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There is nothing magic about AirBnB!

Added: Oct 10, 2017
Category: For Vacation Home Owners

Numerous times I hear from people looking to invest in a vacation rental that if they 'only advertise with AirBnB' then any other regulations, legal implication, tax implication just don't apply.

So let me be clear.  AirBnB is a for profit online travel agent  period.  There isn't anything magical about them that make usurps your property from the rules or declaring it as income or having to collect sales tax or not needing the right insurance.

If your property is in Canada then there are a whole bunch of different things to consider during your due diligence:

1. what income tax issues can I face?  Regulations for resident Canadians differ from non resident Canadians. Short term Rental (stays under a month) are considered commercial income.

2. Commercial activity - local by-laws can restrict commercial activity in areas zoned as residential.  Revenue Canada doesn't care about zoning, it cares about the activity and it could deem your house as a commercial asset so you could owe Revenue Canada the full HST on the current market value of the house when you stop doing short term rental.  https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/gi-025-gst-hst-purchase-use-sale-vacation-properties-individuals/gst-hst-purchase-use-sale-vacation-properties-individuals.html

3.  Insurance - short term rentals aren't usually covered in home owner insurance, there fore you need special insurance and I strongly recommend $5 Million in liability insurance.   Online Travel Agents like AirBnb or VRBO or Trip Advisor can not lawfully provide insurance in Canada because of the regulations around insurance providers operating in Canada. 

4. Fire Code - each province has different Fire Codes.  In Ontario, short term rental is considered a Hotel type stay and therefore any homes that occupy more than 10 people at a time must have interior lighted exit signs and interior sprinklers.  If you don't then you can be subject to fines and in most cases any insurance you have will be void because of negligence under the fire code.

Before you buy or list your home for short term rental on any website.  Call the local municipal office and ask questions.   Also and I can't emphasize this enough, get the right financial advice from a profesional that is well versed in short term rentals in the applicable tax jurisdiction.  Yes, a smart accountant can be your best friend!

If you are a neighbour of a vacation rental and feel helpless, AirBnB does have a way to help you.   Firstly, AirBnb requires all home owenrs to attest that they are complying with local laws.   https://www.airbnb.ca/help/article/376/what-legal-and-regulatory-issues-should-i-consider-before-hosting-on-airbnb


Second you can use this link to help you resolve the issue, and its best to help AirBnB with this by including the airbnb link to the property.   https://www.airbnb.ca/neighbors     I would suggest you include the licensing requirements like this link from the Town of Niagara-on-the-Lake  https://notl.civicweb.net/document/7302/2017%20Short%20Term%20Rental%20Application%20Package.pdf?handle=4476FFDA263C4C87ACDDE48D4D65521C

fyi  for all those who are reading this and want to know what homes are licensed as short term rentals (Bed and Breakfast included!)  here is that link, although I wish the town would update it more frequently!!  https://notl.civicweb.net/document/8451/Short%20Term%20Rental%20List%20-%20August%2023,%202017.pdf?handle=6A63A1BA4D3147C98AD275E875613524


Well, enough about my rant!   The reason to own a vacation rental may vary, how you manage and operate your vacation rental my also vary.  But what doesn't vary is the rules, regulations, and taxes.   Doesn't matter what myth you have been told, or lead to believe.   Purchasing a vacation home is a major investment by any standards.     Otherwise there could be some long big term pain for little short term gain.



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