The City of Toronto has implemented a four per cent Municipal Accommodation Tax (MAT) on hotels effective April 1, 2018, and on short-term rentals pending the enactment of the short-term rental by-law.
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Application of MAT
Effective April 1, 2018, the City of Toronto has implemented a four per cent Municipal Accommodation Tax (MAT) on hotels in Toronto.
The MAT applies to all rooms used for rental accommodation for four hours or more and continuous stays of 30 days or less for:
- hotels (including full service, limited service, small hotels)
- condo Hotels
- the portion of a multi-use complex that is used to provide transient accomodation
The tax only applies to the room cost portion of rental accommodation. Other hotel services, including meeting room rentals, food and beverage, room services, internet and phone charges, are excluded from the tax provided they are itemized separately on the bill.
If your accommodation was booked and paid for prior to April 1, 2018, the tax will not be applicable. If it was booked before April 1, 2018, but paid for on April 1, 2018, or later, the tax is applicable.
Pending the enactment of the short-term rental by-law, the City of Toronto will be implementing a four per cent MAT on short-term rentals in Toronto. A short-term rental is defined as all or part of a dwelling unit used to provide sleeping accommodation for any rental period that is less than 28 consecutive days in exchange for payment, which includes existing bed and breakfasts.
If a rental property was booked and paid for prior to the MAT implementation date, the tax will not be applicable. If it was booked before the implementation date but paid for on or after that date, the tax is applicable.
Paying the MAT
All hotel guest invoices will include a separate line for “Municipal Accommodation Tax” as of April 1, 2018. The four per cent tax applies only on the room cost portion of overnight accommodation and excludes costs from other hotel services, including meeting room rentals, food and beverage, room services, internet and phone charges, provided they are itemized separately on the bill.
The payment process for the MAT on short-term rentals is currently being finalized. Information on how short-term operators and companies will collect and remit the MAT back to the City will be available shortly.