Airbnb and VRBO hosts in BC: GST, PST and income tax
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The platform collects some of the tax and none of the income tax. What it collects depends on the tax, and on whether you are registered.
Short answer: income from an Airbnb or VRBO rental is usually rental income on Form T776, or business income on Form T2125 if you add services such as cleaning during the stay or meals. PST at 8% and the municipal and regional district tax (MRDT) apply to short-term accommodation in BC, and a platform that is an online marketplace facilitator collects them on its bookings. GST applies to stays under a month at more than CAD 20 a night: the platform collects it if you are not registered, and you charge it if you are. A rental that does not comply with provincial or municipal rules loses its expense deductions.
Rental income or business income?
The CRA looks at the number and kind of services you provide. Renting the space with basic services such as heat, light, parking and laundry usually means rental income from property, reported on Form T776. Adding services such as cleaning, security or meals can make it a business, reported on Form T2125. The more services you provide, the more likely it is a business.
Either way, you deduct only the share of costs that relates to the rental: the rented part of the home, and the nights it was rented rather than used yourself. The rental-property guide covers the personal portion.
Unlicensed rentals lose their deductions
For income tax, a short-term rental is a residential property rented or offered for rent for less than 90 consecutive days. It is non-compliant when the province or municipality does not permit it at that location, or requires registration, a licence or a permit and the rental does not meet every one of those requirements. For the days it is non-compliant, its expenses are not deductible: the non-deductible part is the year’s deductible expenses multiplied by the non-compliant days and divided by the days it was a short-term rental.
In BC, short-term rentals offered for fewer than 90 consecutive days must be registered with the provincial registry, each unit with its own registration number, renewed every year, on top of any local business licence. In some areas a principal residence requirement also limits where short-term rentals are allowed.
PST and MRDT
Short-term accommodation in BC carries 8% PST, plus the MRDT of up to 3% in participating areas. In the City of Vancouver a further 2.5% Major Events MRDT applies from 1 February 2023 to 31 January 2030. Stays billed for 27 continuous days or more are exempt from PST and MRDT, and some other accommodation is exempt too, so check the province’s accommodation page for your listing.
An online marketplace facilitator that facilitates accommodation in BC must register to collect and remit PST and MRDT on the bookings made through it. A host who lists only through such a platform generally does not have to register. Bookings you take directly, by e-transfer or through your own site, are yours to charge for.
GST
Short-term accommodation, for GST, is lodging occupied continuously for less than one month at more than CAD 20 a night. If you are not registered for GST, a platform operator that facilitates your bookings is required to charge and collect the GST on them. If you are registered, you continue to be required to charge and collect it yourself, even on platform bookings.
For the bookings you make yourself, registration follows the ordinary CAD 30,000 test, over four consecutive calendar quarters or a single quarter. Whether bookings a platform collects GST on also count toward your threshold is worth checking before you register, because once you register, every booking is yours to charge. Selling a home that has been used for short-term rentals can raise its own GST and income tax questions, so ask before you sell.
What the books need
Questions people ask
Does Airbnb collect PST and MRDT in BC?
A platform that is an online marketplace facilitator must register to collect and remit PST and MRDT on accommodation booked through it, so a host listing only there generally does not register. Direct bookings are yours to charge.
Do Airbnb hosts have to charge GST?
If you are not registered, the platform collects the GST on stays it facilitates. If you are registered, you charge it yourself, including on platform bookings, so check how your bookings count toward the CAD 30,000 threshold before you register.
Is Airbnb income rental income or business income?
Usually rental income, on Form T776, when you provide only basic services. Extra services such as cleaning during the stay or meals can make it business income, on Form T2125.
Can I deduct expenses if my short-term rental is not licensed?
Not for the days it is non-compliant. If the province or the city prohibits the rental or requires a registration, licence or permit you do not have, those days’ share of the expenses is not deductible.
Do monthly rentals pay PST in BC?
Stays billed for 27 continuous days or more are exempt from PST and MRDT. For GST, accommodation occupied for a month or more is not short-term accommodation.
Rental property records and Form T776 →
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