What is Ontario Municipal Accommodation Tax (MAT)?

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How it works

A municipality must first pass a by-law to implement the MAT, which specifies the tax rate and administrative rules. Once active, short-term rental operators in that jurisdiction are required to collect the tax from their guests at the time of payment.

This amount is calculated as a percentage of the total accommodation cost. The host must then remit these collected funds to the municipality according to a set schedule, typically monthly or quarterly.

While some booking platforms may facilitate collection, the host is ultimately responsible for compliance.

Why it matters

For vacation rental hosts in participating Ontario municipalities, collecting and remitting the MAT is a legal requirement, and failure to comply can result in fines and legal action. Properly managing this tax is essential for legal operation and financial accuracy.

It also supports the local tourism economy, which can in turn increase demand for accommodations in the area.

Examples

• A host in Toronto lists their downtown condo and must add the city's 4% Municipal Accommodation Tax to the nightly rate for a guest's weekend stay.
• A cottage owner in Prince Edward County rents their property for one week. They calculate the 4% MAT on the total rental fee and include it in the final invoice to the guest.
• A property manager operating several units in Ottawa uses vacation rental software like Lodgify to automatically add the 4% MAT to every booking invoice for stays under 30 days, simplifying the collection and remittance process.
• During the Stratford Festival, a bed and breakfast owner collects the 4% MAT from all guests staying less than 30 consecutive nights and remits it to the City of Stratford quarterly.