BC Hotel Tax: Rates, Exemptions, and Who Collects It

A hotel stay in British Columbia is taxed in layers: 8% Provincial Sales Tax, up to 3% Municipal and Regional District Tax in participating communities, an extra 2.5% Major Events MRDT inside the City of Vancouver, and the federal 5% GST on top. In downtown Vancouver that adds up to 18.5% of the room charge. Outside Vancouver in an MRDT community, expect 15% to 16%. In a community with no MRDT, you pay 13%. The same rules cover motels, resorts, bed and breakfasts, and short-term rentals booked on Airbnb or VRBO.¹

What Guests Actually Pay

Three taxes sit on the provincial side and one on the federal side.

PST at 8% applies to short-term accommodation across the province.¹
MRDT of up to 3% applies in participating municipalities and regional districts. Not every community charges it, and rates vary. The Province publishes an interactive map showing which areas participate.¹
The Major Events MRDT adds another 2.5% inside the City of Vancouver, effective February 1, 2023 through January 31, 2030.¹
Federal GST of 5% applies everywhere in Canada, including BC.²

The taxable “purchase price” is not just the nightly rate. It includes the total a guest pays for the right to use the room, which pulls in administration, booking, cleaning, credit card processing, extra bed or crib, extra linen, guest fees, pet fees, and resort fees.¹ A $150 nightly rate with a $75 cleaning fee and a $25 pet fee is taxed on the full $250. GST itself is the only piece excluded from the PST and MRDT base.

Which Stays Are Taxable

The Provincial Sales Tax Act defines taxable accommodation broadly: hotels, motels, resorts, boarding houses, rooming houses, bed and breakfasts, and any “prescribed dwelling.”³ That last category captures vacation homes, cabins, apartments, and platform listings rented for short stays. If someone is paying for a furnished space with working utilities and the stay is under 27 days, it almost certainly qualifies. Whether the space is a dedicated investment property or a spare bedroom does not change the answer, and neither does the booking channel.

When the Tax Doesn’t Apply

Stays of 27 Continuous Days or More

A guest occupying the same unit for 27 continuous days or more is exempt from PST and MRDT. Billing method matters. If you invoice the full 27-day period upfront, no tax applies from day one. If you bill weekly or in shorter intervals, you charge tax on each bill until day 27, then stop. The guest can apply directly to the Ministry for a refund of the tax already paid; the operator cannot process that refund.⁴

The exemption also handles block bookings. If a company holds 40 rooms but only 30 are held continuously for the full 27 days, tax applies to the 10 shorter-held rooms while the other 30 remain exempt. Employees rotating between rooms during the period does not break continuity.

Low-Cost Accommodation

Lodging priced at $30 or less per day, or $210 or less per week, is exempt from PST and MRDT. This exemption does not apply if the accommodation is listed on an online marketplace platform.¹ A $28 budget motel qualifies; a $25 Airbnb listing does not.

First Nations Purchases

First Nations individuals and bands are generally exempt from PST on accommodation purchased on First Nations land for personal use. The buyer must hold a valid Certificate of Indian Status card, and the seller has to verify the photo, record the registration number or band information, and obtain a matching signature on the invoice. Citizens or members of a Modern Treaty Nation remain eligible even if their status card indicates otherwise.⁵

Other Exempt Categories

Industrial camps housing workers in remote locations fall under separate labour-related housing rules rather than the standard accommodation tax framework. Non-profits running hospice or charitable housing may also qualify for relief.

Who Collects the Tax: Platforms or Hosts

If you rent your property through a platform like Airbnb or VRBO, the platform is likely responsible for collecting and remitting PST and MRDT on your behalf. Under BC’s online marketplace facilitator rules, a platform that contracts with hosts, facilitates bookings through its site or app, and processes guest payment must handle the tax.⁶

When the platform handles collection, the individual host generally does not need to register for PST or collect the tax separately.⁷ Two catches. First, if you also take direct bookings outside the platform, you are responsible for collecting and remitting on those stays yourself. Second, a platform that only advertises your listing without processing payment is not a facilitator, so the tax obligation stays with you.⁶

Registering and Filing in BC

You must register to collect and remit PST if you sell taxable accommodation, unless you sell only exempt accommodation or sell exclusively through a marketplace facilitator that handles the tax.⁷ MRDT collected in a participating area is reported on the same return.

Filing runs through eTaxBC, the Province’s online portal.⁸ Paper filing is only available if your business has less than $1.5 million in total Canadian sales and leases in the past 12 months. Above that, electronic filing is mandatory.⁹ Vancouver operators reporting the Major Events MRDT must use eTaxBC regardless of revenue.

Filing frequency tracks how much PST you collect. Operators collecting more than $12,000 annually file monthly. Between $6,000 and $12,000, you can choose monthly or quarterly. Smaller operations may qualify for less frequent reporting. Returns and payment are due by the last day of the month following the end of the reporting period.

Federal GST on Top

The 5% GST applies on top of the provincial taxes.² Operators whose worldwide taxable supplies exceed $30,000 in the last four consecutive calendar quarters, or in any single quarter, must register with the Canada Revenue Agency and collect GST. Below that threshold, you are a small supplier and registration is optional.

Registered operators can claim Input Tax Credits to recover GST paid on eligible business expenses such as maintenance, utilities, professional fees, office supplies, and travel costs. ITCs do not cover personal-use expenses or recreational club memberships.¹⁰ For hosts on digital platforms, the platform may collect GST on your behalf if you are not registered and the platform itself exceeds the $30,000 threshold.

Penalties, Records, and Audits

Late PST returns carry a tiered penalty. A first-time late filing starts at 5% of the unpaid tax plus 1% for each complete month outstanding, up to 12 months. Repeat late filers face 10% plus 2% per month, compounding for up to 20 months. Interest applies on top and compounds monthly. Paying the full assessed amount within 30 days of a Notice of Assessment stops additional interest from accruing.¹¹

Every PST registrant must keep books, records, and supporting documentation for at least five years, and written Ministry permission is needed to destroy anything earlier.¹² A Ministry auditor can enter your business premises during normal hours and request financial statements, ledgers, journals, invoices, bank statements, and electronic records. For accommodation tax, the Ministry can look back three years for tax that was never collected and four years for tax that was collected but not remitted. There is no time limit in cases of fraud or wilful non-payment.¹³

The Principal Residence Rule Is a Separate Question

Collecting the right tax does not settle whether you are allowed to operate. As of June 1, 2026, BC’s principal residence requirement applies in over 100 communities including Vancouver, Victoria, Kelowna, Nanaimo, and Kamloops. In these areas, short-term rentals can only run from the place you actually live, plus one secondary suite or accessory dwelling unit on the same property. Bed and breakfasts remain permitted where the owner lives on-site. Local governments can impose stricter rules, and a community with a rental vacancy rate of 3% or higher for two consecutive years can apply to opt out.¹⁴ Confirm the rules for the specific community before buying a property intended for short-term rental income.

1
Province of British Columbia. Accommodation
2
Canada.ca. Charge and Collect the GST/HST
3
BC Laws. Provincial Sales Tax Act
4
Ministry of Finance. Provincial Sales Tax Bulletin Accommodation
5
Province of British Columbia. PST on Sales to First Nations
6
Government of British Columbia. Online Marketplace Facilitators and Sellers, and Online Marketplace Services
7
Province of British Columbia. Register to Collect PST
8
Province of British Columbia. Report and Pay PST Using eTaxBC
9
Province of British Columbia. Report and Pay PST Through Mail or Courier
10
Canada.ca. Input Tax Credits
11
Government of British Columbia. CTB 005 – Penalties and Interest
12
Province of British Columbia. Small Business Guide to PST
13
Government of British Columbia. Understanding Your Consumer Tax Audit
14
Province of British Columbia. BC’s Short-Term Rental Principal Residence Requirement