B.C. and Airbnb reach tax collection deal to help fund province’s housing plans

The British Columbia government says it will soon profit from the short-term rental market after reaching an agreement with Airbnb on the collection of taxes.

The money will be used to fund housing and tourism initiatives.

Finance Minister Carole James touted the deal with Airbnb as the first of its kind in Canada, saying it acknowledges short-term rentals are part of B.C.’s economy.

Airbnb, British Columbia
British Columbia Parliament Buidlings at dusk. Photo by Dllu via Wikimedia Commons.

“It recognizes the reality today, not only in B.C. but across the country, in fact across our world,” she said. “The sharing economy is here. We need to make sure as governments, that we look at our tax systems, that we look at our arrangements we have in place and we make sure we create that level playing field.”

James said the government will introduce legislation that allows Airbnb to collect 11 per cent in taxes from short-term rentals and send the proceeds to the government. The taxes include the eight per cent provincial sales tax and municipal or regional district taxes of up to three per cent on accommodation.

The estimated $16 million the province will get annually from the sales tax will be used to improve housing affordability, said James.

She said her upcoming budget will include government plans to address the financial squeeze some are feeling on housing. Although the money from Airbnb isn’t enough alone considering the province’s housing issues, “every penny counts,” said James.

Premier John Horgan has promised to make housing the primary focus of the budget, saying B.C. must dampen speculation in the real estate market and increase the number of affordable family homes. The New Democrats promised during last year’s election campaign to deliver 114,000 housing units over the next decade.

James said the portion of the revenue from municipal and regional taxes, estimated at about $5 million a year, will fund tourism programs.

Airbnb spokeswoman Alex Dagg said the agreement allows the province to participate in the economic benefits of home sharing.

“We’ve said for a long time that we want to work with governments,” she said.

Green party Leader Andrew Weaver said in a statement the deal is a good step toward tax fairness, but it will not improve the need for long-term rentals.

The province should “proactively encourage and support local governments to take action to restrict and regulate short-term rentals,” as Vancouver and Victoria have done, he said.

“In our extremely tight rental markets, with near zero per cent 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.”


Here are some facts of Airbnb’s operations in B.C. and elsewhere:

  •  There are 18,500 Airbnb providers operating in the province.
  • Airbnb also collects a 3.5 per cent tax on lodging on behalf of its hosts in Quebec.
  • Airbnb collects and remits taxes on behalf of the states of Michigan, Nevada and California, as well as in France and India.
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