Winnipeg set to apply five per cent hotel tax to rentals

Canada: Winnipeg is set to apply a five per cent tax Airbnb rentals like it does with hotel rooms as it attempts to “level the economic playing field” in the accommodations sector.

The city is in the process of updating its accommodation tax bylaw, which has required hotel rooms to levy a five per cent surcharge on their rooms since 2008. City spokesperson Kalen Qually said the update was a move to “specifically include online platform rental services”, such as Airbnb

A report is expected to be put before the city council this year, and the council will have to vote to implement any updated measures.

Speaking to CBC, city council finance chair Scott Gillingham said: “It’s a matter of equity.”

The proposed change arrives at a time when the hotel industry is calling on municipal, provincial and federal governments to make Airbnb pay the same taxes as hotels as well as comply with similar health and safety regulations.

Manitoba Hotel Association president Scott Jocelyn told CBC: “It’s very, very difficult for us to compete if they don’t have to collect the taxes hotels do. This is a good first step.

“We just want to compete and we want the level playing field. If someone is making a choice of where they’re going to stay, it’s something that works against us and we don’t think that’s fair,” he added.

Leading figures from the hotel industry have claimed that governments should treat Airbnb as a major player in the hospitality business, rather than a group of small property owners who let their rooms or homes.

A data analysis conducted by CBC revealed that half of the 502 Airbnb listings for full homes or suites in Winnipeg on 10 April were managed by people who also manage or own other Airbnb properties in Winnipeg.

Airbnb has previously said it is willing to comply with municipal and provincial tax regimes.

There are currently six cities in Ontario which require Airbnb to collect a four per cent municipal accommodation tax, including Mississauga and Ottawa. At the same time, municipalities in British Columbia require Airbnb to collect a tax equating to two to three per cent of the listing price and in Quebec, there is a 3.5 per cent provincial lodging tax on Airbnb rentals.

B.C. also applies an eight per cent provincial sales tax rate for accommodations to Airbnb rentals.

Proceeds from the five per cent accommodation tax in Winnipeg go directly towards the city’s destination marketing reserve funding, which is used to promote events and conferences there. Budget documents reportedly suggest the city is expecting to collect up to $9.9 million in accommodation taxes in total this year.

Meanwhile, Airbnb Canada has said it is prepared to comply with the proposed tax changes in Winnipeg.

Spokesperson Alex Dagg said: “When it comes to accommodation taxes, our community wants to pay its fair share and ensure local governments can benefit from the economic impact of home sharing.”

He added that Airbnb already collects tourism or hotel taxes in over 400 jurisdictions.

The hotel industry, however, is pushing for Airbnb rentals to be subject to provincial and federal sales taxes.