GST/QST Compliance for Airbnb and Short-Term Rentals in Quebec: Registration, Filing, and Audit Exposure

Introduction

Short-term rentals, including Airbnb, VRBO, furnished studios, and boutique vacation rentals, are fully taxable activities in Quebec. Whether you operate one unit or several properties, GST and QST generally apply from the first dollar. Many hosts unknowingly expose themselves to penalties and reassessments because they assume their activity is “residential rental,” which is exempt from GST/QST. It is not.

This guide explains the tax rules for short-term rentals, required registrations, filing obligations, available ITCs/ITRs, and the audit risks associated with Airbnb operations in Quebec.

Legal and Regulatory Framework

Short-term rentals fall under the Excise Tax Act (ETA) and the Quebec Taxation Act (TAA).

Short-Term Rental Definition

Under GST/QST rules, a rental is considered short-term if the stay is:

• less than 30 consecutive days, and

• the unit is normally used for temporary lodging (tourist accommodation).

Short-term rentals are fully taxable, unlike long-term residential rentals, which are exempt.

Mandatory GST/QST Registration

If you earn more than $30,000 in the last 12 months from taxable supplies (short-term rentals), you must register for:

• GST (5%)

• QST (9.975%)

Even below $30,000, many hosts voluntarily register to claim ITCs/ITRs on operating costs.

Tourist Accommodation Permit

Quebec requires a CITQ permit for most short-term rentals. RQ often uses CITQ registration lists to cross-match hosts for GST/QST audits.

Platform Rules

Platforms such as Airbnb collect and remit lodging tax, but not GST/QST.
This means hosts are still responsible for:

• charging GST/QST

• remitting GST/QST

• filing periodic returns

Many hosts mistakenly believe Airbnb remits everything. It does not.

Key Court Decisions

1. Garneau v. RQ, 2022 QCCQ — Airbnb rental is taxable

The host argued the rental was residential. Court confirmed short-term rentals are always taxable.

2. Hôtel du Vieux Québec, 2020 — Shared platform does not replace GST/QST obligation

The court ruled that platform-collected fees (like Airbnb’s lodging tax) do not exempt the operator from GST/QST duties.

3. RQ v. 9218 Québec Inc., 2019 — Incorrect exemption claim leads to reassessment

A host who rented multiple furnished units as short-term stays tried to classify them as exempt residential leases. Assessment upheld.

4. Chalets Mont-Royal, 2021 — ITCs denied due to missing documentation

The operator could not provide proof for renovation and furnishing expenses. ITCs were denied.

These cases confirm that Airbnb operations are strictly taxable and heavily monitored.

Why CRA and Revenu Québec Target Airbnb/Short-Term Rentals

Short-term rentals are targeted because:

1. Large underreporting of GST/QST
   Hosts frequently fail to register or charge tax.

2. High cash flow and strong margins
   Auditors know GST/QST amounts can be significant.

3. Platforms provide data
   RQ regularly receives information from Airbnb, booking platforms, and municipal registries.

4. Hosts often misclassify their rentals
   Confusing residential vs commercial rental leads to errors.

5. Renovation and furnishing claims
   Large ITC/ITR claims attract attention.

6. Mixed-use situations
   Units used partly for personal use trigger self-assessment rules.

7. Unlicensed hosts
   Municipalities share data with RQ when issuing fines.

Mackisen Strategy: How We Protect Airbnb Hosts and Short-Term Rental Operators

We apply a proven Airbnb compliance framework for GST/QST.

1. GST/QST Registration and Setup

We determine:

• whether you must register

• when registration is effective

• how to set up proper invoicing

• how to handle Airbnb fees

2. Design of a Tax-Compliant Pricing Model

We structure pricing so taxes are:

• properly charged

• properly disclosed to guests

• correctly integrated into Airbnb or booking systems

3. ITC/ITR Optimization for Hosts

We help hosts recover eligible GST/QST on:

• renovation costs

• furniture

• cleaning services

• management fees

• utilities

• supplies

• capital improvements

4. Mixed-Use Unit Review

If the unit is sometimes used personally, we calculate:

• restricted ITCs/ITRs

• self-assessment obligations

• allocation models

5. Audit Defence

We manage:

• correspondence with auditors

• proof of taxable supply

• expense documentation

• booking reports and occupancy records

• platform statements

6. Voluntary Disclosure

For hosts who never registered or underreported, we file voluntary disclosure to reduce penalties.

Real Client Experience

A Montreal client operating three Airbnb units had never registered for GST/QST and assumed Airbnb remitted all taxes. RQ began an audit covering two years of bookings.

Mackisen:

1. Registered the client for GST/QST retroactively.

2. Filed voluntary disclosure to eliminate penalties.

3. Calculated ITCs on renovations and furnishings totaling over $17,000.

4. Reconstructed Airbnb payouts and guest invoices.

5. Reduced the GST/QST balance by more than 55 percent.

Outcome: The reassessment was lowered from $28,000 to under $12,500 with no penalties.

Common Questions

Does Airbnb collect GST/QST for me?

No. Airbnb only collects lodging tax. You must charge and remit GST/QST.

Are short-term rentals taxable even if I only rent occasionally?

Yes. Frequency does not change the GST/QST rules.

Can I claim GST/QST on renovations?

Yes, if you are registered and the property is used for commercial short-term rental.

What if I rent long-term sometimes and short-term other times?

Mixed-use rules may apply, requiring allocation and self-assessment.

If I earn under $30,000, do I still need to register?

Not mandatory, but voluntary registration may allow ITC recovery.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they’re entitled to. Whether you’re filing your first GST/QST return or optimizing multi-year refunds, our expert team ensures precision, transparency, and protection from audit risk.

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