Airbnb Host Tax Guide Canada: How Short-Term Rental Income Is Taxed

The CRA treats income from renting out a room, a suite or a whole home through Airbnb as taxable, and the main question for a host is what kind of income it is. This guide covers how the income is classified, what Airbnb’s platform reports, which expenses you can deduct, the principal residence question, and when the GST/HST applies. It is part of the self-employed taxes hub; for running a listing (pricing, city licensing, insurance), see how to make money with Airbnb and Airbnb rules by city.

Rental income or business income

The CRA’s accommodation-sharing guidance names Airbnb among the platforms it covers and says all income from accommodation sharing is subject to income tax. How you report it depends on the services you provide:

The difference matters beyond the form. Business income is self-employment income, so it also brings CPP contributions: the CRA says self-employed people are responsible for both the employer and employee parts, worked out on Schedule 8. The Canada Pension Plan Act, section 14, leaves out of self-employed earnings the income of “a business more than fifty per cent of the gross revenue of which consisted of rent from land or buildings”, so for a hosting business, CPP can also depend on how much of its gross revenue counts as rent. The self-employed tax calculator shows how that works and how much of it is deductible.

What Airbnb reports, and what it keeps

Under the Reporting Rules for Digital Platform Operators in Part XX of the Income Tax Act, platforms that let sellers sell goods or provide services such as rentals, rideshare and delivery report each reportable seller's identity and earnings to the CRA every year, starting with the 2024 calendar year, and give the seller a copy by January 31 of the following year. A seller with fewer than 30 sales of goods totalling $2,800 or less in the year isn't reported. Being reported, or not, doesn't change the seller's own tax obligations. Rentals of residential and commercial property are among the activities the CRA lists as covered (reporting rules for digital platforms). For a host, the report includes:

• For each reportable seller, the platform reports the total paid or credited to you and any fees, commissions or taxes the platform withheld or charged, broken down by calendar quarter.
• It also reports identifying information such as your name, primary address, tax identification number and date of birth.
• For rentals of real or immovable property, it also reports the address of each property listing.
• The CRA may charge a $500 penalty for each failure to give a platform your tax identification number.

In Canada, a tax identification number includes a social insurance number or a business number. These rules are an information return, not a tax.

The host service fee. Airbnb’s help centre says most hosts on the split-fee structure pay a 3% service fee, and under the single-fee structure, where the whole fee comes out of the host’s payout, most hosts pay 15.5%. The fee is a percentage of the nightly price and any fees charged by the host. It is a fee, not a sales tax. Your gross rents are what guests paid for the stays; the fee Airbnb keeps is a cost of earning that rent, and the CRA says you can generally deduct reasonable expenses you incur to earn rental income from a compliant rental.

Deductible expenses

If you rent part of the home you live in, most costs are split between the rented space and your own use:

For short-term stays, the CRA’s accommodation-sharing guidance adds a second step: after taking the rented share of the home’s area, multiply by the share of days in the year the space was rented. A room you list for part of the year carries only that part of the year’s costs.

Costs that relate only to the rented space, such as cleaning between guests, supplies left for guests and repairs to the rented room, are not split. The CRA’s rental income guide (T4036) lists the expense lines on Form T776, and rental property expenses you can deduct goes through them.

Rentals that break local rules. For a short-term rental (rented or offered for rent for less than 90 consecutive days), expenses and capital cost allowance for the days it doesn't comply with provincial or municipal rules (it isn't permitted at that location, or it lacks a required registration, licence or permit) can't be deducted. Airbnb rules by city covers the licensing rules in the main markets.

Furniture and appliances (capital cost allowance). Items that last, such as beds, furniture and appliances bought for the rental, are not deducted all at once. Most rental buildings bought after 1987 are Class 1, depreciated at 4% a year on a declining balance, and furniture and appliances are Class 8 at 20%; land isn't depreciable. In the year you buy, the half-year rule generally limits the claim to half of your net additions to a class, but it doesn't apply to property that qualifies for the accelerated investment incentive (acquired after November 20, 2018 and before 2025) or the reaccelerated incentive (acquired after 2024), as a rental building bought from a seller you deal with at arm's length usually does. The half-year rule doesn’t apply to accelerated investment incentive property (acquired after November 20, 2018 and before 2025, available for use before 2028) or reaccelerated investment incentive property (acquired after 2024, available for use before 2034); small business tax deductions explains these first-year rules. Capital cost allowance (CCA) is optional and is worked out after combining the net income or loss of all your rental properties: it can bring that net rental income down to zero, but it can't create or increase a rental loss. Claiming capital cost allowance on part of your home also affects the principal residence question below.

Losses. A rental loss can be deducted from your other income only if you incurred the expenses to earn income: you can't claim one when you rent to someone you know for less than you'd charge a stranger, when a family member or housemate only shares costs, or when renting part of your home has no reasonable expectation of profit.

Your home and the principal residence exemption

Renting part of the home you live in can change how much of the gain is tax-free when you sell:

Renting out the whole home while you live elsewhere is a change in use; the principal residence exemption guide and principal residence exemption when you partly rented your home cover how the exempt share is worked out.

GST/HST for Airbnb hosts

Short-term stays are not exempt from the GST/HST the way long-term residential rentals are:

Whether you have to register yourself follows the general small-supplier rule:

The CRA notes that a host who registers voluntarily can claim input tax credits for the GST/HST paid on expenses, prorated the same way as the income tax deductions. The GST/HST guide for the self-employed covers registering, filing and input tax credits.

Quebec. Revenu Québec administers the GST and the Quebec sales tax (QST) in Quebec, and the CRA notes that a host whose establishment is in Quebec may also have to register for Quebec’s tax on lodging.

Reporting and records

• Rental income: fill in Form T776 and report the gross and net amounts on lines 12599 and 12600 of your return.
• Business income: fill in Form T2125 and report on lines 13499 and 13500. If you end up owing tax at filing time, the CRA can ask you to pay by instalments in later years; first-time self-employed taxes explains when.
• Records: The CRA says to keep your records for six years from the end of the last tax year they relate to (unless it lets you destroy them earlier), at your Canadian residence or place of business unless it allows another place; you are responsible for them even when a bookkeeper or accountant keeps them, and you must make them available to the CRA on request. For a host, that means each booking’s dates and amount, the payout statements, receipts for every expense, and the floor areas and days you used to split shared costs.

Related guides

• Self-employed taxes hub
• Self-employed tax deductions in Canada
• GST/HST on freelance and self-employed income
• Side hustle taxes in Canada
• How rental income is taxed in Canada
• Principal residence exemption guide