Airbnb and Quebec’s government have struck a deal in which Airbnb will be allowed to operate legally while remitting a “tourist tax” on short term rentals, on behalf of its hosts. Representatives from the home sharing platform and the provincial government sealed the deal at a conference in Montreal on Tuesday.
The agreement, which will go into effect on Oct. 1, stipulates that Airbnb will automatically collect and remit the 3.5 per cent tax. A provincial law had already gone into effect last year requiring hosts to obtain a permit and pay a hotel tax, but most of Airbnb’s hosts had failed to register with the regulating party.
According to tourism minister Julie Boulet, these new measures are a positive step for the tourism industry in the province, since it will allow Quebec to collaborate in the digital sharing economy while benefiting from the additional revenues. This measures are in line with a rapidly expanding hospitality and travel industries.
“The government has the obligation to adjust, to adapt to this new reality and bring about changes to attain two objectives: to have competition that is fair and just for all partners and the second, to respect the laws that govern Quebec,” said Boulet at a news conference.
The new legislation will also calm complaints from the hotel industry in respect to Airbnb operating without paying a lodging tax.
The landmark agreement has been called a “defining moment for Airbnb in Canada” by Airbnb’s public policy manager. It is an example of how digital companies can work in tandem with Quebec’s government to reach an equitable solution.
There are currently more than 22,000 Airbnb hosts operating in Quebec, renting their homes out at an average of 28 nights per year and collecting $2600. This means that in 2016, Quebec would have collected an additional $3.7 million in taxes, should the agreement have already been in place.
“We have to make a distinction: draw a line between what the sharing economy is and what is a business,” says Boulet.