I am starting as a co host and i need advice
Latest reply
I am starting as a co host and i need advice
Latest reply
Ahhh....taxes 🙄
First, I'm not a tax accountant and can only provide some general information. You probably should consult a tax accountant and maybe check with other Hosts in your area (local Airbnb Host club) and see what they are doing.
Sometimes Airbnb allows you to collect a custom tax in some jurisdictions - sometimes not. If Airbnb doesn't allow you to add a custom tax to the listing, then Hosts must either explain to guests after booking about the tax and then send a resolution center request to pay it, or they just absorb the cost themselves. What a pain! You would have to talk to an accountant to find out if you absorb the tax yourself and pay it out of pocket to Thunder Bay, would you be able to deduct that cost as a business expense?
Right now it appears that Airbnb is collecting the 13% HST tax, and another tourist tax on your bookings. Not sure if the "tourist tax" is the MAT or not? Looks like Thunder Bay increased the MAT to 5%:
Airbnb Taxes in Canada
https://www.airbnb.com/help/article/2283
To determine if you can add a custom tax (after turning on Pro Tools). go to:
-Listing Editor
-Click the 3 lines top right (that's a preferences icon)
-Click Taxes
If you don't see the Custom Tax Collection box, then Airbnb doesn't allow you to add a custom tax to the listing. You can collect that tax from guests after booking, or absorb the tax yourself and pay out of pocket.
Some Hosts add the tax as a "Community Fee" to their calendar (where your cleaning fee is). It's only available if you have Pro Tools turned on. The disadvantage is this is added to your nightly rate shown to guests and puts you at a competitive disadvantage if other Hosts aren't doing this.
Whatever you decide to do, be sure to disclose the 5% MAT on your listing and how you are collecting it: paying it yourself, added to the listing as a "Community Fee", or requesting it separately from guests after booking. I would provide the link to the Thunder Bay, CA website regarding the MAT in a message to guests:
Municipal Accomodations Tax - Thunder Bay
https://www.thunderbay.ca/en/city-hall/municipal-accommodation-tax.aspx
https://www.thunderbay.ca/en/city-hall/short-term-accommodations.aspx
Thunder Bay does say you are supposed to be providing a "separate iline item" for the tax on an invoice to each guest:
"Collect the MAT from your guests: Ensure that the tax is applied to the accommodation charge only and not to other fees such as amenity fees and service charges including meals, laundry, room incidentals or parking provided they are separately itemized on the invoice. The Municipal Accommodation Tax must be identified as a separate item or charge on each bill, receipt or invoice."
Do let us know here what happens...
Thanks for the tag @Mike-And-Jane0
It does look like a lot of Hosts aren't collecting the 5% MAT and paying it. Seems like the city is actively trying to crack down on that:
Some Short Term Rentals Not Paying Municipal Accomodation Tax
Here is an Airbnb article I found on taxes in Canada
https://assets.airbnb.com/help/AirbnbTaxGuide2024_Canada_ENGLISH.pdf
See above for info on custom taxes. I suggest to my Host clients they keep a spreadsheet of every reservation and breakdown the taxes. You will probably receive a not so welcome letter from the City at some point if the taxes haven't been paid (including possible fines).
