Pending federal tax reforms targeting Airbnb hosts encouraging, B.C. minister says

The crackdown on short-term rentals continues.

CTV News has learned the federal government will announce new tax reforms on Tuesday that target Airbnb and other short-term rental hosts.

Under pressure to increase long-term housing supply and ease the country's housing crisis, the government is set to alter tax rules to no longer allow short-term rental hosts to write off rental expenses in cities where restrictions are in place, including Vancouver.

For example, if a host makes $120,000 in income and has $120,000 in expenses, they'd have to pay $33,000 in federal taxes.

"Early indication is it sounds like a pretty good proposal that they're putting forward to help us not only in British Columbia, but really across the country to address this growing challenge," said B.C. Housing Minister Ravi Kahlon.

Last month, the province introduced new legislation to crack down on illegal operators.

"I feel as though it's low hanging fruit, a scapegoat," said Jordan Deyrmenjian, founder of Artin Properties.

Deyrmenjian's company manages over 150 short-term rentals in the Metro Vancouver area. He said he understands people's frustration with the housing market, but believes targeting short-term rental hosts is not the solution.

"I think it would be more worthwhile of the federal government, provincial government, all ranges of government just to commit to providing more supply of housing and also non-market housing,” he said.

In October, the province said there were around 28,000 short-term rental listings in B.C.

"When I look at what government’s doing, I don't think it's an attack on short-term rentals so much as saying let's try and put short-term rentals in its appropriate place, rather than allow the excesses that have occurred, particularly in metropolitan areas," said Tsur Somverville, a UBC professor who specializes in housing issues.

The federal tax reforms are expected to be in place Jan. 1, 2024.