Earlier this year, the Province of British Columbia brought into force new rules that impacted short-term rental units. Their intended goal was to make more units available to individuals seeking long-term rentals to live in, rather than a place to stay for a few nights. This impacted many Airbnb hosts and others who rent out their extra property space to travelling guests.
It is certainly not news to anyone that the Province, especially the Okanagan, suffers from a housing shortage when it comes to affordable long-term rentals. The Province’s goal was to make more properties available as long-term residential options for renters who live and work in the Okanagan.
However, this change in use from a short-term rental to a long-term rental, or a potential sale of a property used as a short-term rental, has created all sorts of tax issues for owners and sellers. GST may be applicable when you sell a short-term rental property, AND GST may also apply due to a change in the use of the property (short-term rental use to long-term rental use).
Consulting a lawyer and an accountant when it comes time to sell or convert your use of these properties is hugely important, as the tax issues are vast, and the penalties are heavy.
For more information regarding real estate matters or estate planning, and to discuss your specific circumstances, please contact Vanessa DeDominicis on 250-869-1140 or [email protected]. Vanessa practices in the area of Real Estate and Wills & Estates at Pushor Mitchell LLP in Kelowna and would be more than happy to assist you.
