Nfld. & Labrador

City of St. John's wants to start taxing Airbnb rentals but needs province's help

The City of St. John’s wants to start taxing Airbnbs. The only thing stopping them is one word in the provincial legislation: "registered."

Mayor said taxing Airbnb could amount to $300,000 in revenue every year

Mayor Danny Breen wants to start taxing Airbnb rentals just like hotels and bed and breakfasts. (Eddy Kennedy/CBC)

The City of St. John's wants to start taxing Airbnb rentals. The only thing stopping them is one word in the provincial legislation: "registered." 

Airbnbs are not registered with the province, so the city can't charge the marketing tourism levy fee that bed and breakfasts, hotels and other registered rental properties pay. 

"They are a very big part of our tourism industry, and for that reason we feel like we should be collecting the tourism marketing levy on that because they avail of the services that help their operations as well," St. John's Mayor Danny Breen told The St. John's Morning Show

Levy need for future projects

Breen said the city is losing up to $300,000 in revenue every year. 

The tourism and marketing levy, added to the bills to hotel guests and people staying in bed and breakfasts, is four per cent. The money from that tax is used for destination marketing and to finance the convention centre. 

Under current legislation, Airbnbs are not registered with the province, which makes it hard for the City of St. John's to impose its marketing tourism levy. (Martin Bureau/Getty Images)

Breen said he expects to have a shortfall in the tourism marketing levy fund in the next few years so the cost of financing the convention centre will be paid out of general operating revenue. 

The levy would not be paid by the Airbnb hosts but by the visitors booking the accommodations. 

Breen said he has met with officials from the provincial government and is currently planning a meeting with Airbnb hosts. 

"I believe that we have an understanding there between us. I haven't had any overly negative reaction to it," said Breen. 

Breen said there are still some logistical issues the city would have to iron out, but he hopes that if all parties sit down together, they will figure out a way to do it. 

Airbnb on 'same page' as city

Nancy Wadden, spokesperson for Airbnb hosts in Newfoundland and Labrador, said she believes they are on the "same page" as the city. 

"We are just looking to be involved in the conversation … and we are looking for a fair and reasonable rate," said Wadden.

Hundreds of homes located in and around St. John's are available for rent on Airbnb. (Airbnb.com)

Wadden said she feels like the best way to administer the fee is through the Airbnb platform itself. Airbnb and the city would work out how to collect the money from the online booking site.

She believes this could also be a model for other cities, as more municipalities consider taxing Airbnbs. 

The Town of Bonavista has decided to tax Airbnb property owners at the town's business rate, using properties' assessed values, and have at times cut off services for operators with unpaid bills.

Government reviewing policy

A spokesperson for the Department of Tourism, Culture, Industry and Innovation said the government has been working with Hospitality Newfoundland and Labrador to ensure "fairness and equity" related to short-term rental accommodations. 

"A working group has been established — linking the departments of Finance, Municipal Affairs and Environment and Service NL — to address taxation and regulation related to short-term rental accommodation," reads an email sent to CBC News.

The email says departments are reviewing regulatory framework and legislation.

Read more from CBC Newfoundland and Labrador

With files from The St. John's Morning Show

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