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Tourism Vancouver considering extending hotel tax to Airbnb suites

Homeowner Tom Haberstroh, who rents out his Vancouver basement on Airbnb, says he wouldn’t object to a tax on Airbnb units.

DARRYL DYCK/THE GLOBE AND MAIL

Vancouver tourism officials are floating the idea of extending a tax on hotel rooms to include suites rented through the website Airbnb.

The debate about whether to tax the popular service comes as cities in Canada and elsewhere struggle to regulate Airbnb, Uber and other online businesses that allow regular people to rent out their rooms or cars for a fee. Quebec recently announced plans to become the first province to tax and regulate Airbnb. Several American jurisdictions have already done so.

Ty Speer, Tourism Vancouver's president and chief executive officer, cautioned Wednesday no plan is imminent. However, Mr. Speer added that hotels contribute to the tourism sector through the hotel tax and "we would expect for there to be something coming into the mix from Airbnb."

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"We've met with Airbnb and we've had discussions with them about the best way for us to sort of work together," he said in an interview. "The openness is there and the willingness is there, it's just a matter of making sure that all of the issues that are important to the city, all of the issues that are important to Airbnb, surface and we find a way forward."

Mr. Speer said it's too early to tell exactly how the tax would apply to Airbnb and what the rate would be. The tax on Vancouver's hotel rooms increased on Sept. 1, from 2 per cent to 3 per cent, following a request to the province from Tourism Vancouver.

Mr. Speer said money collected through a tax on Airbnb suites would be used to promote tourism into Vancouver, in keeping with his organization's mandate.

But Karen Sawatzky, an urban studies master's student at Simon Fraser University who earlier this year released a report on Airbnb's impact on this city's tight rental market, called Tourism Vancouver's idea "backwards."

Ms. Sawatzky – who found the number of Airbnb units for rent in Vancouver increased by 17 per cent between January and July – said there are better uses for money collected from Airbnb than tourism.

"If they're going to tax it, I think some of the money should go towards offsetting the impact that Airbnb is having on the rental housing market," she said in an interview.

A city spokesperson, in a statement, said it is in the early stages of reviewing short-term rental accommodation and its potential impacts. The spokesperson said the review includes analyzing actions taken by other cities and collaborating with Tourism Vancouver.

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A spokesperson with the B.C. Ministry of Finance said working with Airbnb to streamline tax collection on behalf of hosts is one option the province may consider in the future.

Peter Huntingford, an Airbnb spokesman, said in an e-mail it has more than 6,000 listings in Vancouver. Mr. Speer said there are about 14,000 hotel rooms.

Mr. Huntingford said Airbnb first began collecting taxes on its units in Portland and San Francisco, and has since begun similar programs in Paris, Amsterdam, Chicago and Washington, among others. The taxes are collected from guests at the time of booking.

"Even with our team, figuring out how the different tax rules apply can be a challenge, so we're moving forward quickly, but carefully," Mr. Huntingford wrote.

"This isn't a matter of merely flipping a switch and it takes time, but we're committed to expanding this program."

Tom Haberstroh, who has rented out his Vancouver basement suite through Airbnb since May of last year, said he had about 80 guests the first year. Although there have been horror stories about guests trashing suites, Mr. Haberstroh said he has not had any issues to date.

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He said he would not object to a tax on Airbnb units.

"I think it will have zero effect on us, only because it will be applied to everybody [who rents out suites through Airbnb]," he said in an interview.

"And, two, it's a direct tax that Airbnb takes care of. It's not like we're going to have to remit it. It could be a pain in terms of bookkeeping if you had to remit it yourself, but Airbnb takes care of all of it."

Mr. Haberstroh added he declares the money that stems from his suite, and his insurance company is well aware the unit has been rented out through Airbnb.

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