British Columbia Taxes

[Lorelei1]

I am in need of some serious help! I don't think my tax settings are correct, I really don't know why my guests are paying so much taxes!

Can someone help me understand this. I have been a host for 7 years and always added the tax into my price. But I have now added my GST number and the taxes are outrageous. I'll include a picture of a reservation. Thank you!

 

[Mike-And-Jane0]

@Lorelei1  Looking below it seems that around 16% should be charged. I suspect this is the Occupancy tax shown in your booking. I suspect the property use tax is one that you have added in yourself and should probably be removed.

Federal Goods and Services Tax (GST)

The federal Goods and Services Tax (GST) is a value added tax of 5% that is applicable to most purchased goods and services. It is charged on all campsite and RV site bookings and room rentals in British Columbia.

Provincial Sales Tax (PST)

In British Columbia an 8% Provincial Sales Tax (PST) is charged on all short-term room rentals by hotels, motels, cottages, inns, resorts and other roofed accommodations. Campsite and RV site bookings are exempt from any PST.

The PST for other goods and services is set at 7%. Some items such as food and books are exempt this tax.

Not all provinces in Canada have PST. Alberta, for instance, has none. The Retail Council of Canada has a webpage on the breakdown of sales tax rates by province. The government bulletin PST 310 explains how PST applies to goods that are brought or sent into BC or received in the province.

Municipal and Regional District Tax (MRDT)

In British Columbia a Municipal and Regional District Tax (MRDT) of up to 3% is charged in provincially approved municipalities by hotels, motels, cottages, inns, resorts and other roofed accommodations. Select hotels in Vancouver levy an additional 1.5% Destination Marketing Fee (DMF) on top of the 2% MRDT; any additional MRDT is only charged on short-term room rentals and does not apply to overnight campsite or RV site bookings. It is worthy to note that the MRDT levy is used to fund local tourism marketing, including projects and programs. The government bulletin PST 120 on Provincial Sales Tax explains how PST and MRDT apply to sales of accommodation in BC.

[Anthony2357]

Hi Mike and Jane - i've just read your incredibly helpful message about local taxes that you left for another Airbnb host in January.  I'm from the UK, we have a property in a ski resort in British Columbia.  I'm fairly new on Airbnb and they are paying all my taxes - but it seems a lot.  And it all seems a bit of a muddle to me.

From what you said in your message I should pay 8% PST, 5% GST and 3% MRDT = total of 16%.  Is that correct?  Are the taxes charged on the total of the 'room rate' plus the airbnb fee?

How about the cleaning fee?

Ant & Kerry

[Lorelei1]

Thank you so much, it has really helped me! I've got it sorted, I appreciate your help!

[Joanne92]

Hi there,

I was trying to reconcile my books today and also found extra taxes. What is property use tax?

I was of the understanding that I collect the 5% gst. The only other tax that the guest should be charged is 8% pst and in Parksville 2% MRDT. When I look at what the guest pays for taxes it is way more than that. Airbnb will not tell me how they come up with the numbers.

I also found out today that I pay Airbnb 7% pst on the host fee over and above the 3%.

I have just checked and my guests were paying 10% on booking fees (8% pst and @2% MRDT) which is what I understood it to be.  The host fee was 3% of the nightly rate + cleaning which is also correct.

[Amanda2748]

Hello @Joanne92 

I'm new to Airbnb.  Can you tell me how you collect the MRDT and PST?

I'm guessing in the Tax Tool page..... i can see where to add the GST percentage but where do I add the PST and MRDT?

thanks in advance for any help

Amanda

[Joanne92]

Hi @Amanda2748 

You no longer need to worry about the PST and MRDT anymore. Airbnb and VRBO will collect and remit on your behalf.  You only need to collect the GST.

Joanne

[Amanda2748]

Hello Joanne,

my understanding is, because I have a PST account with BC,  I'm responsible to collect and file, same with MRDT.  Airbnb and VRBO are not my only platform to receive bookings so I'm responsible for collecting and filing?  If you know any different, please let me know

Thanks

Amanda

[Joanne92]

Hi Lorelei!,

What are the property use tax?  I don't think you should be charging that in BC.

[Lorelei1]

Thanks, I finally figured it out and removed it!

[Denise1869]

Hi @Lorelei1  how did you remove it? Are you saying you removed the occupancy tax?

Thank you

Denise

[Lorelei1]

It looks like I did not remove it. It appears toe that the Property Use is GST as it is 5% and is sent toe remit.

 

[Lorelei1]

It looks like the Property Use tax is GST that I need to remit, as it is 5%. It still appears on my bookings.

[Daniel13755]

I have had the same question for awhile now and had a hard time finding the answers. My problem is that I've used Property Use Tax as GST, since if its 5% and I set it aside to remit, it doesn't really matter what its called. However, how do I stop Airbnb from charging GST since they don't know that I am also charging it now? The guests will be paying GST twice which will make the bookings too expensive.

[Paula]

Hello @Daniel13755,

Have you tried reaching out to the support team for assistance with your specific case? If so, what did they say?

Regards,