Agents at the Canada Revenue Agency are scrolling through Airbnb looking for opportunities to increase taxes on your property. What for many was a convenient website to list a rental and earn some additional income, has become a convenient website for the Liberals to grab some of your cash.
Recently, Canadians who had used Airbnb’s services in the past to rent out property started receiving emails from the company asking for their HST registration numbers, or Social Insurance Number. This is a result of changes made by the Trudeau Liberals in the 2020 Fall Economic Statement, which required GST/HST to be collected for short term rentals. In the 2023 Fall Economic Statement, the Liberals introduced more regulations on short term rentals. Now, you must ensure you are following municipal regulations and remitting municipal taxes in order to claim federal expense deductions.
The Liberals tried to blame short term rentals for rising housing prices. The Liberals claimed they wanted more homeowners to switch from offering short term rentals to long term rental. Then the Liberals modified the rules around “Change-In-Use” for homes, revealing their true agenda.
If you have been renting out on a short-term basis and decided to switch to long-term rentals, the new rules mean you will pay HST and Trudeau’s higher capital gains taxes as though the property had been sold.
Income Tax Act
Property with more than one use
45 (1) For the purposes of this Subdivision the following rules apply:
(a) where a taxpayer,
(i) having acquired property for some other purpose, has commenced at a later time to use it for the purpose of gaining or producing income, or
(ii) having acquired property for the purpose of gaining or producing income, has commenced at a later time to use it for some other purpose,
the taxpayer shall be deemed to have
(iii) disposed of it at that later time for proceeds equal to its fair market value at that later time, and
(iv) immediately thereafter reacquired it at a cost equal to that fair market value;
Canadians who rent a portion of their principal residence more than 50% of the year could lose some or all of the principal residence exemption on capital gains taxes when they sell their homes. By checking Airbnb, the CRA is able to track exactly how often you rent a property, whether it is a cottage, an income property, or even a portion of your home.
If you must leave the country for work and rent out your home, the CRA can declare you a non-resident (for tax purposes) and you will be forced to pay capital gains and HST if you return to Canada and want to move back into your home. If you leave the home vacant, some municipalities now charge a vacant home tax. If you are ever forced to sell your home less then a year after purchase, you lose the principal residence tax exemption and must pay Trudeau’s higher capital gains tax.
Ever since 2016, when the Liberals began demanding you provide details about your home on your tax return, many have come to believe the Liberals want to remove the capital gains tax exemption on people’s homes. The Liberals paid $250,000 to a group which lobbies for ending the tax exemption on homes. The group used the money to write a report about the need to end the tax exemption on homes. Last summer Trudeau and Finance Minister Freeland held a secret meeting with this same group.
The Liberals and their media allies will claim anyone who says they want to end the exemption and tax your home is spreading misinformation. Since demanding you list your home on your tax return the Liberals have removed the exemption for non-citizens, non resident Canadians, Canadians forced to move within a year, and anyone who switches between providing short term rentals and long term, or from long or short term to personal use. Then the Liberals raised capital gains taxes. The Liberals have already blown past the massive $40 billion deficit they announced in the budget just six months ago. As the Liberals go down in the polls their need for your tax dollars to bribe you goes up.
How long before the Liberals come for all of our homes?