Vancouver to ask province for share of PST collected by Airbnb
Credit to Author: Joanne Lee-Young| Date: Fri, 08 Nov 2019 01:12:10 +0000
The City of Vancouver is planning to ask the province for about $10 million of the total $33.7 million in provincial sales tax that Airbnb says it remitted in the first year of a tax agreement.
That is the estimate of what Airbnb has collected in PST from its short-term rental operators specifically based in Vancouver, according to Kathryn Holm, chief license inspector with the city.
The province has always earmarked the PST collected from Airbnb for investing in affordable housing, but exactly how and where the money will be spent has yet to be determined.
“We have had some key measures of success” when it comes to regulating the growth of short-term rentals and the impact on affordable housing, said Holm, describing how some of the city’s efforts in the last year have resulted in a higher number of “complying operators.”
And so, “we want to get some of that (provincial sales tax) money so it can be allocated to the city’s own 10-year housing strategy.”
The tax agreement between the province and Airbnb is for the company to remit eight per cent in provincial sales tax and up to three per cent in municipal and regional district tax, according to the province’s finance ministry.
In the case of Vancouver, the $3.5 million of the municipal and regional district tax collected by Airbnb and allocated to Vancouver will go to Tourism Vancouver for local tourism promotion. The city could instead use the $3.5 million for affordable housing initiatives without submitting a new application as long as the money is spent in Vancouver and not another region.
The finance ministry did not comment on Vancouver’s possible request for its share of the PST revenue collected by Airbnb.
Airbnb is not the only platform that offers short-term rental listings, but it accounts for 82 per cent of active listings in Vancouver.
The city will also increase the cost of a short-term rental business license from $51 a year to $99 a year for 2020, with the increase to cover the costs of licensing and enforcement.
Other new measures by the city include establishing a community working group to help “bolster citizens’ confidence” in the city’s regulating of short-term rentals. This would include property managers, real estate and tourism representatives, as well as long-term tenants and housing activists “who have called on the city to regularly accept offers of resources from the community” such as information about fraudulent or commercial listings that contravene rules.
“It’s good that short-term rental hosts are paying taxes, but those taxes don’t come close to outweighing the housing costs which short-term rentals are imposing on the province,” said David Wachsmuth, who is co-authoring an upcoming report about short-term rentals.
“The City of Vancouver did a cost-benefit analysis on Airbnb’s suggestion to tax commercial operators (as opposed to those who are renting out a room or their entire principal residence) and use the money to build new, affordable housing, and they concluded the amount of revenue earned wasn’t nearly sufficient to offset the actual loss of housing that the commercial operators cause.”