How is short-term rental income taxed in BC?

In BC, short-term rental income from a platform like Airbnb is reported on your tax return, usually on Form T776 as rental income, or on Form T2125 if you provide extra services such as meals or cleaning. GST generally applies to stays of less than one month, collected by you if you are registered or by the booking platform on its bookings if you are not, PST of 8% and a municipal and regional district tax of up to 3% generally apply to stays under 27 days, and since 2024 the federal government denies expense deductions for rentals that break provincial or local rules.

Updated October 29, 2026. Figures from the CRA and BC Government pages linked below.

Reporting the income

Form T776: if you rent space and provide only basic services such as heat, utilities, parking and laundry facilities, the CRA generally treats the income as rental income.
Form T2125: if you also provide services such as meals, security or cleaning, the income may be self-employment business income. The more services you offer, the more likely it is business income.

GST/HST on short-term stays

What is taxable: short-term accommodation is a rental with continuous occupancy of less than one month. Rentals of one month or more are exempt.
The $30,000 threshold: generally, if you earn more than $30,000 in gross revenue over four calendar quarters from accommodation sharing, you must register for, collect and remit GST/HST. You may register voluntarily below that.
Platform operator rules: a registered host keeps charging and collecting tax, including on platform bookings. If the host is not registered, the accommodation platform operator must collect the tax on bookings it facilitates. The CRA rules cover accommodation over $20 per night.

BC PST and MRDT

Rates: PST of 8% applies to short-term accommodation in BC, and the municipal and regional district tax (MRDT) of up to 3% applies in participating areas, with the rate set locally.
Length of stay: PST generally applies to stays under 27 days. Stays of 27 days or more with the same person are exempt.
Online marketplaces: if you sell only through a marketplace facilitator, the facilitator collects and remits PST and MRDT and you do not need to register. If you also take direct bookings, you must register.

The federal rule for non-compliant rentals

What it does: for tax years after 2023, income tax deductions are denied for short-term rentals that are non-compliant.
Short-term rental: a residential property rented or offered for rent for less than 90 consecutive days.
Non-compliant: located where short-term rentals are not permitted, or not meeting all provincial or municipal registration, licensing and permit requirements.
Part-year: the denied share equals total expenses multiplied by non-compliant days divided by short-term rental days.

BC's principal residence requirement

The rule: under the Short-Term Rental Accommodations Act, hosts in covered communities may offer short-term rentals only in their principal residence plus one secondary suite or accessory dwelling unit on the same property.
Okanagan status: on the province's list as of June 1, 2026, Kelowna and West Kelowna are exempt from the requirement, while Penticton, Vernon and Lake Country are subject to it. Local bylaws can be stricter.
Provincial registry: registration is required for stays under 90 consecutive days, with an annual fee of $100 for a host's principal residence or $450 for a secondary unit.

Worked examples (estimates for illustration)

One night in a BC community with a 3% MRDT, booked through a platform: nightly rate $200. GST $200 x 5% = $10. PST $200 x 8% = $16. MRDT $200 x 3% = $6. Total taxes $32, guest pays $232.
Penticton condo, non-compliant for part of the year: 300 short-term rental days, 100 of them non-compliant, expenses $18,000. Denied: $18,000 x 100 / 300 = $6,000. Deductible: $18,000 - $6,000 = $12,000.
Kelowna home with a basement suite: annual provincial registry fees: $100 for the principal residence plus $450 for the suite = $550, plus any city licence.
West Kelowna host crossing the GST threshold: $14,000 in the first two quarters and $17,500 in the next two = $31,500 over four quarters, which is above $30,000, so registration is generally required.

FAQ

Do I pay tax on Airbnb income in BC?
Yes. All rental income is reported on your return, and sales taxes may apply depending on length of stay and how you take bookings.

Is Kelowna covered by the principal residence requirement?
As of the June 1, 2026 list, Kelowna is exempt, but provincial registration and city rules still apply.

Who collects GST if I am not registered?
The accommodation platform operator collects it on bookings it facilitates for unregistered hosts.

Every situation is different, so talk to your accountant about your specifics.

Sources: CRA: Sharing economy; CRA: Platform-based short-term accommodation; CRA: Changes to rules for deductions from short-term rental income; BC Government: PST on accommodation; BC Government: Short-term rental principal residence requirement.

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