October 1 is the big day for short-term rentals in BC, but do you know your PST from your MRDT, and whether you need to be charging it? Matthew Hick, CEO of Allura Direct, breaks it down.
1. Do you need to be charging tax?
Yes, all legally-operated short-term rentals in BC are required to charge the PST and MRDT where applicable. Reservations 27 nights or longer are exempt.
2. What are the two different taxes?
Provincial Sales Tax (PST) is charged at eight per cent for accommodation. Municipal and Regional District Tax (MRDT), varies, but in the Whistler area, it is currently two per cent.
3. What's happening with the exemption for fewer than four units?
It's gone, as of October 1. All short-term rentals will need to charge PST and MRDT where applicable, unless you let only exempt accommodation.
4. Who needs to register for a PST number?
It depends on the source of your guests. If they come from websites that automatically collect and remit the tax on your behalf, such as alluraDirect, there's no need to register. People who advertise their property themselves or use websites that are not automatically collecting, must register for a PST number, collect, and remit the correct tax themselves.
5. What options exist for owners of vacation rental properties?
Online accommodation platforms that are BC based like alluraDirect are registered to collect and remit PST and MRDT on your behalf, which will save the hassle of registering for a PST number directly with the Government.
"We only list legally zoned properties that allow for short-term rentals. All allura clients have their tourist accommodation business license from the RMOW covered, a requirement for everyone who rents out their property," says Hick.
6. What happens to people who don't charge the tax correctly?
"The tax has to be paid, so if you charge your guests incorrectly, it comes out of your pocket," says Hick. "That's why we're so keen to ensure that people in Whistler are clear about the new requirements before they come into effect. We are active in Whistler and genuinely care about the community," he says. "Ultimately, this tax change levels the playing field with other accommodation options in Whistler – this will be a progressive step forward."