Whereas a dwelling unit or secondary dwelling unit located on the same property that is used as a commercial enterprise for short term rentals and does not serve as the primary residence for the owner, or other person. And whereas tourist overnight accommodation uses such as motels, hotels, BnBs with four sleeping units or greater, and resorts are classed and taxed as businesses; Therefore be it resolved that UBCM ask the Province to assign a dwelling unit or secondary dwelling unit located on the same property, offered and used as a whole for short term rentals for 50 percent or more in the calendar year, to the appropriate tax class and be redefined as Class 6: Business and Other; And be it further resolved that where the dwelling unit or secondary dwelling unit located on the same property is also used for a residential purpose, that this assignment be in respect to the total percentage of the property used for commercial Class 6: Business and Other purposes.
Ministry of Finance, Ministry of Municipal Affairs and Ministry of Attorney General and Minister Responsible for Housing The Ministries understand that short-term rentals STRs may have a negative impact on long-term rental accommodation in some communities, and note that split-classification of STRs has been the subject of several UBCM resolutions in recent years. While the proposal to classify STRs as Class 6 Business and Other has some merit from a tax fairness perspective, it could have some undesirable effects and would be very costly to implement. Therefore, while this proposal has been considered, at this point there are no plans to implement split classification of STRs. It would be very costly and time-consuming for BC Assessment BCA to develop a process to identify and classify STRs as commercial units, which would require inspection or self-declaration or a combination of the two. Government would also need to select the criteria for applying the split classification to units that are only rented occasionally, amend the Assessment Act and its regulations, and work out the property tax implications on a provincial basis. The Province has taken other steps to ensure owners and operators of STRs are paying their fair share of taxes. The Ministry of Finance negotiated with Airbnb for the platform to collect and remit provincial taxes on behalf of hosts. Additionally, strata corporations can now fine owners or residents who are not complying with a stratas STR bylaw up to 1,000 a day. In 2019, the Province and UBCM established a Short-Term Rentals Advisory Group with local government and provincial representatives to facilitate discussion about the impacts of STRs and tools for addressing them. Meetings of the Advisory Group were paused due to the pandemic but are expected to resume in the future. The COVID-19 pandemic has affected the demand for short-term rentals in some BC communities. It is anticipated that the province will gradually re-open to tourism and the demand for accommodation will return, raising the question for some local governments of how to regulate STRs to mitigate impacts on their communities. The Province will continue to work with local governments and BCA to address concerns regarding the assessment and taxation of STRs.