Short-term Rental Accommodations
Over the past few years, short-term rental accommodations have become more and more popular. Companies such as Airbnb and others have provided platforms for property owners and travelers alike to post and search for suitable accommodations.
Are you aware of your tax filing requirements and liabilities?
The Government of Canada has been discussing internally and with stakeholders, possible changes to the GST rules. These proposed changes may make it easier for the Government of Canada to collect GST on these short-term accommodations. Indications are that the Government of Canada will have either the platform operators, such as Airbnb, or the property owners responsible for collecting the GST. Stay up to date on this potential new GST system by visiting our website and keeping in touch with your T&A professional.
Notwithstanding the proposed GST changes, property owners who provide short-term rental accommodations may still currently be required to register, collect, and remit GST to the CRA on the income earned from these rentals.
How about the Manitoba PST?
If you have a property with four or more bedrooms available for rent and your annual taxable sales are $10,000 or more, you may need to register, collect, and remit PST to Manitoba Finance on the income earned from these short-term rentals.
Wait, there is potentially one more tax you may be required to collect and remit. The City of Winnipeg accommodation tax.
The City of Winnipeg has a 5% tax on accommodations that are provided for less than thirty nights and the charge is greater than $30 per night or greater than $210 per week.
Like the Manitoba PST rules, this tax applies whenever four or more bedrooms are available for rent separately at the same time in the same location. This City of Winnipeg tax is to be remitted monthly by the 20th of each month.
All three taxes have penalties and interest provisions for those who are not filing or remitting the tax correctly. There are rules common to these three taxes and rules specific to each tax. If you are operating a short-term rental property, contact your T&A professional for guidance on this matter to ensure you are meeting all your tax filing requirements.