Airbnb to collect provincial, municipal taxes on short-term rentals in B.C.

B.C. and Airbnbhave reached an agreement that will see the online short-term rental company collect provincial and municipal taxes through its platform.

Minister of Finance Carole James says the move will help fund housing affordability measures for B.C.

"British Columbians want access to the sharing economy and they want it to be fair," said James.

"This initiative will provideadditional revenues to address housing affordabilityand it improves tax fairness for all British Columbians."

Airbnbwill be collecting the eightper centprovincial sales tax amounting to an estimated $16 million annually, which government will earmark foraffordable housing and up to threeper cent municipal and regional district tax, an estimated $5 million, which will go toward promoting tourism.

"It's a very small step when it comes to housing," admitted James. "Today really is a tax announcement. It's about a more fair system."

Last year, Quebecannounced a province-wide 3.5 per centAirbnbtax, which the company collects and gives to the province on every rental, with the moneyraised fundingthe province's 22 regional tourism offices.

But this is the first timeAirbnbhas reached an agreement with a provinceon remitting PST.

"This is a defining moment for Airbnb and more than 18,000 hosts across the province," said Alex Dagg, the company's public policy manager in Canada.

B.C. will be moving toward similar agreements with other accommodation platforms likeVRBOin the near future.

Cities can still regulate

Karen Sawatzky, a researcher who has studied the effects of short-term rental properties in Vancouver, said the announcement would help create a more level playing field between Airbnb and hotel operators.

"I think this is mostly a good-news story for the tourism industry, and it's fair ... it's reasonable they should pay these taxes, because tourists come and have an impact on our services," she said.

But Sawatskysaid while it would raise revenue, it wouldn't have a large impact on the stock of affordable housingwith the money raised equivalent to about 40-50 new units in Vancouver or Richmond and that it was up to cities to also regulate short-term rentals.

"It's kind of two different strings. It's good that the provincial tax that we collect through this will go to affordable housing, but we need to be protecting our existing rental stock from conversions," she said.

Some cities, including Victoria and Vancouver, have instituted their own regulations, forcing people posting properties on sites like Airbnbto pay an annual licence, with fines for people who don't comply.

Green Party Leader Andrew Weaver said other cities should do the same.

"While this announcement is a good first step from a tax fairness perspective, it will not change behaviour or free up long-term rental stock that has been taken out of the market due to short-term rental services," he said in a statement.

"We are in a crisis we need to ensure that houses are used for homes for British Columbians first and foremost."

• Vancouver developer fined for running short-term rentals
• Struggling with the cost of rent? It's not just Vancouver