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What is Canada GST/HST for Short-Term Rentals?
GST/HST for short-term rentals refers to the Canadian federal and provincial sales taxes applicable to the rental of a property for less than one month at a time. The Goods and Services Tax (GST) is a 5% federal tax, while the Harmonized Sales Tax (HST) combines the GST with a provincial sales tax in certain provinces.
Under CRA rules, providing short-term accommodation is considered a taxable supply. Operators earning over $30,000 in worldwide taxable revenue within four consecutive calendar quarters must register for a GST/HST account and apply these taxes to their rental charges.
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How it works
Property owners must first track their rental revenue to determine if they are a 'small supplier'. If their total taxable revenue exceeds $30,000 in a 12-month period, they cease to be a small supplier and must register for a GST/HST account with the CRA.
Once registered, hosts are obligated to charge the applicable tax rate—either the 5% GST or the provincial HST rate (e.g., 13% in Ontario, 15% in Atlantic Canada)—on the total rental price. These collected funds must then be remitted to the CRA, typically on a quarterly or annual basis.
Registered hosts can also claim Input Tax Credits (ITCs) to recover the GST/HST paid on their business-related expenses.
Why it matters
Compliance with GST/HST regulations is a legal requirement for qualifying vacation rental operators in Canada. Failing to register, collect, and remit these taxes can lead to significant penalties, back taxes, and interest charges from the CRA.
On the other hand, proper registration enables hosts to claim ITCs on business expenses like cleaning, utilities, and furnishings, which lowers their net tax payable and improves profitability. Managing these tax obligations correctly is fundamental to operating a lawful and financially viable short-term rental business.
See the official website for current details.
Examples
- A host with a condo in Vancouver, British Columbia, earns $50,000 in rental income over a year. Since this exceeds the $30,000 small supplier threshold, they must register with the CRA and start charging 5% GST on all future bookings.
- An operator of a cottage in Muskoka, Ontario, reaches $31,000 in rental revenue in the third quarter of the year. They must now register for an HST number and begin collecting 13% HST on their rental fees, remitting the collected amount to the government.
- A registered host in Calgary, Alberta, purchases new bedding and pays for professional photography for their listing. They can claim Input Tax Credits (ITCs) for the 5% GST paid on these expenses, which reduces the total amount of GST they owe the CRA from their rental income.
- A homeowner in Manitoba rents out a basement suite occasionally, earning about $12,000 per year. As their revenue is below the $30,000 threshold, they are considered a small supplier and are not required to register for or collect GST on their rentals.
Frequently asked questions
What is the small supplier threshold for short-term rentals in Canada?+
Does the applicable sales tax rate vary by province?+
Are booking platform fees subject to GST/HST?+
How can I keep track of my income to know if I've crossed the threshold?+
Related terms
Canada Form T776 (Rental Income)
Canada Form T776, officially titled 'Statement of Real Estate Rentals,' is a tax form used by Canadian property owners to report their annual rental income and…
Tax Collection
Tax collection is the process by which vacation rental hosts and managers charge, collect, and prepare to remit applicable taxes from guests to the appropriate…
Tax Remittance
Tax remittance is the process of forwarding taxes collected from guests, such as occupancy or sales tax, to the appropriate government authorities.
Lodging Tax
A lodging tax is a tax levied by government authorities (such as city, county, or state) on the rental of short-term accommodations, including vacation…