THE British Columbia government and Airbnb have reached an arrangement allowing the online company to collect provincial sales taxes on all short-term rentals conducted through its platform — a move that will help fund housing affordability measures for British Columbians — Finance Minister Carole James announced on Wednesday.
“British Columbians want access to the sharing economy – and they want it to be fair,” James said. “This initiative will provide additional revenues to address housing affordability, and it improves tax fairness for all British Columbians.”
Once legislative and regulatory changes are made, Airbnb will begin collecting the 8% provincial sales tax (PST) and the up-to-3% municipal and regional district tax (MRDT) on short-term accommodations provided in British Columbia through its platform.
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.
“This is a defining moment for Airbnb in British Columbia,” said 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 British Columbia. 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.
In the near future, the Province will be looking to move forward with similar arrangements with other accommodation platforms.
- There are 18,500 Airbnb providers operating in British Columbia.
- The Province estimates Airbnb will remit approximately $16 million through the PST and an additional $5 million through the MRDT.
- MRDT is up to 3% and is applied to rentals of short-term accommodations, paid by consumers.
- Elsewhere in Canada, Airbnb also collects the 3.5% tax on lodging, on behalf of its hosts in the Province of Québec.
- Airbnb collects and remits occupancy taxes on behalf of its hosts in many jurisdictions around the globe, including:
- the countries of France and India
- the states of Michigan, Nevada and California