Airbnb To Collect Taxes in BC

The BC government and Airbnb have reached a deal that will see the online company collect provincial sales taxes on all its short-term rentals.

Finance Minster Minister Carole James says Airbnb will collect the 8 percent PST, and the up to 3 percent hotel tax (municipal and regional district tax) in BC.

“And we will utilize the revenues raised from Airbnb and from other short term rentals to fund affordable housing measures for people in our province,” James told a news conference.

There’s 18,500 Airbnb providers operating in BC, with the measures estimated to raise 16 million dollars through the PST and up to 5 million from the hotel tax.

Once the regulatory changes are made, Airbnb will begin collecting the taxes through its platform.

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“To streamline the process of collecting taxes, Airbnb will remit on behalf of its hosts in British Columbia, ensuring that no additional administrative burden is placed on them,” says James.

“This is a defining moment for Airbnb in British Columbia,” says Alex Dagg, public policy manager for Airbnb in Canada. “These changes are a welcome opportunity to continue helping the province and its residents benefit from the positive economic impacts of home sharing.”

This is the first arrangement of its kind in BC.

“Airbnb is a leader in its sector for coming to the table with the Province, and agreeing to voluntarily register its platform to collect the PST and MRDT,” says a news release.

In the near future, the BC government will be looking to move forward with similar arrangements with other accommodation platforms.

Airbnb collects and remits occupancy taxes on behalf of its hosts in many jurisdictions around the globe, including in France and India, and the states of Michigan, Nevada and California.

Green Party leader Andrew Weaver says the announcement is a good first step from a tax fairness perspective, but it won’t change behaviour or free up long-term rental stock that has been taken out of the market due to short-term rental services.

“The province needs to proactively encourage and support local governments to take action to restrict and regulate short-term rentals, as the City of Vancouver and the City of Victoria have done,”says Weaver.

“In our extremely tight rental markets, with near 0% vacancy rates, short-term rentals like Airbnb are taking many units out of long-term rental supply. We are in a crisis – we need to ensure that houses are used for homes for British Columbians first and foremost. The Province should work with local governments to return units to the long-term rental supply.”