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Hotel Room Tax (HTR) and Implications
on Short Term Vancouver 2010 Rental Accommodations for Homeowners
We recently asked CRA directly as to the implications
of renting out your home or condominium apartment as a rent 2010
accommodation (either furnished or unfurnished) in regards to
the Hotel Room Tax (HTR) in addition to other municipal taxes.
This is what CRA has to say regarding the 2010 Olympic rentals
and charging the HRT Hotel Room Tax on your furnished and unfurnished
suites.
Short Answer: Short term rentals are taxable
under the Hotel Room Tax Act (the Act) when an operator has four
or more units of accommodation. Therefore, if you are managing
or have four properties for rent during the 2010 Vancouver Olympic
Games, your rentals are subject to the Hotel Room Tax or HTR,
so make sure you apply for your HTR registration number. Remember
that your tenants will need to pay this Hotel Room Tax on their
short term furnished Vancouver 2010 rental accommodation, so they
will need to budget for this. In addition, you have to make sure
that your renters are fully aware of this Hotel Room Tax which
is in addition to the rental rate that you provide them for the
furnished 2010 Olympic housing, whether it is furnished or unfurnished.
The Hotel Room Tax and 2010 Rental accommodations is basically
subject to all apartments and homes for rent throughout the Greater
Vancouver, Squamish and Whistler districts and is applicable to
short term rentals (like less than one month). If you are classified
as an operator, you are required to charge 8% Hotel Room Tax (HRT)
plus any other addition local Municipal and Regional District
Taxes of up to 2% of the purchase price on all Vancouver 2010
rental accommodation that you provide as a short term rental during
the Winter Olympic Games.
The Analysis Around Charging the Hotel Room
Tax on 2010 Rental Homes and Suites
Analysis: HRT, or the BC Hotel Room Tax applies
to the purchase of a unit of accommodation in British Columbia,
including lodging in hotels, motels, resorts, bed-and-breakfasts,
and similar places for the Vancouver 2010 Olympic Winter Games
as well as at any other time for short term rental accommodation.
It applies to both furnished and unfurnished Vancouver 2010 Olympic
housing suites as well. It also includes short term rentals of
cabins, cottages, condominiums and similar places during the rent
2010 Vancouver Games. A unit of accommodation is the basic unit
rented to a customer during the short-term 2010 rental accommodation.
For example, a unit of accommodation in a bed and breakfast is
a room, while if a cabin is rented as a whole, the unit is the
cabin. For the purposes of the BC Hotel Room Tax Act you are likely
to be classified as an operator if you manage four or more units
for short term rentals as rent 2010 Vancouver homes or suites.
The number of units of rent 2010 Vancouver accommodation you offer
is based on the total number of units in British Columbia, even
if some of the units are in separate establishments, locations
or have different owners. If you offer three units at a bed and
breakfast in Squamish during the Vancouver 2010 Olympics, and
you offer a private cabin in Whistler during the Winter Games
as well as furnished 2010 Vancouver accommodation on behalf of
another owner, you are required to register because you offer
a total of four units of accommodation. This would be subject
to the BC Hotel Room Tax of 8% for all four units of 2010 Vancouver
accommodation that you are offering. An operator of BC short term
2010 rentals is defined as "a person, other than a tourism
agent who, in the normal course of the person's business, sells,
offers to sell, provides, or offers to provide furnished or unfurnished
rent 2010 Vancouver Olympic accommodation in British Columbia".
To qualify as a BC 2010 rental short-term operator and be required
to levy and collect tax on the purchase price of accommodation,
a person does not have to own the furnished Olympic 2010 accommodation
that is being rented.
BC HRT Tax Collection for Furnished and Unfurnished
Vancouver 2010 Olympic Housing and Accommodation Units
If you are required to collect and remit HRT (or the BC Hotel
Room Tax) for your Olympic 2010 units of accommodation, then the
rate is 8% of the full purchase price of the BC accommodation.
Please note that registered operators in certain areas of the
province are also required to charge a Municipal and Regional
District Tax of up to 2% of the purchase price of accommodation
for furnished and unfurnished 2010 Vancouver Olympic housing suites.
The cities of Vancouver and North Vancouver each have this additional
2% HRT, which means that the total HRT in those cities is 10%.
In other words, the municipal taxes and Hotel Room Taxes in both
Vancouver and City of North Vancouver for short-term unfurnished
and furnished 2010 Vancouver rentals will be subject to the 8%
HRT plus 2% HRT municipal taxes for a grand total of 10% taxes
that you will need to charge the tenants and renters of your units
of accommodation. For an explanation of how to register for the
BC HRT, please refer to the Bulletin HRT 005, Registering to Collect
Hotel Room Tax, available at: http://www.sbr.gov.bc.ca/documents_library/bulletins/hrt_005.pdf.
Under the BC Hotel Room Tax Act, the short term rent 2010 Vancouver
accommodation HRT tax does not apply to lodging where: the operator
offers less than four units of accommodation or if the furnished
or unfurnished 2010 accommodation lodging is purchased by the
same person for a continuous period of more than one month. (A
month is calculated from a day in one month to a day numerically
corresponding to that day in the following month, less one day.
For example, February 22 to March 21 is a one-month period. The
same person must not be a travel agent, and the room may be occupied
by that person, that person's employees, or members of that person's
family). Note that other exemptions to the BC HRT or Hotel Room
Tax for the short-term furnished and unfurnished Vancouver 2010
Olympic rentals also apply. For further information please refer
to Bulletin HRT 006, Accommodations - Registered Operators of
Hotels, Motels or Other Lodgings, available on our website at:
,
and the B.C. Hotel Room Tax website, available at: .
This correspondence describes how the Ministry interprets the
relevant tax provisions for information purposes only. This response
may be impacted by variations in circumstance, subsequent changes
to legislation or subsequent court decisions. This response is
provided as an aid to understanding the legislation and is not
intended to replace the legislation. The Ministry is not responsible
for updating this response if there are any subsequent changes
to the law.
Tax Inquiries and Business Transformation Section
Policy and Legislation Branch
Ministry of Finance
CTB Reference:
Keywords: short term rentals
Legislation: HRT
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