Despite illegal status, Airbnb taxes headed for Oak Bay

Airbnb to pay PST and municipal tax after negotiation with the province

Oak Bay expects to receive some of the funds now that Airbnb will pay tax, despite the fact the short term rentals are illegal.

Finance Minister Carole James made the tax announcement at the legislature Wednesday, saying the government had been looking at new tax models to build tax fairness.

Airbnb will begin collecting the 8 per cent PST and the up-to-3 per cent municipal and regional district tax (MRDT) in short-term accommodations provided in B.C.. Oak Bay has a municipal 2 per cent hotel room tax. The province estimates Airbnb will remit about $16 million through the PST and an additional $5 million through the MRDT.

“As a government our role is to make sure that everyone is playing by the same rules,” James said. “In order to do that we need to look at a new way of doing business and new tax models.”

The money collected is to help fund affordable housing in the province as well as provide tax fairness for the hospitality industry, James said.

Airbnb is an American company that runs an online marketplace and hospitality service for people to lease or rent short-term lodging including cottages, apartments, rooms and more, with many Oak Bay listings featured on its website. Some municipalities such as the City of Victoria have made moves to regulate short term rentals. In Oak Bay, they’re illegal based on zoning and home business bylaws.

“Airbnb are not permitted to operate in Oak Bay. They are illegal,” says Oak Bay Mayor Nils Jensen. “These are often in what we now call established neighbourhoods in homes that are designated as single family dwellings.”

That said, last September, Oak Bay met with Airbnb personnel during the Union of BC Municipalities conference and learned some do exist in the community. However, based on the numbers told to Oak Bay last fall they don’t expect a windfall.

“We have a hotel tax of 2 per cent that’s collected by the hotel and the guest house, they in turn remit it to the province, who in turn pass it to us,” Jensen said. Those fund Oak Bay Tourism initiatives. “There may be extra monies coming to us, but it has to be said again that these are illegal and should not be operating.”

If Airbnb contributed to a similar tax in 2017, the government would have collected about $18 million.

“This is a defining moment for Airbnb in British Columbia,” said Alex Dagg, public policy manager for Airbnb in Canada. “These changes are a welcome opportunity to continue helping the province and its residents benefit from the positive economic impacts of home sharing.”

“While this announcement is a good first step from a tax fairness perspective, it will not change behaviour or free up long-term rental stock that has been taken out of the market due to short-term rental services,” said Andrew Weaver, leader of the BC Green Party, in response to Wednesday’s announcement. “The province needs to proactively encourage and support local governments to take action to restrict and regulate short-term rentals, as the City of Vancouver and the City of Victoria have done.”

In the extremely tight rental markets, with near zero per cent vacancy rates, short-term rentals like Airbnb take from the rental supply, Weaver said. “We are in a crisis – we need to ensure that houses are used for homes for British Columbians first and foremost.”


 

cvanreeuwyk@oakbaynews.com

Like us on Facebook and follow us on Twitter.

Just Posted

WATCH: Final thoughts before the 75th Swiftsure Yacht Race

Nautical stories and racing strategies of some of the 200 crews heading out to sea Saturday

Saanich Inlet bridge billion-dollar price tag too expensive says ministry

Malahat alternatives not practical from engineering, budget standpoint

Sooke candidate seeks two positions in civic election

Herb Haldane runs for Sooke councillor and CRD director

Teen Victoria brothers receive award for saving family from house fire

Sam and Finn Parker kept cool when their home started to burn and got three people out

Black Press Media to launch Pipeline Full of Controversy series

Series covers Trans Mountain’s history, science, Indigenous reaction, politics and economics

B.C. RCMP swoop in to save injured eagle

An eagle with a broken wing now in a recovery facility after RCMP rescue near Bella Coola

Catalyst Paper to sell U.S. mills to Chinese company

Sale will allow company to focus on B.C. interests, says president Ned Dwyer

Bug spray 101: Health Canada wants you to stay bite free

Health Canada is reminding Canadians to use bug spray and other insect repellents safely

Unions reject CP Rail contract offers

Both meeting Friday to determine next steps; 72 hours notice required before strike action.

B.C. jewellers warn public about fake gold scam

‘They are playing on people’s sympathy and their greed’

Former B.C. premier says pot industry about to enter Wild West

Mike Harcourt says Canada is about to enter a new gold rush with many dreaming of striking it rich

Hunt continues for two suspects in Ontario restaurant explosion

The explosion left 15 people injured, but all victims have now been released from hospital

B.C. teacher charged with sexual offences involving two teens

Henry Kang, 50, of Abbotsford charged with two counts each sex assault and sexual exploitation

Most Read