Development Matters: The vacation rental story, part three

A fair playing field. It's what Revelstoke hoteliers are looking for, but how do you ensure that happens?

The rise of AirBnB is presenting challenges for communities around the world

The rise of AirBnB is presenting challenges for communities around the world

Last month, Chris Lehane, AirBnB’s head of global policy, showed up at United States Conference of Mayors and told the hundreds of heads of municipal government that if they passed new tax laws on vacation rentals, AirBnB would collect them. “Read my lips: we want to pay taxes,” Lehane told them.

In fact, AirBnB is already collecting taxes on behalf of several jurisdictions around the world including Amsterdam, Chamonix, Washington DC, Florida, Chicago and others.

The tax issue is one of the concerns that have been raised throughout B.C. regarding the explosion of short-term rentals.

“The issue is that there aren’t the appropriate regulatory and taxation frameworks in place to deal with it,” said Ty Speers, the president of Tourism Vancouver.

In Revelstoke, hotel guests are charged an extra two per cent tax and the money goes into tourism promotion. The tax doesn’t apply to most vacation rentals, or other small accommodations like bed and breakfasts.

In Revelstoke, there is a sense that vacation rentals benefit from tourism marketing efforts, yet they don’t pay into it.

“The major problem is the disparity in coming and staying at a hotel – what a guest will give back to Revelstoke – versus staying at a vacation rental,” said Scott Duke, a city councillor who owns a vacation rental and runs a company that manages 15 others.

(Editor’s note: Duke’s comments were made before he was forced to withdraw a second vacation rental application due to a conflict-of-interest violation that resulted from speaking to the Review. See page four for that story.)

B.C. accommodation providers who offer fewer than four units are exempt from the PST and the hotel tax, wrote a spokesperson for the Ministry of Finance in response to questions. “This recognizes the importance of smaller operators like bed and breakfasts to community tourism.”

The spokesperson clarified the rules: A four-bedroom vacation rental that is rented as a whole doesn’t have to charge the tax, but if the rooms were rented separately, the tax would have to be charged. Someone that owns four separate vacation rentals would have to collect the tax.

The spokesperson wrote the government had no plans to change the policy.

There is a push to start levying the tax on vacation rentals. Tourism Vancouver announced last fall they would begin exploring the option, and AirBnB says they are willing to collect the tax. In B.C., the Ministry of Finance grants taxation powers, and right now municipalities don’t have the ability to levy their own hotel tax.

“The right thing is to get a regulatory framework and a taxation framework that deals with the AirBnBs of the world,” said Speers. “It’s early days, but it’s in discussion. It’s now at least out there and everybody that needs to be talking about it is talking about it.”

The City of Revelstoke doesn’t have the ability to tax vacation rentals, and they don’t have the power to assess properties as commercial instead of residential — that is up to BC Assessment.

A report on vacation rental policy that was prepared for Sun Peaks by Dan Wilson, a community planning specialist with the Whistler Centre for Sustainability, made several recommendations to “tax” vacation rentals. The first was to ensure that commercial fees were paid to Tourism Sun Peaks. The second was for Tourism Sun Peaks to set a fee structure for ski chalets. The third was for the municipality to advocate for voluntary payment of the hotel tax. He also recommended the municipality lobby the province to revisit its taxation policy.

The tax issue extends beyond the hotel tax. The Revelstoke Accommodation Association has gone to council asking them to actively pursue illegal rentals. One of their arguments is that the city is losing out on revenue from business license fees by not cracking down on illegal rentals. In a letter to council in July, RAA wrote the city could be losing out on $12,000 to $20,000 in fees and $16,000 to $32,000 in fines.

I spoke to one illegal vacation rental owner (who asked to not be identified) in town. She said she’d considered becoming legal, but decided not to because of the fee to apply.

“The hard part for us is we make a few dollars through the winter, but we don’t make super great money,” she said. “If you made really good money and you were steady booked through the whole winter, that would be different.”

Duke said the application fee of $1,800 was a barrier for some of the owners he worked with, though he himself didn’t think it was too high.

“I just think it’s a lot of money upfront for somebody to pay,” he said. “It’s a barrier to entry, but once you have that, you have it and your land is designated for that forever. When you sell your property, you can sell it as a vacation rental.”

Ty Speers said they hope to present a plan to tax vacation rentals sometime this year.

“What we have said to AirBnB and to our hotel community is the hotels are obligated to collect the hotel tax,” he said. “We believe if AirBnB is in the business of providing an accommodation platform, that one way or the other – and there are lots of details to discuss – that they should be finding a way to contribute to the tourism industry in a similar fashion to the hotel tax.”

He didn’t know if that would be a tax or a different mechanism.

“If we get into discussion of a level playing the field, the discussion should include some sort of mechanism to require AirBnB to contribute to the tourism economy in a similar fashion that hotels do,” he said.

This is the final part in our series on vacation rentals. For more stories in the Development Matters series, stay tuned to the Review, Current and Mountaineer. We will continue to produce stories under this umbrella over the coming weeks and months.

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A medical worker prepares vials of the COVID-19 vaccines, Chinese Sinopharm, left, Sputnik V, center, and Pfizer at a vaccine centre, in the Usce shopping mall in Belgrade, Serbia, Thursday, May 6, 2021. Serbian authorities are looking for incentives for people to boost vaccination that has slowed down in recent weeks amid widespread anti-vaccination and conspiracy theories in the Balkan nation. The government has also promised a payment of around 25 euros to everyone who gets vaccinated by the end of May. (AP Photo/Darko Vojinovic)
38 new COVID-19 cases, more than 335k vaccines administered in Interior Health

Interior Health also to start targeted vaccinations in high transmission neighbourhoods

FILE PHOTO
Second doses of COVID-19 vaccine will be available, as AstraZeneca supply runs low: Interior Health

Province expecting large volumes of Pfizer BioNTech as age-based cohort immunization program ramps up

Greg Nesteroff and Eric Brighton, the historians behind popular Facebook page Lost Kootenays, are set to release a book of the same name and have just unveiled its cover showing the ghostly Hotel in Slocan City shortly before its 1953 demolition. Photo courtesy of Greg Nesteroff and Eric Brighton.
Popular historical Facebook page Lost Kootenays set to release book

128-page hard copy documenting history of East and West Kootenays coming this fall

Revelstoke’s Mayor Gary Sulz getting his COVID-19 vaccination on April 5. (Jocelyn Doll - Revelstoke Review)
Revelstoke is leading B.C.’s interior on vaccinations: Interior Health

Approximately 70% of the community has first dose of a COVID-19 vaccine

Revelstoke Fire Rescue Services responded to a fire at the Revelstoke Community Energy Corporation site Feb. 11, 2021. It was the fourth fire at the facility since it was built in 2005. (Revelstoke Fire Rescue Services photo)
Future uncertain for City of Revelstoke owned company

RCEC is using a backup system to provide heating after a fire forced the facility offline

(The Canadian Press)
Trudeau won’t say whether Canada supports patent waiver for COVID-19 vaccines

‘Canada is at the table to help find a solution’

A sign indicating face coverings are required by the establishment is pictured on the front door of a business in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
A sign indicating face coverings are required by the establishment is pictured on the front door of a business in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
B.C. to start releasing neighbourhood-specific COVID numbers after data leak

Documents obtained by the Vancouver Sun show cases broken down by neighbourhoods

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Provincial health officer Dr. Bonnie Henry and Health Minister Adrian Dix update B.C.’s COVID-19 situation at the B.C. legislature, April 29, 2021. (B.C. government)
B.C.’s COVID-19 case count creeps up, seven more deaths

445 people in hospital, 157 in intensive care

Summerland’s positive test rate is much higher than surrounding local health areas, according to internal BC CDC documents. (BC CDC)
Summerland 3rd behind Surrey, Abbotsford in daily per capita COVID-19 cases

Interior Health is rolling out additional vaccine availability to the community

Cops for Kids riders will be spinning 30 feet in the air on scissor lifts at SaveOn Foods locations in Kelowna, Lake Country and West Kelowna Saturday, May 8, 2021. (File photo)
Cops reach new heights for Okanagan kids

Nor-Val Rentals is doing the heavy lifting Saturday in Kelowna, West Kelowna and Lake Country

Interior Health nurses administer Pfizer-BioNTech COVID-19 vaccines to seniors and care aids in Kelowna on Tuesday, March 16. (Phil McLachlan/Kelowna Capital News file)
People aged 30+ in Summerland, Rutland offered vaccine amid high transmission risk

Interior Health offers residents of Rutland and Summerland aged 30 and up chance at vaccine

Amazon is pausing its Prime Day marketing event in Canada this year amid ongoing COVID-19 outbreaks at its facilities in Ontario. THE CANADIAN PRESS/Nathan Denette
Amazon Prime Day halted in Canada due to COVID-19 outbreaks in warehouses

The event was postponed to protect the health and safety of employees and customers, the company says

Ally Thomas, 12, seen in an undated family handout photo, died on April 14 from a suspected overdose. Her family says they are frustrated more public supports weren't available when they tried to get her help. THE CANADIAN PRESS
Minister says suspected overdose death of 12-year-old pushing B.C. to ‘do better’

Minister Sheila Malcolmson of Mental Health and Addictions says the government is working ‘as hard as we can’ to build a system of care for youths

Most Read