The City of Hamilton is now collecting a new four per cent tax on all short-term rental stays within the city, such as Airbnb bookings.
The new Municipal Accommodation Tax for short-term rentals came into effect on July 1.
The tax was first collected by the city in 2023, but only applied to hotels, motels, inns, lodges, resorts, and bed and breakfasts.
The rollout to short-term rentals was delayed.
Municipalities were given the ability to charge a Municipal Accommodation Tax thanks to 2017 legislation passed by the Government of Ontario.
The funds raised are meant to support local tourism.
Provincial rules stipulate that a minimum of 50 per cent of revenue must go to an “eligible tourism entity.”
The Hamilton Tourism Development Corporation receives 50 per cent of revenue, with the city directly receiving the other 50 per cent.
The city says that the revenue is “reinvested in destination marketing and tourism development initiatives.”
“Policies support investment in further overnight visitations, tourism product development, visitor attraction initiatives, and the hosting of major arts, culture, and sporting festivals, events, and conferences in Hamilton,” reads the city website.
Online booking platforms are currently not collecting the Municipal Accommodation Tax on behalf of Hamilton short-term rental operators, so operators themselves are responsible for collection and compliance.
The Ontario Restaurant, Hotel and Motel Association will collect the tax on behalf of the city from operators, with each property owner automatically registered to a reporting portal.
The Municipal Accommodation Tax is also subject to HST and interest applies to any overdue payment, with unpaid taxes, penalties and interest added to the tax roll and even escalated to a lien against a property if not submitted.
Operators must also retain Municipal Accommodation Tax and accommodation records for seven years and make them available to the City for inspection upon request.
The tax is yet another mandatory requirement placed on short-term rental operators in the City of Hamilton.
In 2024, the city launched a new Short-Term Rental By-law that introduced licensing requirements for all properties and restricted short-term rentals to a person’s primary residence.
Under the by-law, operators must pay a $72.57 one-time registration fee, annual $60 renewal fee, $390 annual license fee if the property is an entire home, and $90 annual license fee if the property is only part of the home.
There are also additional fees, including a tri-annual Certificate of Compliance fee of $320.35, tri-annual Electrical Safety Authority Inspection of $350+, annual Fire Administrative Fee of $37 and one-time Zoning Verification fee of $131 as applicable.
The Short-Term Rental By-law was designed to prevent people from buying up investment properties to operate as short-term rentals and the city said that there would be “full cost recovery” for the program “based on the assumption of approximately 1,250 short-term rentals.”
The city hired 2.25 full-time equivalent staff to administer the program and purchased a vehicle.
However, latest data indicates that there are now only 72 licensed short-term rentals in the entire city – 94 per cent less than expected – meaning that the program is not recovering costs.
City documents say that the program costs an estimated $286,400 every year.
Based in Hamilton, he reaches hundreds of thousands of people monthly on Facebook, Instagram, TikTok, and Twitter. He has been published in The Hamilton Spectator, Stoney Creek News, and Bay Observer. He has also been a segment host with Cable 14 Hamilton. In 2017, he received the Chancellor Full Tuition Scholarship from the University of Ottawa (BA, 2022). He has also received the Governor General’s Academic Medal. He formerly worked in a non-partisan role on Parliament Hill in Ottawa.
