Yes, Airbnb income and other short-term rental earnings must be reported to the CRA as rental income on your tax return. Whether you rent out a spare room, an entire property, or use a room-sharing platform, the CRA considers this self-employment or rental income depending on the scale and frequency of your activity. The key difference between traditional long-term rentals and short-term platforms like Airbnb is how the CRA classifies the income, but both are taxable in Canada. The CRA distinguishes between different types of rental activities based on the level of service you provide: Short-term rentals (including Airbnb) - You provide additional services like cleaning, linens, or frequent guest turnover - Income is generally treated as self-employment income - Subject to both income tax and potentially GST/HST registration requirements - More expenses may be deductible, but record-keeping is stricter Long-term rentals (traditional tenant leases) - Tenant occupies the property for extended periods (typically months or years) - Income is reported as rental income on your tax return - Similar deductions available, but the classification affects how you report If you're running a short-term rental business with significant activity, this CRA rule may apply to you: your income might need
Airbnb income is typically classified as self-employment income rather than passive rental income because you're providing a service (cleaning, guest management, furnishings). However, the exact classification depends on the frequency and scale of your activity and how the CRA views your specific situation. Long-term rental income from tenant leases is classified differently and reported on a separate line of your tax return.
If your short-term rental revenue exceeds $30,000 in a calendar year, you must register for GST/HST. Once registered, you'll charge and remit GST (5%) or HST (13-15% depending on province) to guests, but you can claim back input tax credits on business expenses. Many part-time Airbnb hosts stay below this threshold and are not required to register.
Renting out any portion of your principal residence may disqualify that portion from the principal residence exemption, meaning you could owe capital gains tax on that share when you sell. The rules are complex and depend on how much of the home was rented and for how long. You should consult a tax professional before renting out your primary residence to understand the long-term tax impact.
You can deduct expenses directly related to operating your rental, including cleaning supplies, utilities, property maintenance, insurance, advertising fees, guest amenities, and a portion of mortgage interest or property taxes. You cannot deduct capital improvements (renovations), personal meals, or the full amount of utilities if you live in the property. You must allocate shared expenses based on the percentage of time the property is rented.
Yes, you must report all Airbnb income to the CRA regardless of whether you receive a T-slip. The CRA has access to Airbnb's records and expects you to voluntarily report all earnings. Failing to report income can result in penalties, interest charges, and potential audit.