to a single rent hike per year.

Instead, the law led to an explosion in the short-term rental market.

Data shared with Reuters by AirDNA showed that more than 18,500 properties in Buenos Aires were listed on Airbnb in June. The Buenos Aires tourism department told Reuters, however, that just 570 properties were listed on the city's register of short-term rentals in June.

AIRBNB IN POLITICAL SPOTLIGHT

"We're seeing owners increasingly turning to temporary rentals, because they are in hard currency, in dollars," said Ariel Yeger, a real estate agent who said short-term rentals now make up 90% of the agency's listings.

He said property owners paid in dollars can earn double the rent of a long-term contract in pesos, because short-term renters with access to hard currency have more purchasing power.

Renters include remote international workers; students and medical tourists from nearby countries and Russians fleeing the war and potential military service, he said.

Gaston Levy, 38, an administrative worker and part-time DJ, said he worried about finding a place to live when his lease ends in February. His landlord was threatening to raise the rent, despite laws only allowing one increase a year.

"It seems impossible to me to buy an apartment earning in pesos, or renting a place if the prices is in dollars," he said.

In a chat group for Argentine landlords reviewed by Reuters, hosts discussed the best ways to get paid on Airbnb and to exchange the funds back into pesos without being detected.

"It's a game you have to play," said a 29-year-old host earning about $1,000 per month who asked not to be named to remain under the radar of tax authorities.

Gustavo who rents out an apartment for $1,500 a month for temporary stays via a local real estate broker said he accepted pesos, but at the black market rate. The government rate is a "fiction," he said.

"Hopefully soon, there will be just one exchange rate and that will be better for everything," he said.

The rentals law and the growth of the short-term rental market have come under fire from legislators and presidential candidates in the October general elections.

The four most prominent presidential candidates have spoken out against the rentals law and ruling Peronist coalition legislator Ana Maria Ianni has proposed fining Airbnb if hosts do not register with Argentine authorities.

"It's a platform that is causing a lot of harm around the world in this regard," said Ianni, who is vice president of the Senate's Tourism Committee.

The aim was not to put Airbnb out of business, she said. "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-Catherine Brigida and Eliana Raszewski; Editing by Adam Jourdan and Suzanne Goldenberg)