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The Airbnb tax process is about to become much simpler for hosts in Canada! Many Canadians use the vacation rental platform to offer guests short-term accommodations in a property they own. Since every property on Airbnb is owned by an individual, this means hosts include their income from this platform when tax season rolls around. Now, hosts are about to feel more at ease when the time comes to file their taxes. Here’s how Airbnb is changing for Canadian properties.
Tax season just got simpler for Canadian hosts
Starting July 1, 2022, Airbnb will begin collecting the following taxes for hosts with properties in Canada: Goods and Services Tax (GST), Harmonized Sales Tax (HST), and Quebec Sales Tax (QST) if applicable. The taxes are charged to guests upon booking, and Airbnb will file one tax return per Canadian jurisdiction each year, combining all Airbnb revenue in that area into one filing. This means individual hosts’ personal information is kept private when Airbnb submits these returns on their behalf. These changes will make tax season easier and smoother for Canadian hosts, taking away the need to manually collect these specific taxes. The Airbnb tax process doesn’t change a host’s payout amount, or the amount that is due. It simply automates the process.
An important note
Please note that depending on the area of the property, local taxes may apply that hosts will need to collect. Airbnb will be collecting these federal taxes that apply in every province, but they will not necessarily collect additional local taxes automatically. It’s up to the hosts to understand their tax reporting obligations and to make them clear to guests who book. Hosts must ensure their address is up to date so they are collecting the proper taxes and charging them accordingly.
Interested in buying a rental property?
Buying a rental property may be something that appeals to you, perhaps as a way to earn extra income or to gain more equity in a busy market. A rental property can become a good source of passive income for Canadians, especially in Nova Scotia where we have such desirable areas many tourists are likely to want to visit. By owning a property such as an Airbnb-type unit, you can take advantage of today’s market and also enjoy the Airbnb tax process. Here are some things to remember about buying a rental property.
If you have questions about your mortgage, or are interested in your rental property options, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.