Changes come into effect on October 1 for taxes applied to accommodations sold in B.C., and this includes short term rentals in Golden.
There are important changes about how provincial sales tax (PST) and municipal and regional district tax (MRDT) are applied and collected across the province. Beginning in October, anyone who sells accommodations in B.C. must be registered to collect PST and MRDT unless they sell only exempt accommodation, and only list their accommodation on an online platform that is registered to collect the two taxes.
The exemption to the tax rule is also changing.
Now, if someone sells less than $2,500 per year, they do not have to pay the PST and MRDT if the accommodation is not listed on an online accommodation platform.
As of October 1, the exemption for acommodators who offered fewer than four units will be eliminated.
In addition, a low cost accommodation exemption will apply, meaning accommodations that cost less than $30 per day or $210 per week will not apply to accommodation listed on an online accommodation platform.
“If they are selling accommodation as a short term rental, and it is through anything other than through Airbnb or an online platform that is confirming that they are collecting the tax on behalf of the owner or operator, then those people need to be registered and they need to collect those taxes,” explained Tourism Golden executive director Joanne Sweeting.
There are many different types of short term rentals, from hotels and bed and breakfasts to people who own second homes and suites and people with private rooms in their homes for rent.
“There’s so many different types of people that have entered the arena. We know that there has been a switch. We have seen the movement because it has caused issues,” Sweeting said. “It’s a growing trend. There is a demand for short term rentals. Travellers like being local, they like being in neighbourhoods instead of hotels.”
The new MRDT adds on an additional two per cent onto the eight per cent PST on accommodations in Golden.
Across the province, municipalities participating in the MRDT are allowed to charge up to three per cent.
Sweeting is unsure if the new exemption rules and tax increase will deter people from choosing to provide short term rentals instead of long term rentals, but she says it is creating a more level playing field.
“Its about recognizing it as a strong trend. It needs supply, but the supply needs to be managed,” she said.
Short term rentals are most likely here to stay, she said, and will likely never be fully eliminated.
Accommodators must register for the PST if they provide taxable accommodation in B.C.
They do not need to register separately for the MRDT.
The PST number will also be the MRDT number in areas that apply the MRDT.
To register, accommodators can go online to eTaxBC, or in person at a local Service BC Centre, or by fax or mail by completing a paper application for registration for provincial sales tax (FIN 418).
“Check with your online platform, are they collecting and remissing the tax, or is it your repsonsibility? You need to be asking the question if you don’t already know the answer,” Sweeting said.
As of September this year, there are 131 short term rentals in the Town of Golden, and 377 in Area A.
“I can see the growth is massive,” Sweeting said, adding that these numbers also include any traditional accommodators that are listing their rentals online. “There has been a massive explosion of homeowners just leveraging an asset.”
For more information about the changes or to find out if the taxes apply to you, visit www.gov.bc.ca/pst, call 1-877-388-4440, or e-mail ctbtaxquestions@gov.bc.ca.
