A pedestrian with luggage makes their way next to a downtown high-rise condo that has units registered as short-term rentals. A recent tax ruling will

Homeowners who regularly rent on Airbnb and other sites must pay 13% tax on property value when they sell, recent tax ruling finds

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2024-10-24 22:00:04

A pedestrian with luggage makes their way next to a downtown high-rise condo that has units registered as short-term rentals. A recent tax ruling will mean owners of such condos will need to pay HST when they sell.

A recent ruling by the Tax Court of Canada indicates homeowners who have regularly rented out their property on Airbnb or other short-term rental sites will be subject to paying 13 per cent HST when putting the home up for sale.

The 13 per cent tax will be applied to the total price paid for the property when sold, so could amount to tens — or even hundreds — of thousands of dollars.

While the sale of a previously occupied residential property is generally exempt from HST, the Tax Court of Canada ruled in March that the sale of a condo unit rented out on Airbnb for a number of short-term leases was subject to the tax.

It’s a ruling that will likely have big implications for short-term rental operators as it clarified that the CRA can charge the tax in cases similar to the ruling.