Despite illegal status, Airbnb taxes headed for Oak Bay

Airbnb to pay PST and municipal tax after negotiation with the province

Oak Bay expects to receive some of the funds now that Airbnb will pay tax, despite the fact the short term rentals are illegal.

Finance Minister Carole James made the tax announcement at the legislature Wednesday, saying the government had been looking at new tax models to build tax fairness.

Airbnb will begin collecting the 8 per cent PST and the up-to-3 per cent municipal and regional district tax (MRDT) in short-term accommodations provided in B.C.. Oak Bay has a municipal 2 per cent hotel room tax. The province estimates Airbnb will remit about $16 million through the PST and an additional $5 million through the MRDT.

“As a government our role is to make sure that everyone is playing by the same rules,” James said. “In order to do that we need to look at a new way of doing business and new tax models.”

The money collected is to help fund affordable housing in the province as well as provide tax fairness for the hospitality industry, James said.

Airbnb is an American company that runs an online marketplace and hospitality service for people to lease or rent short-term lodging including cottages, apartments, rooms and more, with many Oak Bay listings featured on its website. Some municipalities such as the City of Victoria have made moves to regulate short term rentals. In Oak Bay, they’re illegal based on zoning and home business bylaws.

“Airbnb are not permitted to operate in Oak Bay. They are illegal,” says Oak Bay Mayor Nils Jensen. “These are often in what we now call established neighbourhoods in homes that are designated as single family dwellings.”

That said, last September, Oak Bay met with Airbnb personnel during the Union of BC Municipalities conference and learned some do exist in the community. However, based on the numbers told to Oak Bay last fall they don’t expect a windfall.

“We have a hotel tax of 2 per cent that’s collected by the hotel and the guest house, they in turn remit it to the province, who in turn pass it to us,” Jensen said. Those fund Oak Bay Tourism initiatives. “There may be extra monies coming to us, but it has to be said again that these are illegal and should not be operating.”

If Airbnb contributed to a similar tax in 2017, the government would have collected about $18 million.

“This is a defining moment for Airbnb in British Columbia,” said Alex Dagg, public policy manager for Airbnb in Canada. “These changes are a welcome opportunity to continue helping the province and its residents benefit from the positive economic impacts of home sharing.”

“While this announcement is a good first step from a tax fairness perspective, it will not change behaviour or free up long-term rental stock that has been taken out of the market due to short-term rental services,” said Andrew Weaver, leader of the BC Green Party, in response to Wednesday’s announcement. “The province needs to proactively encourage and support local governments to take action to restrict and regulate short-term rentals, as the City of Vancouver and the City of Victoria have done.”

In the extremely tight rental markets, with near zero per cent vacancy rates, short-term rentals like Airbnb take from the rental supply, Weaver said. “We are in a crisis – we need to ensure that houses are used for homes for British Columbians first and foremost.”


 

cvanreeuwyk@oakbaynews.com

Like us on Facebook and follow us on Twitter.

Just Posted

‘ALR golf courses should return to farming,’ says ex-ALC chair Frank Leonard

Former mayor says Saanich could appeal Cedar Hill Golf Course application

Is Steve Nash Vancouver Island’s best athlete of all-time?

As Captain Canada gets ready to enter basketball’s Hall of Fame it’s time to debate his legacy

Who is Vancouver Island’s greatest athlete ever?

We want to know, you get to choose in a 64-athlete tournament bracket

Saanich taking heat over process surrounding Haro Woods

District delays decision on the future of cycling in popular Saanich park

UPDATE: VicPD defend decision not to warn public after initial attack

String of assaults downtown Wednesday night left several people with serious injuries

VIDEO: Grand Forks shores up defences as floodwaters rise to peak levels

Canadian Forces, volunteers working to protect low-lying areas

UPDATE: Blood found in missing man’s vehicle

Searchers are sticking to a high-priority area before expanding their search for Ben Kilmer

Chilliwack Chiefs moving on to RBC Cup final after thrilling win over Ottawa

Kaden Pickering scored the winning goal in the 3rd period as Chilliwack won their semi-final 3-2.

VIDEO: As floodwaters recede, crews assess the damage to Grand Forks’ downtown

More than four dozen firefighters and building inspectors came out to help

Royal Oak loses Canada Post outlet

Potal outlet in Country Grocer closed after nearly two decades, service handled by other locations

Wellington Dukes pull off epic upset of Wenatchee at RBC Cup

The Dukes are off to the championship game after downing the Wild 2-1 Saturday at Prospera Centre.

LETTER: Dog poop on school grounds has Cordova Bay Grade 3s looking for answers

We are Grade 3 students at Cordova Bay School. We have noticed… Continue reading

Canada to face U.S. for bronze at world hockey championship

Canada was looking to play in the gold medal game for a fourth straight year, but saw 3-2 loss

Searchers for Vancouver Island father turn focus to Cowichan River

Cowichan SAR joined by many other SAR groups, volunteers now determined to find missing man

Most Read