GST/HST on Airbnb and Short-Term Rentals in Canada

Is GST/HST charged on a short-term rental in Canada?

Short stays of less than one month are taxable, but a small supplier need not register or charge GST/HST until taxable sales pass $30,000. Renting a home, condo, cottage or room to a guest for a continuous stay of less than one month is taxable when it costs more than $20 a day. A host who is registered charges the tax; the booking platform may collect it for a host who is not (CRA: platform-based short-term accommodation; CRA: Memorandum 19-2-2).

The test is the length of the guest's continuous right to occupy, not how often rent is paid. A guest who rents for a month or more and pays weekly is still a long-term tenant. The Act counts a month as a calendar month (Interpretation Act, section 35), and the CRA's memo gives no day count. Use the agreed start and end of the guest's right to occupy; if a booking sits close to one month, settle the dates and the tax treatment before you invoice (CRA: Memorandum 19-2-2; ETA Schedule V, Part I, section 6).

The case is not simple if:

• Your taxable stays are near the registration limit, or you are past it and registered late or never registered.
• You mix short stays with long-term tenants, or rent a room in your own home.
• Almost every stay is under 60 days, so the unit may be treated like a hotel.
• You have claimed credits on the property, plan to sell it, or bought it new before anyone lived in it.
• The unit is owned through a corporation or partnership, or by several owners.

Gather: booking and payout reports from every platform and every direct booking; the nights and nightly price of each stay; any GST/HST shown on payouts; your GST/HST number and effective date if you have one; the purchase and renovation invoices; and whether credits were ever claimed on them.

Do I have to register for GST/HST as a short-term rental host?

A short-term rental host does not have to register for GST/HST until taxable sales, together with those of associates, pass the small supplier limit of $30,000. A host who stays at or under it in every calendar quarter, and across four calendar quarters in a row, is a small supplier and does not have to register or charge tax (CRA: when to register; ETA section 240).

A small supplier may register voluntarily, which brings a duty to charge tax and a right to claim credits. It can also make a later sale of the property taxable; see the sale section below. For voluntary registration, see when to register for GST/HST.

What counts toward the limit, and when does registration start?

Count the amount you charge for taxable stays, before any platform host fee or other expense is deducted, together with your other taxable sales and those of your associates. Stays on which a platform collected the tax still count (ETA section 148; ETA section 211.13).

The test uses calendar quarters starting in January, April, July and October, whatever your fiscal year. A booking counts when payment becomes due or is paid, which can be before the stay (CRA: Memorandum 2-2). A booking or administration fee the platform charges the guest for its own service is the platform's supply, not your rental sales (ETA section 211.1).

Apply within 29 days of the effective date (CRA: when to register).

Does a booking platform collect the GST/HST for me?

A booking platform collects the GST/HST for you only if you are not registered. A platform that meets the Act's definition of an accommodation platform operator must collect the tax on taxable stays by hosts who are not registered. Once you are registered, you charge the tax yourself on every taxable stay, including platform bookings (CRA: platform-based short-term accommodation; ETA section 211.13).

An operator under the Act is the party that controls or sets the essential elements of the booking; if no one does, it is the party that collects the guest's payment and passes it to the host. A site that only lists the property, or only processes the payment, is not an operator (ETA section 211.1). Whether a platform collects for a guest who is a GST/HST registrant depends on its regime: on the CRA's simplified regime it collects only for guests who are not registered, and on the normal regime for any guest (CRA: platform-based short-term accommodation).

Platform collection does not take the bookings out of your limit count. Once you register, check the platform's tax settings so guests are not taxed twice. If a host gives a platform a false statement that affects whether it must collect, the host and the platform can be jointly liable for the tax that results (ETA section 211.13).

Keep a record for each booking, so the limit count, the platform's statements and your return agree:

If payouts do not match these records, rebuild the quarters before you register or file.

What GST/HST rate applies to a short-term rental in my province?

The rate follows the province where the property is, not where the host or guest lives (CRA: platform-based short-term accommodation).

In Quebec, Revenu Québec generally administers the GST/HST; see the last section. Provincial sales taxes, Quebec's QST and local accommodation levies are separate and not in this table. Check your province in provincial sales tax.

Can I claim input tax credits on furnishing, cleaning and repairs?

Once registered, a host can claim input tax credits for the part of each cost used to make taxable stays. A registrant recovers GST/HST on costs of its commercial activities through input tax credits, but not on costs for personal use, or on costs of making exempt supplies such as long-term rent (CRA: input tax credits).

Keep invoices that show the supplier's GST/HST number and the tax. Credits usually must be claimed within four years (CRA: input tax credits).

How do I report and pay the GST/HST I collected?

A registered host deducts input tax credits from the GST/HST charged on stays, on the GST/HST return; the result is net tax, which you pay to the CRA, or claim as a refund if credits are larger. You hold the tax you charge in trust until you send it (CRA: RC4022). Tax a platform collected before you registered was not tax you charged. For the return itself, see filing GST/HST and input tax credits.

What if I mix short stays, long-term tenants or a room in my own home?

A registered host charges tax only on the short stays. Long-term rent of one month or more is exempt, does not count toward the limit, and earns no credits on costs used only for it.

• Room in your own home: a short stay in a room is taxed like any other short stay. Claim credits only for the rented share of each cost, and keep the floor areas and dates behind your split.
• Hotel-type use: a hotel, motel, inn or similar premises is not a residential complex when 90% or more of its stays are, or are expected to be, under 60 days. Its rent is then usually taxable whatever the length of stay, unless it is $20 a day or less (CRA: Memorandum 19-2-2). The Act does not apply this exclusion to a unit an individual owns and uses mainly as their own or a relative's home; a corporation or partnership owner has no such exception (ETA section 123(1)).

The CRA's memo names hotels and motels, and its vacation-property sheet applies the same 90% reading to the sale of a unit that is not mainly the owner's home, as in a rental pool (CRA: GI-025). Neither says whether one condo or house rented almost only on short stays is hotel-type for its rent. That is unsettled, so do not assume stays of one to two months are exempt.

What happens to GST/HST when I sell a property I used as a short-term rental?

The sale of a used home by an owner who is not a builder is usually exempt, but it is taxable when credits were claimed on it or when the CRA treats it as short-term rental property. The rows below show which applies; check them before you list.

Rows 3 to 5 are the CRA's reading. The Act first asks whether the property is still a residential complex at the sale: a non-builder's sale of one is exempt unless credits were claimed, and the Act's business-use test for an individual's sale does not apply to a residential complex (ETA Schedule V, Part I, sections 2 and 9). So mainly short-term use alone may not make the sale taxable unless the unit is hotel-type (see the mixed-use section) or credits were claimed. Confirm the sale's treatment before you list.

The last three rows come from a CRA information sheet on vacation properties. It is written for individuals and does not deal with properties acquired by anyone else, such as a corporation. It gives no figure for "primarily" in the third row, but it reads the word as more than 50% in its residence and personal-use tests, and RC4022 does the same, so this page applies that reading (CRA: RC4022). Its example looks at use in the year before the sale, while the Act tests use immediately before the transfer. If you bought the unit new, before anyone lived in it, mainly to resell it, or mainly to lease it to a business rather than to guests for their own lodging, you may count as a builder, and the exempt-sale rule in the first row does not apply; an individual who bought outside a business or an adventure in the nature of trade is not a builder (ETA section 123(1)). Moving in, or stopping the rentals, can also trigger tax. A registered individual who starts using the property mainly for personal use is treated as selling it (ETA section 207). An individual who takes hotel-type property for personal use owes tax on its fair market value, even with no credits claimed (ETA section 190(2)). Turning hotel-type property into ordinary residential rental makes the owner its builder, and the first residential lease can trigger tax on its fair market value (ETA section 190(1)).

A taxable sale may also let you recover purchase and improvement tax that was never recovered: an additional input tax credit if you are registered (ETA section 193), or a rebate if you are not, which you must apply for within two years after the price became due or was paid (ETA section 257; CRA: reason code 7). For who collects the tax on a taxable sale, see GST/HST on residential property. Income tax on the gain is separate: see selling a rental property.

Gather: the purchase statement of adjustments, renovation invoices and the credits claimed on each return, your registration date, and the nights rented against nights of personal use for each year.

What if I passed the limit and never registered?

The tax is still owed from the effective date, even if no guest was charged. The CRA says that if you were required to charge GST/HST and did not, you are still liable for it, and it goes on the return for the period when it should have been charged (CRA: RC4022; ETA section 221).

Rebuild taxable stays by calendar quarter from payout reports and direct bookings, find the first booking that took you over the limit, and keep direct and platform bookings apart. The CRA's published guidance does not say how tax a platform already collected is reconciled once a late registration takes effect.

The steps to register, ask for an earlier effective date and file are in when to register for GST/HST. For interest and penalties, see penalties, interest and relief and late GST/HST filing penalty. If you are thinking of coming forward before any CRA contact, see reviews, audits and voluntary disclosure.

Example

All amounts are in Canadian dollars and illustrate the rules above.

Under the limit in Ontario

A host without a GST/HST number books taxable stays of 3,000, 6,000, 10,000 and 3,000 in four consecutive calendar quarters, 22,000 in all. No quarter, and no four quarters together, pass the limit, so she does not register and charges no tax on her direct bookings. For stays booked through a platform that meets the operator rules, the platform adds HST at 13% and remits it. Her 22,000 still counts toward the limit.

If the next quarter adds 12,000, the last four quarters are 6,000 + 10,000 + 3,000 + 12,000 = 31,000. No single quarter passed the limit, but the four-quarter total did, so she stops being a small supplier at the end of the month after that quarter and registers no later than her first supply after that.

Passing the limit in one quarter in Alberta

A host with two condos had no taxable bookings before July and has taken 27,000 in the July to September quarter by mid-August. A direct booking of 5,000, paid on August 20, takes the July to September quarter to 32,000. That booking is the supply that took her over, so her registration is effective no later than August 20 and she charges 5% GST on it: 250. She applies within 29 days of the effective date and from then charges GST on every taxable stay herself, platform bookings included.

Selling an Ontario condo after claiming credits

An owner who is registered and rents a condo on short stays claimed credits on an 80,000 renovation. She sells it for 700,000 before tax. The sale is taxable under the credits rule, because credits were claimed on an improvement; HST at 13% on the price is 91,000. She may be able to claim an additional credit for purchase tax never recovered. With no credits claimed, the sale would be exempt only if none of the other situations in the sale table applied, such as use mainly in short-term rentals.

Different for you?

• You passed or are close to the limit, registered late, or never registered: the quarter-by-quarter sales, the effective date, the back filings and the platform-collected tax have to agree. Gather the payout reports first; catch-up books are covered on the bookkeeping page. See also when to register for GST/HST, unfiled GST/HST returns and charging GST/HST before registering.
• You are selling a unit you claimed credits on, or rented mainly on short stays: whether the sale is taxable turns on the credit history, whether the unit is a residential complex, and its use at the sale, so gather the records above before you list. See GST/HST on residential property, selling a rental property and the bookkeeping page for the records behind it.
• You own through a corporation or partnership, or share the unit with others, for example two family members on one title: the limit is tested on the person who makes the supplies, with associates, so who that is changes the answer. A partnership and each general partner are jointly liable for its GST/HST (ETA section 272.1), and a corporation's directors can be assessed for unremitted net tax up to two years after they leave office (ETA section 323). Gather the ownership papers; the bookkeeping page shows the records work.
• You live outside Canada, or a manager takes the guests' payments: who makes the sale, and who registers, depends on the arrangement. Gather the management agreement and payout reports.
• You worry the platform reports your income to the CRA: see CRA digital platform reporting.
• You paid GST/HST on setup costs before registering: see claiming GST/HST paid before registering.
• Your property or business is in Quebec, British Columbia, Saskatchewan or Manitoba: these provinces have separate sales taxes, covered in provincial sales tax. In Quebec, Revenu Québec generally administers the GST/HST, and a business physically located there registers and files with it, not the CRA (CRA: RC4022).
• You need to know where the rent goes on your income tax return: see T776 or T2125 for short-term rentals and rental income.
• You are stopping the rentals: see closing a GST/HST account.