A few months after Vancouver approved new regulations on short-term rentals, British Columbia’s government has announced a provincial tax on Airbnb.
Today BC Finance Minister Carol James told reporters the new eight percent sales tax on Airbnb rentals is about a “level playing field” and a “fair tax system.” Announced in partnership with Airbnb’s policy director Alex Dagg, the new tax is expected to collect an extra $16 million in revenue, which James says will be earmarked for affordable housing.
James said the Airbnb agreement is the first of its kind in BC, and “recognizes the reality today, not only in BC but across country.” The sharing economy is here to stay, said James, and the impact of “home sharing” on housing availability can’t be ignored any longer.
The agreement will also allow municipalities and regional districts to set their own regulations and take an additional tax of up to three percent. Money collected by local governments will be used to promote tourism, according to James.
Starting in April 2018, Vancouver will require everyone renting a home or room for under 30 days to pay an annual $49 licensing fee as well as a one-time $54 activation fee. The new rules were approved last November after the city found nearly 6,000 “illegal” short-term rentals listed across 10 sites including Airbnb.
“We've seen evidence from other cities that short-term rentals not only take away from the long-term supply, but put upward pressures on rents,” the city’s GM of development Kaye Krishna said at the time. “We feel the proposed regulations will protect long-term rental supply while enabling supplemental income for residents."
Before that, the tiny surf destination of Tofino was one of the first local BC governments to crack down on Airbnb rentals with business licensing and zoning requirements.
“It really is different in every community,” said James. “They really are best suited to determine what makes sense.”
Dagg stressed the tax agreement considered renters and homeowners who use Airbnb as a source of supplementary income. She said short-term rentals will continue to help BCers “stay in their homes during hard financial times.”
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