Cell 250-686-2839 | brian@briancorfield.com

Royal LePage Coast Capital Realty
110-4460 Chatterton Way, Victoria, BC V8X 5J2

Thinking about offering an Airbnb?…you might want to read this first.

There was an article in yesterday’s Times Colonist regarding the proposed regulation of Vacation Rentals in Victoria.

 

Vacation rental sites like Airbnb make it easy for folks to earn a little income with their property. But…before you welcome your first guest to your home, there are a few things you may wish to know first before operating an Airbnb.

 

Airbnb is a company and website for people to list, find, and rent lodging. It has over 1,500,000 listings in 34,000 cities and 190 countries. The original name Airbedandbreakfast.com was shortened to Airbnb.com, and the site's content had expanded from air beds and shared spaces to a variety of properties including entire homes and apartments, private rooms, castles, boats, manors, tree houses, tipis, igloos, private islands and other properties.

 

While the status of your property changes once you begin renting a portion of it, there are some important distinctions you should be aware of. For example, a hosting property may still be considered a principle residence if the rental area is reasonably small, in terms of the total area of the property. As I understand it, two out of five rooms is an acceptable proportion of your total property. That 2/5ths represents 40% of your total expenses, which is what you should claim. More than that and your principle residence status changes. It’s important to note that I’m not an accountant…So please contact your Accounting Professional to learn more and verify the previous information.

 

It’s very important to ensure your property is zoned correctly for the use you are intending. In addition, if you own within a Strata Complex you will want to check your Bylaws and/or check with Council to ensure there are no rules that prohibit usage.

 

How about Taxes?

 

Contrary to popular belief, Airbnb hosting is not “free money”. In the eyes of the taxman, it’s rental income. That status, however, depends on a number of factors. Canadians must report any income earned anywhere in any way when filing taxes, including any money made through these part-time or full-time ventures. Even bartering for services or crowdfunding aren't exempt from taxes.

 

Another important consideration for hosts is determining whether monies earned from the rental property will be viewed as rental or business income. The CRA will take into account services rendered. How many of these and the nature of the services offered can change the status of your hosting income in the eyes of the Agency. Rental income includes standard services common to all rentals, like electricity, heat, in suite laundry facilities and parking. But if you provide services like security, meals, or cleaning, you will most probably be considered a business under the tax code. When it comes to HST/GST, if your income from hosting exceeds $30,000 you have to register and pay the applicable tax. When it comes to PST, things vary from province to province.

 

You can review a bulletin regarding PST in British Columbia here.

 

 

 

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