Vancouver Sun

Pop­u­lar rental app com­pany to col­lect B.C. tax

- mrobin­son@post­media.com MATT ROBIN­SON Taxes · Society · Canada News · Business · British Columbia · Airbnb · Carole James · France · Germany · India · Italy · Mexico · Netherlands · Portugal · Switzerland · United States of America · Québec · Green Party of Canada · Simon Fraser University · Vancouver · Vancouver · University of British Columbia Faculty of Law · Andrew J. Weaver

Airbnb will col­lect pro­vin­cial sales taxes on all short-term rentals in B.C. in a new agree­ment that amounts to a Cana­dian first.

Fi­nance Min­is­ter Ca­role James said Wed­nes­day her gov­ern­ment and Airbnb had reached a deal for the com­pany to re­mit, on be­half of its 18,500 B.C. hosts, the eight per cent PST and the up-to-three per cent mu­nic­i­pal and re­gional district ho­tel tax. The agree­ment would mean an es­ti­mated $16 mil­lion a year for the prov­ince and $5 mil­lion for lo­cal gov­ern­ments, ac­cord­ing to the prov­ince.

“Gov­ern­ment needs to keep up with the grow­ing and chang­ing econ­omy. We need to en­sure the busi­nesses and peo­ple tak­ing part in the shar­ing econ­omy are pay­ing their fair share of taxes,” James said.

Rev­enues col­lected by B.C. would be spent on af­ford­able hous­ing mea­sures that would be found in the Feb. 20 pro­vin­cial bud­get, James said, later not­ing “ev­ery penny makes a dif­fer­ence.”

Erez Aloni, an as­sis­tant pro­fes­sor at the Univer­sity of B.C.’s Peter A. Al­lard School of Law, said it was likely other parts of Canada would pur­sue sim­i­lar agree­ments.

“I think it has be­come the norm,” he said, adding that sev­eral other ju­ris­dic­tions had ex­per­i­mented with the idea be­fore B.C. “Now that we know not only that it works, but that Airbnb is col­lect­ing it for the prov­ince, there is ab­so­lutely no rea­son for other prov­inces not to fol­low.”

Airbnb col­lects and re­mits taxes in France, Ger­many, In­dia, Italy, Mex­ico, the Nether­lands, Por­tu­gal, Switzer­land and the U.S., ac­cord­ing to the com­pany. It also col­lects a lodg­ing tax in Que­bec. B.C.’s agree­ment with Airbnb would re­quire leg­isla­tive and reg­u­la­tory changes, ac­cord­ing to the prov­ince.

An­drew Weaver, the leader of the B.C. Green party, called the an­nounce­ment “a good first step from a tax fair­ness per­spec­tive,” but said it would not help free up long-term rental stock pulled from the mar­ket by short-term rentals.

“We are in a cri­sis. We need to en­sure that houses are used for homes for Bri­tish Columbians first and fore­most. The prov­ince should work with lo­cal gov­ern­ments to re­turn units to the long-term rental sup­ply,” he said in a writ­ten state­ment.

Andy Yan, the di­rec­tor of the city pro­gram at Si­mon Fraser Univer­sity, crit­i­cized the agree­ment.

“In the hous­ing realm of sub-one per cent va­cancy rates, this tax is kind of like us­ing ci­garette taxes to pay for lung can­cer treat­ments,” Yan said, adding that short-term rentals of­ten take af­ford­able hous­ing from the mar­ket al­to­gether.

Lo­cal gov­ern­ments in B.C. are grap­pling with short-term rentals.

The City of Van­cou­ver re­cently moved to reg­u­late them and has new rules that come into ef­fect in April. Res­i­dents will be able to rent out their prin­ci­pal res­i­dences for short terms us­ing ser­vices like Airbnb so long as they pur­chase a $49 an­nual li­cence and pay a $54 one-time ac­ti­va­tion fee.

Renters would need ap­proval of their land­lords and condo own­ers would need sup­port of their strata coun­cil.

Sue Willis, the pres­i­dent of the B.C. Bed & Break­fast Innkeep­ers Guild, said that Airbnb is just one of about two dozen on­line short-term rental list­ing ser­vices. She said her in­dus­try has sought a “level play­ing field” through reg­u­la­tions where all hosts are li­censed for the sake of guest com­fort and safety.

She ex­pressed con­cern that the B.C.-Airbnb agree­ment could lead to a change to a key tax ex­emp­tion re­lied on by bed and break­fasts. Un­der the PST Ex­emp­tion and Re­fund Reg­u­la­tion, ac­com­mo­da­tion pro­vided by some­one who of­fers fewer than four units is not taxed provin­cially, she said.

The Fi­nance Min­istry did not im­me­di­ately re­spond to a ques­tion about whether the an­nounce­ment would change the ex­emp­tion.

The prov­ince said it hoped to work with other short-term rental com­pa­nies to have them col­lect taxes as well.

 ??  ?? Crit­ics say short-term rentals, such as these Airbnb of­fer­ings in Van­cou­ver, of­ten take af­ford­able hous­ing out of the mar­ket al­to­gether.
Crit­ics say short-term rentals, such as these Airbnb of­fer­ings in Van­cou­ver, of­ten take af­ford­able hous­ing out of the mar­ket al­to­gether.

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