Claiming the Ontario staycation tax credit on an Airbnb trip? You may run into trouble

The Ontario government’s staycation tax credit was created to push families to explore the province after a few difficult years for the tourism sector amid the COVID-19 pandemic. It allows Ontarians to claim up to 20% of eligible accommodation expenses, such as hotel or campground stays, including short-term vacation rentals.

Emily Young went on three family vacations within Ontario last year thinking she would be eligible for the province’s “staycation tax credit.”

But when she went to file her taxes this month, Young couldn’t find the HST number associated with the Airbnbs she stayed at. The HST number is required to claim the credit.

When she took her concerns to Airbnb, Young said she was told she would need to request the information directly from the host, not the platform.

One host was able to provide her with an HST number, but the two others told her to contact customer service. Young did that, but says Airbnb told her it couldn’t provide the number due to “privacy reasons.”

“I was hoping that I could get this resolved so that I could fill out that HST part and not be denied this vacation credit,” Young told CBC Toronto.

“Something doesn’t sit right.”

Airbnb’s customer service told Young in an email it had given her case “careful consideration” but that it was “unable” to provide the information she was looking for.

“We understand that this might not be what you’d hoped for, but we came to this outcome because the HST number is not information that we provide to our guests,” said the email seen by CBC Toronto.

The short-term rental platform told CBC Toronto it has been providing the information upon request.

“We have shared the HST number with hosts and guests who have requested it,” said Airbnb spokesperson Matt McNama in a statement to CBC Toronto Monday.

McNama did not comment on Young’s case or provide any further information.

Credit expected to give $270M back to Ontarians

Ontario’s staycation tax incentive was introduced in 2022 to encourage families to explore the province following some difficult years for the tourism sector amid the COVID-19 pandemic. The credit allows Ontarians to claim up to 20 per cent of eligible accommodation expenses, up to $1,000 per person or $2,000 per family. That works out to a maximum return of $200 per person or $400 per family.

The incentive applies to leisure stays between Jan. 1, 2022, and Dec. 31, 2022.

The tax credit, administered by the Canada Revenue Agency, is expected to provide an estimated $270 million in support to about 1.85 million Ontario families.

Young, who lives in Mississauga, said her accommodations in Prince Edward Country, Owen Sound and Midtown Toronto, came up to roughly $3,000 in total. She was hoping to make a few hundred dollars back through the tax claim.

“The government probably shouldn’t have put so many stipulations on the vacation credit and [made] it difficult for people to achieve … or they shouldn’t have said that Airbnbs are included if Airbnb is not going to provide the information for us,” Young said.

According to the Ministry of Finance, Ontario residents can qualify for accommodation expenses for a leisure stay of less than a month within the province, such as at hotel or campgrounds. Motels, resorts, lodges, bed-and-breakfasts, cottages and vacation rental properties are also eligible.

According to the province, Airbnbs do qualify for the credit as they fall under vacation rental properties.

No word on what to do if HST number denied

Still, other Airbnb clients have experienced similar difficulties when trying to obtain HST numbers from Airbnb, Toronto accountant Sandra DaCosta says.

She said many of her clients have told her they were not given an HST number after requesting it from the vacation rental platform.

“It’s a little frustrating because I think this took a lot of people by surprise,” DaCosta said.

“People send me their vacation tax receipts, some of them have HST numbers and some of them don’t,” she said.

“Some [clients] have used the unfortunate third party sites to book their space, for example Airbnb, which in this situation can be difficult to get the HST number.”

A spokesperson for the Ministry of Finance said accommodation providers — meaning either the company or the individual hosts themselves — must be registered for the Goods and Services Tax (GST) and Harmonized Sales Tax (HST). According to Airbnb’s website, those taxes apply to its listings.

When asked what customers should do if they’re not given an HST number, the ministry did not respond.

“Detailed receipts should be kept for any eligible expenses claimed for the credit,” said ministry spokesperson Scott Blodgett.

The receipts must include the locations of the accommodation, the total portion paid by an individual or family for their stay, the amount of any GST/HST paid, the date of the stay and the name of the payor, he added.

In December, Ontario’s tourism minister announced that the province won’t be extending the 2022 staycation tax credit for another year, despite the hard-hit industry recommending the move as a way to help it recover from the pandemic.