Mi casa, su casa: Home sharing and the taxman
Home sharing sites, like Airbnb, have become an increasingly popular way of making extra income on your home in this sharing economy. Money earned through renting out your home has not gone unnoticed by CRA, and taxes are owed on any revenue you receive on these short-term rentals. Depending on what services you provide with your rental, it may be taxed as rental income if you only offer basic services or business income if you offer additional services like meals, cleaning or security. Each type of income comes with the ability to make certain deductions, and if it qualifies as business income, then you may also need to charge taxes like GST. If you want to maximize your available deductions and clarify your tax position, consult an accountant who can help you determine which kind of income your rental falls under.
“When you earn money from renting out part of your home, it may qualify as either rental or business income for taxation purposes, which is why it’s important that you know which category your income falls under come tax time.”