Too Much Lost Revenue

What could Edmonton or Calgary do with an extra $2.5 million a year? Based on the estimated value of Edmonton Airbnb properties alone, and the tax rates paid by comparable businesses, that’s how much tax revenue we’re leaving on the table.

Both the City of Edmonton and the City of Calgary is being challenged right now to find enough revenue to fund its operations, ideally without raising taxes for residents and businesses overall. Given that, if some business owners are currently exempt from taxes they should be paying, now is the time to change that.

Businesses that offer traditional short-term accommodation, like hotels, pay commercial property tax, corporate income tax, GST and a provincial tourism levy. Commercial short-term rental operators, who offer a comparable service and generate significant income doing so, pay none of that. Instead, they pay standard residential property tax – the same rate they would pay if they were using their property as a private home, not a commercial revenue stream. The Government of Alberta has decided that short-term rentals must pay the provincial tourism levy – perhaps it’s time for Alberta’s two largest cities to take similar action. 

Cities only run well when everyone pays their fair share. And by passing their businesses off as “home sharing,” commercial short-term rental hosts are gaming the system at the expense of Albertan’s.