British Columbia has received almost $34-million in taxes from Airbnb in the past year, more than double the revenue projected when the unique taxation program designed to fund affordable housing was launched in 2018.
In Canada, the online accommodation provider is only collecting tax revenue in B.C. and Quebec, where it has also negotiated an agreement that took effect in October, 2017.
The company says it took in a total of $42.9-million in B.C. provincial sales tax and the municipal and regional district tax (MRDT) between Oct. 1, 2018, and Sept. 30, 2019.
Of that, $33.7-million was for provincial sales tax and $9.2-million went to municipal and regional districts. The MRDT is applied to rentals of short-term accommodations.
The MRDT for Vancouver, which mandated in 2018 that short-term rental operators must have a business licence and can only rent out primary residences, was $3.5-million. For the rest of B.C., the revenue was $5.7-million.
Airbnb agreed in 2018 to help the City of Vancouver enforce new rules for short-term rentals, blocking hosts from renting unless they have a city business-licence number.
Airbnb described the deal as a North American first. It came amid a crackdown by Vancouver and other cities over concerns that Airbnb and similar services were hurting local housing markets.
When unveiling the program in February, 2018, B.C. Finance Minister Carole James said the revenue would be used to fund housing affordability measures.
The province also said it expected Airbnb to remit $16-million in provincial sales tax and $5-million in MRDT in the first year.
Alex Dagg, Airbnb public policy director for Canada, said in an interview Tuesday that her company is pleased to be making such significant contributions to B.C.
However, she said that other online accommodation providers are not paying taxes in the province. “It’s really important for our competitors to join us to contribute as well,” Ms. Dagg said.
“Our two biggest competitors are global billion-dollar companies who should be at the table collecting, too, and contributing to the economy and the budgets here in British Columbia.” Ms. Dagg said she was referring to Expedia, which owns Vrbo and HomeAway, as well as booking.com.
When the deal was announced, Ms. James cast the plan as a bid to ensure Airbnb and its customers were paying their fair share of taxes, and also said the province was hoping to strike similar deals with other accommodation platforms.
The minister was unavailable for an interview on Tuesday.
In a statement issued by her department on her behalf, Ms. James said the government recently negotiated a second major agreement with Misterb&b, a U.S.-based operation focused on LGBTQ2S+ accommodation.
Ms. James said the government looks forward to continuing continuing discussions to ensure all online accommodation providers pay their fair share of taxes.
With regards to the higher-than-expected tax revenues, Ms. James said in her statement that "The PST payment agreement is a new tax application, and as with any new tax application, we were conservative in our revenue projections.
“We’re closely watching the data as it comes in, and we’re making sure municipalities have the information they need to make decisions about regulating short-term rentals.”
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