Airbnb will start collecting both provincial and municipal sales taxes in British Columbia, the provincial government announced on Wednesday.
Moving forward, the online home rentals platform will collect an eight percent provincial sales tax (PST) on behalf of hosts. Depending on the municipality, it will also collect up to three percent in municipal and regional sales taxes (MRDT).
According to the provincial government, the new revenue will add approximately $16 million annually to the province’s coffers, while the regional sales tax is expected to bring in $5 million annually. The $16 million and $5 million are earmarked toward affordable housing and promoting local tourism, respectively.
“British Columbians want access to the sharing economy – and they want it to be fair,” said BC finance minister Carole James. “This initiative will provide additional revenues to address housing affordability, and it improves tax fairness for all British Columbians.”
Meanwhile, Alex Dagg, public policy manager for Airbnb in Canada, said, “This is a defining moment for Airbnb in British Columbia.”
She added, “These changes are a welcome opportunity to continue helping the province and its residents benefit from the positive economic impacts of home sharing.”
The agreement is the first of its kind for the province, though governments in other jurisdictions like Michigan, Nevada and California, Airbnb’s home state, have implemented similar measures. Closer to home, in 2017 Quebec instituted a province-wide 3.5 percent Airbnb tax.
In the future, the provincial government plans to reach similar agreements with other rental platforms like VRBO. There are currently approximately 18,500 Airbnb hosts in BC.
This article was originally published on MobileSyrup