Airbnb to start collecting, paying taxes in B.C.
Airbnb has reached an agreement with the province that will see the company collect, and pay, taxes on all short-term rentals booked in B.C.
Airbnb representative Alex Dagg, public policy manager in Canada, said the agreement is the first of its kind in this country.
“This is a defining moment for Airbnb in British Columbia,” she said. “These changes are a welcome opportunity to continue helping the province and its residents benefit from the positive economic impacts of home sharing.”
Finance Minister Carol James said once the needed legislative and regulatory changes are made, Airbnb will begin collecting the eight per cent provincial sales tax as well as the municipal and regional district tax (MRDT), which runs up to three per cent, depending on the municipality.
James added that municipalities will continue to have the authority to regulate short-term rentals. In November, Vancouver city council adopted policies around short-term rentals in the city, which are expected to go into effect in April. The regulations allow residents to rent out their principal residence on a home-sharing platform, with the exception of secondary suites and laneway homes, as long as they pay the appropriate licensing fee.
The city released a statement following the annoucement saying it welcomes the move. In November Vancouver asked the province to expidite the levying of taxes on short-term rentals to help level the playing field for hotels and bed and breakfasts, and requested that the resulting tax revenue be used to fund affordable housing.
“The City looks forward to working with the Government of B.C. to successfully roll-out the new agreement, and we hope that similar agreements can be reached with other short-term rental platforms,” the statement reads.
“British Columbians want access to the sharing economy — and they want it to be fair,” James said Wednesday morning. “This initiative will provide additional revenues to address housing affordability and it improve tax fairness for all British Columbians.”
James added that there will be more news around affordable housing in the coming budget.
She said the province estimates Airbnb will remit about $16 million in PST and an additional $5 million through the hotel tax. The MRDT funds are passed on to municipalities to be used support tourism marketing and programs.
Airbnb will take care of collecting and remitting the taxes on behalf of its hosts. The company also has an agreement in Quebec to collect a 3.5 per cent tax on lodging. Dagg said Airbnb first began collecting and paying taxes in Portland. Today the company has tax agreements in several other countries, including France and Indian, and the states of Michigan, Nevada and California.
There are 18,500 Airbnb hosts in the province, about 6,000 of which are in Vancouver.