Short-Term Rental Tax in BC

Renting your place out by the night in BC brings in federal income tax, GST, BC's PST and the Municipal and Regional District Tax, and the province's own short-term rental rules. Each has its own thresholds, and missing the provincial rules can now cost you your income tax deductions too.

Income tax: rental income or business income

Everything you earn from accommodation sharing is taxable. The CRA treats it as either rental income from property or self-employment business income, depending on what you provide. If the price covers the space plus basic services like heat, utilities, parking and laundry, it's generally rental income, reported on Form T776 (see our post on rental income tax). If you add meals, cleaning or security, it may be business income, reported on Form T2125 like other self-employed income.

No deductions for a non-compliant rental

For income tax, a short-term rental is a residential property rented or offered for rent for less than 90 consecutive days. For tax years after 2023, you can't deduct expenses for a short-term rental while it's non-compliant. A rental is non-compliant if the province or municipality doesn't allow it at that location, or requires registration, a licence or a permit and you don't meet all of those requirements. BC requires every host to register with the province (more on that below), and many local governments also require a business licence. Under the CRA's definition, falling short on a requirement like that can make your rental non-compliant.

If the rental was non-compliant for only part of the year, the expenses you lose are worked out by days: total short-term rental expenses, times the days it was non-compliant, divided by the days it was a short-term rental. In the CRA's example, a condo with $60,000 of expenses that was unlicensed for 181 of 365 days loses $29,753 of deductions.

For 2024 only, a rental that was compliant by December 31, 2024 is treated as compliant for the whole year. Keep records showing your rental was permitted and properly registered and licensed, because the CRA may audit or review these deductions.

GST on short-term stays

GST applies to short-term accommodation, meaning continuous stays of less than one month. Residential rentals of one month or more are exempt. Generally, once your accommodation-sharing revenue is more than $30,000 over four calendar quarters, you have to register for, collect and remit GST. You can register voluntarily below that to claim input tax credits.

If you're not registered and you book guests through a platform, the accommodation platform operator generally charges and collects the GST on taxable stays (under one month and more than $20 a night). If you are registered, you charge it yourself, including on bookings made through a platform. There's more in our GST filing post.

PST and MRDT

BC charges 8% PST on short-term accommodation, plus up to 3% Municipal and Regional District Tax (MRDT) in participating areas. MRDT applies the same way as the PST, and your PST number doubles as your MRDT number.

This is from the province's accommodation page published May 21, 2026, which has more exemptions and examples. If you do have to register, see our BC PST filing post.

BC's registry and principal residence rule

As of May 1, 2025, every short-term rental host operating in BC has to be registered with the provincial short-term rental registry and show the registration number on their listing. Registration is per unit, renews every year and comes with a fee. If you don't register, your listings come down, existing bookings are cancelled and you can't take new ones.

In many communities, short-term rentals are also limited to the host's principal residence (where you actually live) plus one secondary suite or accessory dwelling unit on the same property. The province's list as of June 1, 2026 includes Esquimalt, Victoria and Saanich. Local bylaws can be stricter, so check with your municipality as well.

How we help

Short-term rental income goes on your personal return. It takes extra work, so it's quoted on top of the base price, and we give you the number before any work starts. We also handle GST and PST filings. If you're filing those every month or quarter, ask about our bookkeeping service.