---------- Forwarded message ---------
From: Neighbours Speak Up <neighboursspeakup(a)gmail.com>
Date: Thu, Dec 3, 2020 at 12:27 PM
Subject: Canada to Tax Airbnb and other Digital Services
To:
Hi everyone,
As some of you may have seen, the Fall Financial Statement by the
Government of Canada includes provisions that will tax a number of foreign
digital services, such as Airbnb.
This is intended to level the playing field with other businesses in the
tourist accommodation area and, in my view, is a recognition that
regulation is needed in this sector of the economy.
I've copied the specific section of the Statement related to Short-term
Rentals and provided links to the full section on Taxation of Digital
Services and an article in The Toronto Star commenting on the potential
impact.
Bill Stewart
for Neighbours Speak Up
4.8.1.3 Fair Taxation of Short-Term Accommodation through Digital Platforms
Increasingly, individual property owners are renting out their residences,
or other residential property, through digital platforms for short-term
periods. Property owners may not be aware of the relevant GST/HST
requirements with respect to these rentals. Additionally, the platforms
that facilitate these rentals are not responsible for accounting for the
GST/HST on these rentals under current rules. These factors result in the
GST/HST not being applied consistently and putting more traditional
Canadian accommodation providers, such as hotels, at a comparative
disadvantage.
The growing popularity of the sector has also led to an increasing number
of homes and properties being re-purposed from long-term into short-term
rental accommodation. While data on short-term accommodation is limited, a
2019 study estimated that more than 30,000 housing units in Canada were
frequently being used for this purpose. For people living in Canada’s
largest cities, the limited supply of long-term housing has made it more
difficult to afford a home.
- To improve GST/HST compliance, and to ensure fairness across the
accommodation sector, the government proposes to apply the GST/HST to all
platform-based short-term rental accommodation supplied in Canada. Under
this proposal, the GST/HST will be required to be collected and remitted –
by either the property owner, or the digital accommodation platform – on
short-term accommodation that is supplied in Canada through a digital
accommodation platform.
These changes are proposed to be effective July 1, 2021, which will provide
time for the government to consult stakeholders on the proposed changes and
for stakeholders to comply with these proposals.
It is estimated that the proposed measure will increase federal revenues by
$360 million over 5 years, starting in 2021-22. As referenced in Chapter 3,
the government is also investing in affordable housing.
https://www.thestar.com/business/2020/11/30/ottawa-to-impose-fair-share-of-…
https://www.budget.gc.ca/fes-eea/2020/report-rapport/chap4-en.html#48-A-Fai…
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