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A must read for anyone in the vacation rental industry or just thinking about it!

Added: Jan 21, 2018
Category: For Vacation Home Owners

Publication by revenue Canada about income tax and HST on Accommodation Sharing (Short-Term Renal)

Doing short-term rental bookkeeping isn't for the faint hearted. Especially in Ontario because of the high real estate prices and being an HST province.

The above link was published in March of 2017 and is a bit easier read than the 2007 information Bulletin GE-025-e - The Purchase, Use, Sale of Vacation Properties by Individuals. While this is a must read for any vacation home owner in Ontario, its a slog.

So starting your education into the world of tax is best with using the link to Accommodation Sharing and then read GE-025-e.

Be sure to discuss your individual situation with a tax specialist.

Tax reporting will get further complex in Ontario with the recent approval of the ability for municipalities to implement an accommodation tax. This is new legislation as of December 2017, so there isn't much info out there.

Our local community in Niagara-on-the-Lake is considering implementation in 2018. If, how and when is under review by the town council.

Some people think that if they only list on AirBnB that insurance, regulation and tax don't apply. This could not be further from the truth. The AirBnB terms and conditions say that any host must comply with local, provincial, and federal tax and any bylaws or rules governing short-term rentals.

All levels of government are researching ways to regulate and monitor short-term rentals. In my recent discussions with my accountant, it was mentioned that this year there are far more audits of short-term rentals than ever before as 2017 was one of the first years AirBnB reported to the Canada Revenue Agency about the information of its clients. What information was provided, I don't know, but the CRA is really cracking down on short-term rental income.

AirBnB, HomeAway, VRBO, TripAdvisor, FlipKey, Booking.com, Canada Stays or any of the other online marketing websites are really just that, an on line travel agent (OTA). There is nothing special about them.

Here is an article declaring February 7th, 2018 as book direct day, but it's a great read to clarify what is really going on with these online travel agent websites.

If you are a non-resident of Canada, it can be even trickier. Get good solid advice from knowledgeable professionals. Keep excellent and easy to understand accounting records. Be transparent. The hassle, fines and the potential tax liabilities are huge. You don't want to be held up as the example for all and be hit with the worst.

In our community, failure to get a short term rental license is a fine of $500 per night rented. If the Town of Niagara-on-the-Lake implements an accommodation tax, these fines for not complying only go up!

A good option to help you is to join a local or larger industry association like the Niagara Vacation Rental Association, about 50 or so vacation rental owners joined together to share information and we are based in Niagara-on-the-Lake.

Joining an industry association or networking group helps supporting each other as we all know the challenges of running a small business.



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