City surprised by Airbnb tax
Trevor Nichols - Feb 13 - Biz Releases

Image: Twitter

A recently announced tax on Airbnb rentals in British Columbia came as a complete surprise to the City of Kelowna, and city planners are still trying to calculate its potential impact.

Last week, the provincial government said it plans to pass a law allowing Airbnb to collect, on the government’s behalf, an 11 per cent tax on every B.C. rental booked through the site.

Eight per cent of the revenue will go to the province to address “housing affordability,” while the remaining three per cent will be given to local governments.

Doug Gilchrist, a community planning director with the City of Kelowna, said the news came as a complete surprise to him and his staff.

“We didn’t know this was coming from the province, so we’ve been playing a little bit of catch up,” he said.

Gilchrist added that the provincial government hasn’t given out much information on the specifics of the new tax, which means it’s hard to say exactly what it might mean for both the city and Airbnb operators.

He said he couldn’t even begin to guess the kind of money the city’s cut of the tax will translate to because the city doesn’t yet have a handle on how many operators there are here.

“It seems like a simple thing, to get the number from the website, but the numbers are a little bit elusive,” he said.

For starters, Gilchrist said many operators that advertise Kelowna accommodations aren’t actually in the city. Others only advertise with Airbnb’s competitors, which the new tax doesn’t cover.

Then there are the operators that advertise multiple units, creating the potential to be double or even triple-counted.

Even if the city could pin down an accurate number, Gilchrist says they would still need to know what operators charge, how many nights they rent for, and how full they are, before they could arrive at an educated guess.

What is clear, Gilchrist says,  is that the tax will mean new revenue for the city.

“From our perspective, there may be an opportunity to use that tax revenue for some council priorities in our community, (but) I don’t know how much that will be, or if there will be limitations on how it can be used.”

Right now it is only legal to operate overnight accommodations in a few specific places in Kelowna. Gilchrist said that, although anyone operating outside of those areas is breaking the rules, their guests will still pay the taxes.

He said city planners are right now “wrestling” with how to regulate and police nightly accommodations in Kelowna, and plan to make recommendations to council within six months.

He pointed out that the statistics that come along with the province’s new tax will do a lot to illuminate the nightly accommodation landscape in the city, making it easier for planners to craft these kinds of policies.

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