Airbnb Taxes Every Host Should Know

Рет қаралды 15,783

2 жыл бұрын

Are you an Airbnb host wondering about your taxes? Are you considering selling it? Or simply want to know the tax implications associated with it? Many of my clients have the same concern about their investment properties as a short-term Airbnb host.
In today's video, I will not only share what the tax implications are but how they are different when you own your personal name vs corporation. I also talk about the tax implications of selling your Airbnb rental!
If you have any questions or thoughts after watching this video, leave a comment below, and I’ll respond as soon as possible.
#RealEstateTaxTips #RealEstateInvestors #CanadianInvesting #realestateinvesting #hst #extraincome #taxproblems #incometax #sidehustle #corporation #taxman #taxtips #secondstreamincome #multipleincome #rentalincome #rentalincometaxes
Don’t forget to subscribe to my channel for more videos on Canadian real estate and tax-saving strategies, so you don’t miss a thing!
SUBSCRIBE TO OUR MAILING LIST AND CHECK OUT OUR BLOG: realestatetaxtips.ca/youtube
So you’ll receive weekly tax tips and free real estate investment resources.
Want to PAY LESS TAX as a real estate investor? Get this FREE guide: www.therealestateaccountants....
FOLLOW ME ON SOCIAL MEDIA:
Facebook: / realestatetaxtips
Instagram: / realestatetaxtips
DISCLAIMER:
Tax planning is a personalized decision and will depend on your situation, priorities, and risk tolerance. Consult with your own legal and tax advisors to ensure you get the best advice personalized for you.
The information contained in this video is for general information purposes only.
The information is provided by ECRB Consulting Inc., RealEstateTaxTips.ca, Cherry Chan Professional Corporation and Cherry Chan.
While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability to the article or the information, products, services, or related graphics contained on the presentation for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage, including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of or connected with the use of this information.

Пікірлер: 86

@InvistanoExteriorcomEricoSouza 2 жыл бұрын

The best video I listen on this subject so far! Congrats. I just called you and I will book a consultation. It is just a pity, you don't take clients from Quebec....

@RealEstateTaxTips 2 жыл бұрын

Thank you! Unfortunately, at the moment we don't. But do stay tuned, you never know we may be taking them on in the near future :D

@badiro5956 Жыл бұрын

Hey Cherry. As an accountant (CPA in progress), I have to admit that it's a true pleasure to listen to you explain these concepts, otherwise complicated. The world needs more accountants like you. Would you please tell us more about a "strong documentation as to why the short term rental is providing services similar as a Hotel would provide"? What type of documentation? And should we send the documentation to CRA when we file the first T2? Again, you're a gem. Thanks a LOT

@RealEstateTaxTips Жыл бұрын

Strong documentation would include the type of services that you offer at your Airbnb. And you don't need to send it to CRA, unless they ask you for it

@dianejesso3088 Жыл бұрын

Great information!

@coreywytinck93schannel-xx5hm 11 ай бұрын

Great video, thank you!

@RealEstateTaxTips 11 ай бұрын

Glad you liked it!

@wellandstock 2 ай бұрын

Thank you and like your video Cherry. Is any way to minimize HST when sell STR property? Does that time based calculation help to avoid/reduce HST if I occupy as personal residential longer than STR, what is the considerable percentage?

@MariamMariam-ue7vz 2 жыл бұрын

Thank you helpful video! For someone hosting their basement apartment out of their principle residence on AirBnb, will this cause the entire property to be deemed commercial and subject to HST when sold? Or might only the portion of the home rented on AirBnb be deemed commercial and thus only that percentage be subjected to the HST when sold? Or does the government never consider that a principle residence can be turned into a commercial property, even if a portion is rented on a STR platform? Particulars to my situation: -Total AirBnb income from the basement apt will be less than $30k per year. -80% of reservations are under 30 days. -Basement apartment contains 1 bedroom out of 4 bedroom home. -I have not registered for a GST number. -Property was purchased as resale residential. -Occupancy rate is ~90%

@RealEstateTaxTips 2 жыл бұрын

Hi Mariam! Thanks for reaching out and being here. For such specific situations, I always advise to sit with your personalized real estate tax accountant. For any questions or consultation, feel free to contact our office at 416-548-4228 or email us at admin@cccpa.ca.

@bj96er 10 ай бұрын

These videos are extremely helpful. Do you have any content that describes how depreciating the house works for when operating a vacation rental? I have been looking but have not come across this yet.

@RealEstateTaxTips 10 ай бұрын

The way the house gets depreciated is the same regardless of the use, you can however claim CCA for the assets inside the house used to generate income and given that they will likely see more wear and tear you can expect to be replacing them on a more frequent basis than the furniture and fixtures in your own home.

@annswallow2247 2 жыл бұрын

Great content, Cherry. What is the best way to get hold of you? I am helping my partner set up his home in NB to STR. We need to know the best tax set up for him. We also need an accountant to do our taxes for the flip we did in 2021. Thanks, Ann

@RealEstateTaxTips 2 жыл бұрын

Easiest is to contact our office at admin@cccpa.ca or call us at 416-548-4228. Thank you so much for considering us.

@deejay9520 2 жыл бұрын

Informative video. I’m thinking about purchasing a property in Ontario to list on Airbnb but with minimum rentals of over 30 days. In this case would I be exempt from having to charge HST even though the annual income is greater than $30K?

@RealEstateTaxTips 2 жыл бұрын

If rental is over 30 days you are exempted.

@thisisahbu Жыл бұрын

Hello Cherry, thanks so much for this video. You have explained it really well. Got a question on reporting expenses. Let say I intended to rent 179 days of the year of my cottage as short term rental and only been able to rent it out for 100 days. When I report the expenses (let say mortgage interest), do I report - 0/365 - cannot claim - 100/365 - the number of days rented out? - 179/365 - the number of days I intended to rent out? - 365/365 - the entire amount? Much appreciated

@RealEstateTaxTips Жыл бұрын

It really goes back to your risk tolerance level and your documentation. Technically speaking, available for rent days can be used for calculation BUT there're many factors that would affect it as well - is this a cottage? Is it an airbnb? How strong your documentation is supporting the available for rent period? Are you reporting a huge loss?

@derekchan3289 Жыл бұрын

Excellent video. Unfortunately I have had to do a lot of self assessments in the past. Could you comment from a Capital Gains perspective if the adjusted cost basis is now based on the self assessment value?

@RealEstateTaxTips Жыл бұрын

When you are talking about ACB, I'm assuming that you're referring to ACB that you would use to calculate the capital gain, and unfortunately the answer is that the ACB is based on the actual cost incurred.

@royyabut5386 Жыл бұрын

Hello Cherry, very informative, question though if the property is only use 6 months for Airbnb and 6 months for personal use am I exempted in paying the HST when I sell the property? Thanks, Roy

@YoutuberJeremy Жыл бұрын

I’m also wondering this, but the entire time I will live there too

@mm-gj1my 10 ай бұрын

Hi Cherry, very helpful video! If renovating the basement of primary residence for short-term rental, can CCA be claimed on those renovation capital expenses? What are the implications when selling the primary home?

@RealEstateTaxTips 10 ай бұрын

I would recommend you schedule a call with my team to explore more in depth why this is something to be avoided.

@andraebrown5565 Жыл бұрын

Hi Cherry, Love the content!! If the landlord allows for Airbnb arbitrage meaning from the landlords perspective they have a long term lease with the Airbnb operator, will the owner(landlord) still be subject to HST on the sale of the home?

@RealEstateTaxTips Жыл бұрын

Well, arguably if the landlord knows that the property will be used for short-term rental (majority of the leases are less than 30 days), then technically the landlord should be charging HST on the rent. If he/she did not charge, the responsibility would be on him. It is a grey area if the landlord truly doesn't know.

@jh910101 2 жыл бұрын

Hi Cherry, love your videos! Just a quick question. If I made a mistake of claiming CCA on my principal residence where I operate Airbnb (1/3 of sqft), am I able to reverse it simply by refiling? I'm concerned that I would lose PRE because of this such a minimal CCA claim..

@RealEstateTaxTips 2 жыл бұрын

Hi Jake, thanks for reaching out! Unfortunately this isn't the right platform where I would be able to advise you about your personalized situation. For any questions or consultation, please contact our office at 416-548-4228 or email us at admin@cccpa.ca and we will be sure to take care of you. Thanks!

@jh910101 2 жыл бұрын

@@RealEstateTaxTips Thank you. I did email however no one got back to me. I emailed twice and called a couple times as well, so not sure how else I would contact.

@markting377 11 ай бұрын

thanks for the info Cherry-- if I rent out two rooms in my primary residence on aribnb/VRBO-- I understand the income is fully taxable but can I write off my expenses (% of internet, property tax, mortgage cost, cleaning, utlities, supplies etc)-- so that only the net income is taxed? thanks in advance.

@RealEstateTaxTips 10 ай бұрын

Yes, exactly. You may want to schedule a call with my team to answer specific questions you may have.

@chloeg1653 2 жыл бұрын

If your commercial activity income is less than $30k a year would HST be applicable upon sale of the house (or conversion back to LTR)? Also if you have a mix of longer than 30day stays and shorter than 30 day stays would HST only be applicable to the stays shorter than 30 days?

@RealEstateTaxTips 2 жыл бұрын

$30K or not, if your property is used mostly for STR, you're still subject to HST on sale of the property or converting it back to long term rental. HST would only be applicable for short term rental less than 30 days.

@bigworld3025 2 жыл бұрын

If I use the basement of my primary home (less than 50 % of the entire sq ft) as STR, is the property still considered as commercial? and does the HST still apply?

@RealEstateTaxTips 2 жыл бұрын

Rental income is still considered subject to HST if your income from all commercial activities is more than $30K or if you are already a HST registrant. Whether or not the basement would be subject to HST when you sell your home is a question of specific fact and difficult to judge based on your comment.

@rubansiva5413 2 жыл бұрын

Great content. Is it best way to create a holding company to hold the asset then lease to operating company. This way avoid the HST on sale?

@RealEstateTaxTips 2 жыл бұрын

Practically speaking, CRA can look pass the corporate ownership and still charge you HST on sale of property.

@kenlindakl432 2 жыл бұрын

Capital Cost Allowance for Kyacks, Paddle Boards, Furniture etc... does a half year rule apply or full rate @ 20% -- is it the full amt off CCA or only the amount of days rented with CCA - Thank you

@RealEstateTaxTips 2 жыл бұрын

Sounds like you got quite a few questions here... If you are offering kayaks, paddleboards, furnitures, etc. as your Airbnb AND your Airbnb is exclusively used to generate income, then the FULL amount can be added as part of capital assets and you can claim 20% full rate until 2023. (Our government has allowed us to claim the full amount under the accelerated investment incentive program for asset available for use until 2023). On the other hand, if you are renting out your personal cottage occasionally and you use the cottage on a regular basis, only the business use of the kayaks, paddleboards, and furniture would be tax deductible. Allocation based on the # of days rented is a reasonable basis. Be sure to ask a professional accountant when you file your returns. Feel free to reach out to our office if you are not currently working with one. :)

@samiagha3155 2 жыл бұрын

Hi Cherry, Great content, i purchase my house in 2017 in Alberta, from February 2022 i put one room in basement including bath on Airbnb under my wife’s name, she has no income, she is a house wife now Airbnb is asking me to submit canada tax id, which i believe is her SIN #, when i try to fill the tax information it is asking me for HST, GST or QST id which one should i put and from where can i get those id? Whatever we are charging for room, it will never exceed more then $20000 a year, do i have to worry about anything when i will sell my property? That part was confusing i didn’t get it, please help me with that, Thank you

@RealEstateTaxTips 2 жыл бұрын

Hi Sami, Thanks for reaching out and being here. For such specific situations, I always advise to sit with your personalized real estate tax accountant. For any questions or consultation, feel free to contact our office at 416-548-4228 or email us at admin@cccpa.ca.

@kapasound Жыл бұрын

Thank you for the video and great tips. Can you please elaborate on the new build home and HST exemption. I purchased a new home and paid the full HST. Do you mean I can get a refund of the HST I paid since this will be a short-term rental? 😊

@RealEstateTaxTips Жыл бұрын

Yes if you consistently use your property for commercial purpose (short-term rental), you can claim the HST you paid as input tax credit. However, when you sell, you also need to charge HST (or include HST as part of your selling price).

@wuanthonykh 4 ай бұрын

Hi, for my primary residence , if I Airbnb out the entire unit for 180 days , does it make my place no longer a “primary residence” and it becomes an investment property ? I.E when I sell my unit I have to pay capital gain tax

@myway8950 3 ай бұрын

How does airbnb tax work with just a room in my home? I earned 3k last year do i nred GST HST ID?

@shobhitbansal3628 2 жыл бұрын

Great content cherry, do you take clients from Quebec as well?

@RealEstateTaxTips 2 жыл бұрын

Hi Shobhit! Unfortunately, at the moment we dont. But you can stay tuned and hopefully in the near future we will! :D

@amytran6020 Жыл бұрын

Hi Cherry. I have 3 airbnbs. one just started. i just registered Hst #. all is mixed with long and short term. mostly longer then 1 month. are we allow to use same hst # for all 3 properties? if i start collecting HST for all properties, one is a basement apartment in my primary, did i turn all properties into a business, and will i incure Hst if i sell? l had always reported airbnb income as rental income

@RealEstateTaxTips Жыл бұрын

It is sadly a very difficult situation. You don't need multiple HST numbers - just need one for all three properties. As for your PR basement, it really goes back to the % rented, etc. and may not be converting it to a commercial property because you use it for your own use primarily. If it is longer than 1 month no need to charge HST. If you need more guidance, feel free to speak to our team at admin@cccpa.ca or 416-548-4228

@nilofervora4550 Жыл бұрын

Hi Cherry, how would we go about setting upba structureif we operate airbnb arbitrage in states as a canadian resident so that we dont pay taxes twice.

@RealEstateTaxTips Жыл бұрын

Excellent question you asked. Canada and the United States have one of the most extensive Tax Treaty's in existence, you will receive a Foreign Tax Credit (FTC) for any taxes paid in the US sourced income and reported on your Canadian Tax Return. There are some exceptions to this provision and I would recommend you discuss with a Cross Border Tax Specialist.

@judyrevoy9956 2 жыл бұрын

If you own a property in Mexico and rent on Airbnb make less then $30,000 CAD, can you be exempt from HST? Do you have to get a HST number?

@RealEstateTaxTips 2 жыл бұрын

Property in Mexico is not subject to HST at all.

@saveriochimenti6227 Жыл бұрын

Regarding rental arbitrage. If the property is leased long term to someone who uses it as a STR is HTS payable if the landlord sold it. The landlord has leased it long term but the tenant is renting it out short term?

@RealEstateTaxTips Жыл бұрын

Based on the research I had done previously, the landlord can be liable for the HST. But again, it is fact specific. There're only so many prior court cases out there that we can refer back to. And it is case and fact specific as well.

@user-vz5sp1yc7d 5 ай бұрын

I started an airbnb in 2023. The entire appartement is used for short term rentals. I moved some of the furnitures from my home to the Apartment. I also bought some furnitures from market place or flea markets so I don’t have any receipts. Can I still claim for tax return as my expenses.? Thank you in advance

@RealEstateTaxTips 5 ай бұрын

In Canada, you gotta earn your deduction. Keep the receipts and keep documentation. If you don't have receipts and documentation, CRA can easily deem the expense as non-deductible unfortunately.

@icaremusic1 6 ай бұрын

Hi what if a Canadians owned airbnb in USA? The rental loss in this airbnb of usa can offset the income in canada?

@RealEstateTaxTips 6 ай бұрын

Potentially - depending on the structure that you use to own properties in the US. Some structure would allow that, and some others wouldn't.

@janetmeloche2729 Жыл бұрын

In Ontario what if I’ve made my attached garage into a separate 1 bedroom tiny apartment? How do I set up for this business expecting it to be under $30,000 also how do I write off $50,000 for renovations?

@RealEstateTaxTips Жыл бұрын

You might have a bigger problem given the HST implication of creating a new unit and being used as residential rental...best to consult with an accountant that knows this area of taxes...

@YoutuberJeremy Жыл бұрын

I want to air bnb my extra bedroom for 6 months (max 28 days each booking) then stop. What if I Live in my primary residence, and rent one bedroom as I still live in the condo ? I don’t mind paying taxes on income or collecting hst. When I sell my condo will I pay capital gains even tho I live in it ? Even if I only air bnb ? It’s still personal use, but 20% of it is used one bedroom? When you say convert it.. do I need to convert is before I start ? Jan 1 fmw 450k August 30 fmw 430k Do I pay capital gains , for the 6 months, 20% ??

@RealEstateTaxTips Жыл бұрын

Sounds like you are asking a very specific question, much easier if you schedule a one on one consultation with our team and they can answer this question face to face. Feel free to reach out to us at admin@cccpa.ca or call us at 416-548-4228

@YoutuberJeremy Жыл бұрын

@@RealEstateTaxTips found answered else where ty tho

@randomtime6308 Жыл бұрын

@@KZfaqrJeremy What was the solution to your question?

@YoutuberJeremy Жыл бұрын

@@randomtime6308 haha i just started 10 days ago!! I'm airbnb two roomes, i live in one! shared kitchen and shared home. I didn't make changes for commercial use - kinda like a room mate. income is taxable! no capital gains

@randomtime6308 Жыл бұрын

@@KZfaqrJeremy thanks!

@syim8311 2 жыл бұрын

Great video Cherry. Thanks. Question: Will HST be applied to the entire property of a commercial residential mix property when sold if the residential portion was used as active income, specifically not short-term rental (i.e., more than 30 days), but will hotel-like services provided? I believe HST is normally only applicable to the commercial portion otherwise. Is this correct?

@syim8311 2 жыл бұрын

I forgot to mention that the mix property would be in a corporation.

@RealEstateTaxTips 2 жыл бұрын

Hi there! Thanks for reaching out! I always advise my clients that every individuals situation is unique. For any questions or consultation, it is best to sit with your advisor ir contact our office at 416-548-4228 or email us at admin@cccpa.ca to book an appointment. Thank you!

@AhmedAli-os2kp 2 жыл бұрын

Hi cherry is it true that you can write off your mortgage for primary residence if you refinance your primary residence home and invest the money in buying rental properties?

@RealEstateTaxTips 2 жыл бұрын

You can watch this video kzfaq.info/get/bejne/m8uJZqhmucyXfZs.html and find out the tax implication. Generally speaking, it is true that you can deduct the interest related to the portion you use for financing the purchase of your rental property in Canada. However, you gotta make sure that you have proper documentation and proper flow of cash to keep the interest deductible.

@AhmedAli-os2kp 2 жыл бұрын

@@RealEstateTaxTips thank a million.so basically I can write off the interest on the refinanced amount not the whole mortgage amount.

@Veronica-tk9rl Жыл бұрын

this is called the smith maneuver. look it up and watch more videos on the subject.

@chachicorbella4961 9 ай бұрын

Great Information. This year I am going to surpass the 30K mark. What exactly should I do? Do I have any option to avoid registering for HST? Do you take clients ? I am in Toronto

@RealEstateTaxTips 9 ай бұрын

Hi , please contact us at realestatetaxtips.ca/contact-us/ and we can help you with what you need. Thanks!

@lakhvirsingh-fl1fw 2 жыл бұрын

Thanks for such useful information. A quick question though, if I sublease my apartment to someone through Airbnb for a profit then how do I report the income generated from that? and will my rent be considered a tax deduction?

@RealEstateTaxTips 2 жыл бұрын

I would report the income and also claim the portion of rent you incur during the rental period.

@ahsanmemon6517 Жыл бұрын

Hi there..can you please comment on a scenario where you earn airbnb income from your principal residence i.e. renting apartment when travelling..how to report this income?

@RealEstateTaxTips Жыл бұрын

It gets a bit complicated...depends on how much you've rented vs. how much your personal use would be, and how much rent you've received... it could potentially jeopardize your primary residence exemption...

@ahsanmemon6517 Жыл бұрын

@@RealEstateTaxTips yeah..i agree .i rented my entire apartment for 44 days in total ( i was traveling)..rest of the time it was my personal use..i made 12000 for those 44 days

@RealEstateTaxTips Жыл бұрын

@@ahsanmemon6517 must have been a super nice house. Make sure you consult with someone who knows real estate taxes for your reporting and make sure you stay on the right side of CRA.

@PRADEEPPATEL-hx1pe 2 жыл бұрын

Very useful information. what if we have 2 Properties. ( in multiple family member`s name ) long term rental income from one property ( where we don't charge HST on it.) and on our second property we are operating as short term rentals. Should we have to pay HST on both income?

@RealEstateTaxTips 2 жыл бұрын

HST is only applicable on short-term rental under 30 days...

@reallyreallygreatguy Жыл бұрын

I reached out to chat with Cherry, it turned out to be a huge waste of my time. Cherry was inaccessible, when I reached out to her office, there's no option to chat with cherry, instead I got a consultation by someone with 0 useful information, I think I knew more than he did, huge waste of time. One bit of credit I'll give is I got a refund for my time wasted.

@RealEstateTaxTips Жыл бұрын

Hi Max, thanks for taking the time providing your feedback. We understand that we are not a good fit for everyone and we fully respect that. Our team has been providing valuable information to many real estate investors, experienced and brand new. Many of them are licensed accountants themselves. It sounds like you’re extremely knowledgeable and doesn’t really need our service to begin with. We wish you all the best. Cherry