GST/HST on rental income in Canada

Exempt is not the same as zero-rated

Long-term residential rent is an exempt supply. You do not charge GST/HST on it, you do not register for it, and it does not count toward the $30,000 small supplier threshold. The flip side is the part landlords miss: because the rent is exempt, you cannot claim input tax credits, so the 13% HST on an Ontario contractor's invoice or the 5% GST on an Alberta property manager's fee is a real cost. It is still a deductible expense or a capital cost for income tax purposes, as covered in our rental income tax guide, but you never get the sales tax back. Zero-rated supplies (exports, basic groceries) are the ones that carry no tax and still allow input tax credits; residential rent is not one of them.

Which rentals are taxable

Short-term rentals: the $30,000 line

Renting a unit for continuous periods of under a month is a taxable supply of accommodation. You stay a small supplier, with no obligation to register or charge, until your taxable revenue exceeds $30,000 in one calendar quarter or across the last four consecutive quarters. The timing rules bite differently depending on how you cross. Blow through $30,000 inside a single quarter and you must charge tax on the booking that crossed the line and register within 29 days. Drift over it across four quarters and you become a registrant at the end of the month following that quarter, charging from your next booking. Many hosts register voluntarily before that point to recover the GST/HST on furniture, renovations and platform fees.

Since July 1, 2021 accommodation platforms such as Airbnb and Vrbo collect and remit GST/HST on bookings by hosts who are not registered, so an unregistered host's guests already pay the tax. Once you register, you give the platform your number and collect it yourself, which is when the input tax credits start. Registration also changes what happens when you sell: a property used primarily for taxable short-term rentals by a registrant sells with GST/HST on the price, unlike a long-term rental, which sells exempt as used housing.

Rates by province, 2026

The rate follows where the property is, not where you live. Provincial and municipal accommodation taxes (BC's PST and MRDT, Quebec's lodging tax, city hotel taxes) stack on top and are collected separately.

The 2024 rule that can wipe out every Airbnb deduction

Section 67.7 of the Income Tax Act, in force since January 1, 2024, denies all income tax deductions for a short-term rental in any year it operates in a province or municipality that prohibits it, or without the licence or registration those rules require. The denial is prorated by days of non-compliance, and the CRA is not bound by the usual reassessment window when applying it. In practice, an unlicensed short-term rental in Toronto, Vancouver or Montreal, or one in a BC community covered by the principal-residence requirement, pays income tax on gross revenue with no mortgage interest, no cleaning, no platform fees deducted. Compliance is now a tax question, not just a bylaw one, and the sales tax registration above makes you easier to find.

Buying new construction to rent out

Resale housing is exempt on purchase, so most investors never see GST/HST on a closing statement. New construction is different: the builder's price attracts full GST or HST, and the new housing rebate that owner-occupiers get is not available to a landlord. Instead you pay the tax at closing and claim the new residential rental property rebate afterward, provided you lease the unit long term as a tenant's primary residence for at least a year. The federal part is 36% of the 5% GST, a maximum of $6,300, on units valued at $350,000 or less, shrinking to zero by $450,000, which excludes most new condos in Toronto and Vancouver. HST provinces add a provincial rebate on their portion: Ontario's runs to $24,000 and does not phase out with price. Buyers of pre-construction units should model the tax and rebate explicitly in the purchase price; our rental property calculator takes the all-in price, so add the unrecovered tax to it.

Larger investors get a better deal. Purpose-built rental buildings with at least four private units (or ten rooms), with at least 90% of units held for long-term rental, that began construction after September 13, 2023 and before 2031, and finish by the end of 2035, qualify for a 100% GST rebate with no value cap. Ontario matches it on the 8% provincial portion of HST. A builder-landlord who constructs and then rents also triggers the self-supply rule: GST/HST is owed on fair market value the day the first tenant moves in, then the rebate is claimed against it, which is why appraisals on new rental builds get audited closely.