Airbnb and VRBO hosting runs differently from renting out a property long-term, and the tax treatment is different too — starting with GST/HST.

Short-Term Rental Income Is Taxable for GST/HST — Long-Term Rent Isn't

Long-term residential rent — a lease of a month or more to the same tenant — is exempt from GST/HST. Short-term accommodation, generally anything under a month to the same guest, which covers most Airbnb and VRBO bookings, is a taxable supply. That means once your taxable short-term rental revenue crosses $30,000 — in a single quarter or over four consecutive quarters — you're required to register for GST/HST and charge it on your bookings.

The Platform May Already Be Collecting GST/HST For You

Since 2021, platforms like Airbnb are required to collect and remit GST/HST on short-term accommodation bookings on behalf of hosts who aren't GST/HST registered themselves. If you're not registered, check your booking statements — the platform may already be handling this. If you are registered, you're responsible for charging and remitting it directly, and you'll need to give the platform your GST/HST number so it stops collecting on your behalf.

Record the Full Booking Amount, Not Just Your Payout

Airbnb and VRBO payouts arrive net of the platform's service fee. For your books to be accurate, record the full booking amount as revenue and the platform fee as a separate expense — not just the net deposit that lands in your bank account. Netting them together understates your revenue and hides what the platform is actually costing you.

Mixed-Use Properties Need Allocated Expenses

If you're renting out a spare room in a home you also live in, or splitting time between personal and rental use of the same property, your expenses need to be prorated — by space, by time, or a reasonable combination of both — between personal and rental use. Only the rental-use portion of mortgage interest, utilities, insurance, and property tax is deductible.

Changing a Property's Use Can Have Tax Consequences

Converting part or all of a home you live in into a rental — even a short-term one — can trigger a deemed disposition for capital gains purposes under the CRA's change-in-use rules, though elections exist in some situations to defer that.

There's a second, separate GST/HST consequence worth knowing about too. A property used mainly for long-term rentals generally counts as a "residential complex," which is what keeps a future sale exempt from GST/HST. Switch it over to mostly short-term, Airbnb-style bookings, and it can lose that status — meaning GST/HST can apply to both the switch itself and the eventual sale, even after years of exempt long-term use beforehand. This isn't hypothetical; it's played out in a real case that went all the way to the Federal Court of Appeal.

Both angles are genuinely case-specific and worth a conversation with your accountant before you make the switch, not something to assume your way through — especially if a sale is anywhere on your horizon.

What You Can Deduct

• Platform service fees and payment processing fees
• Cleaning fees and supplies
• A prorated share of mortgage interest, utilities, and insurance for mixed-use properties
• Furnishings and repairs specific to the rental space
• Municipal licensing fees or accommodation taxes, where they apply

FAQ

Do municipal short-term rental rules affect my bookkeeping? Many cities now require STR licensing and some charge a municipal accommodation tax on top of GST/HST. Rules vary a lot by municipality and change often, so check your specific city's current requirements rather than assuming your neighbour's rules apply to you.

What if I rent my property short-term for part of the year and long-term the rest? Track the two periods separately. Short-term stretches are taxable for GST/HST; long-term stretches generally aren't. Mixing them in one undifferentiated income account makes it hard to know what portion of your revenue was actually taxable.

Do I need to register for GST/HST if I'm under $30,000? Not required, but you can register voluntarily — which lets you claim input tax credits on your rental-related expenses. Whether that's worth it depends on your numbers, and it's worth running by your accountant.

Platform fees, GST/HST on bookings, mixed-use allocation — Margot knows exactly where STR bookkeeping gets tricky. Ask Margot a question right now.