Burlington considering tax on short-term rentals such as Airbnb

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Published December 4, 2023 at 3:45 pm

burlington mat hotel tex short-term rental accomodations airbnb VRBO

Burlington council is set to receive an update on possible future changes to the city’s existing Municipal Accommodation Tax (MAT), which could include expanding the tax to short-term rental accommodations, such as those advertised on Airbnb and VRBO. 

A staff report that will appear before councillors at two upcoming committee and council meetings says the Burlington Economic Development and Tourism Burlington are “currently examining opportunities to evolve how both organizations support Burlington’s growth” through a number of initiatives.

The report suggests one avenue of growth could be establishing a short-term accommodation (STA) bylaw program. 

Taxes on short-term accommodations are not new. In July 2022, council approved a MAT for stays in hotels and motels to boost tourism efforts in the city. Starting Oct. 1, 2022, guests had to pay an additional four per cent on the price of their visit. 

According to the report, the MAT currently applies to 18 hotels and motels in the city. 

MATs (also known as ‘hotel taxes’) have become more common in Ontario. In 2018, Mississauga implemented the four per cent tax in response to Bill 127, which was passed by the previous provincial government. 

The bill allows municipalities to charge a transient accommodations tax, which a hotel or other short-term accommodation facility will pass onto a guest and then remit to the city.

That same year, Mississauga decided to extend the tax to short-term accommodations. At the end of December 2019, an Airbnb representative told inhalton.com that the company had remitted close to $500,000 to the city

About forty Ontario municipalities are now collecting or are in the process of collecting MAT. Other municipalities include Oakville, Toronto, Vaughan, Waterloo, and Prince Edward County.

At a meeting in March, staff were asked to develop a made-in-Burlington STA-bylaw program and were directed to analyze STA policies in other municipalities. Staff were asked to  establish a community task force to explore a compliance and licensing regime, identify possible zoning requirements and identify “any ongoing resource requirements in the multi-year 2024-2028 budget forecast.” 

The report says a staff-run working group has engaged an external consultant to understand the scope of STAs in Burlington, including how many short-term rentals are currently operating, the revenue they’re generating, the potential MAT revenue available through regulation of the sector, and the resources needed to expand the MAT to STAs.

The report says staff are also working with a consultant to understand tourism trends in the city better. 

The report says 50 per cent of MAT funds have been allocated to the Tourism MAT Reserve Fund and the other 50 per cent to the City MAT Reserve Fund. 

The report says that the MAT has produced $1.5 million in revenue in total. 

A decision about whether or not to expand the MAT to STAs will be made in the future. 

– With files from Jeffrey Allen

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