
The Tax Court of Canada recently ruled that if you regularly rent out your place on Airbnb or similar sites, you could end up paying GST/HST on the total sale price when you sell. For a $1 million home in Ontario, that’s a $130,000 tax bill. Usually, you don’t have to worry about GST/HST. But if you’re consistently renting it out, the court ruled the house is treated more like a commercial property, which means taxes apply. To avoid the tax, you'll need to keep an eye on the 90% threshold — if you’re renting it out as a short-term rental 90% of the time, you’re liable for that tax. If you’re renting it out longer term (over 60 consecutive days), that still counts as residential use and doesn’t trigger the tax. Make sure to keep good records of your rental periods and track how often you’re renting short term versus long term. And, the ruling suggests if you convert your property back to residential use before selling, you might avoid the tax.