British Columbia

Airbnb tax won't change Victoria's plans to regulate short-term rentals, councillor says

Tourism and municipal officials see Airbnb's tax-collecting agreement with the B.C. government as a good first step toward levelling the playing field with the hospitality industry.

Measured praise for the online booking platform's first step to level playing field with hotels, motels

Victoria Airbnb listing features a view of Victoria city hall, where councillors are finalizing plans to restrict and regulate short-term rentals. (Airbnb)

Airbnb's agreement to collect taxes for the B.C. and municipal governments received measured praise on tourism-dependent Vancouver Island this week as the ubiquitous vacation rental booking service shed some of its black-market reputation.

Victoria Coun. Ben Isitt still opposes the presence of the online booking service in the Victoria rental market, but said the deal is a step forward.

However it won't stop the city's plans to regulate the short-term vacation rental industry, he told On the Island host Gregor Craigie.

"Rather than have a complete regulatory vacuum, I think it is a good step that the province has moved forward with taxation of these companies," Isitt said, though he would prefer to see vacation rentals booked through a local online service.

Minister of Finance Carole James announced the agreement Wednesday in Victoria. It will see Airbnb collect 11 per cent in provincial sales tax and municipal tourism marketing levies. James said the move will help fund housing affordability initiatives in B.C.

B.C. Finance Minister Carole James and Alex Dagg, Airbnb public policy manager, announced an agreement Feb. 7 for the online vacation rental company to collect provincial and municipal taxes on reservations. (Michael McArthur/CBC)

Isitt said Victoria is close to final approval of regulations that will permit residents to rent up to two rooms in their principal residence at any time as long as they live there, and entire living units if they're away on vacation or for work. 

"I personally don't envision a major change in the regulatory direction our city's moving in," he said. "The city's fee is not a tax. We're still determining the level it would be set at."

The feedback the city received was that the proposed annual licence fee of $2,400 for year-round commercial Airbnb vacation rentals was too high, Isitt said.

On the other hand, the proposed fee of about $150 a year for home sharing or occasionally renting a whole unit was seen as more reasonable.

The fees will cover costs of enforcement and operating the short-term vacation rental licensing system.

Tourism Victoria CEO Paul Nursey called the Airbnb agreement with the B.C. government "a big step" toward fairness.

Short-term rentals here to stay

Nursey said short-term vacation rentals have proven they have a place in the market.

Further measures that the tourism and hotel associations in B.C. would like to see are federal GST charged for short-term rentals and commercial property taxes for every short-term vacation rental that is a full-time commercial business.

"House sharing in your primary residence has never been a concern for us, provided that it's taxed and that it's accepted by the community," Nursey said. 

"What we do object to is the large-scale commercial operators that are taking long-term housing and worker housing out of the market."

With files from CBC Radio One's On the Island and All Points West.