Toronto implements 4% tax on short-term rentals and hotels

Mar 27 2018, 7:22 pm

The City of Toronto has announced it will be implementing a 4% Municipal Accommodation Tax (MAT) on hotels and short-term rentals, including Airbnb.

The tax will affect all hotel accommodations within Toronto as of April 1 and short-term rentals on or after June 1, pending the enactment of the short-term rental bylaw.

The MAT will apply to all rooms used for rental accommodation stays of four hours or more, and will only be applicable at motels, hostels, private and fraternal clubs, condo hotels, short-term rentals, multi-use complexes used for transient accommodation, and all Toronto hotels.

This includes full service, limited service, and small hotels.

According to a release from the City, other services, including meeting room rentals, food and beverage, room services, internet and phone charges, will be excluded from the tax provided they are itemized separately on the bill.

The MAT will be applied to hotel guests’ bills when they pay for their accommodations beginning this Sunday (April 1), and the bill will include a separate line identifying the new tax.

Ontario rent control


As for short-term rentals, the City’s new short-term rental bylaw is under appeal at the Ontario Municipal Board (OMB) and will only come into effect on or after June 1, pending the OMB decision.

For short-term rental guests, the tax will be automatically collected through the short-term rental platform’s transaction process.

A portion of this tax will provide funding towards Tourism Toronto to support the city’s tourism industry, which recently broke a tourism record with 43 million visitors in 2017.

The tax will also provide funds for the City to support programs and services, such as road repair, transit, police, EMS, economic development, culture, parks and recreation, that visitors can take advantage of when they visit Toronto.

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