Selling a home you rented on Airbnb does not automatically add 13% HST to the price. For an owner who never registered for GST/HST and never claimed input tax credits, the sale of a used home is generally exempt. The tax bites when credits were claimed or the property was run as short-term accommodation.
Where the $104,000 figure comes from
It is arithmetic: 13% of $800,000 is $104,000. That is the most HST a fully taxable sale of that size could carry in Ontario. It is not what an ordinary seller owes. The old version of this article also cited a Tax Court ruling that reclassified Airbnb homes as commercial. We could not find it on an official page, so it is gone.
The general rule for a used home
The CRA says the sale of a previously occupied residential complex by someone other than the builder is generally exempt. That covers most owners. The exemption does not apply if the seller claimed input tax credits on the last acquisition of the property or on improvements to it. The CRA also names a residential complex used as short-term accommodation as a case where a sale can be taxable.
How credits and the 90% figure work
In the CRA’s vacation property guide, a later sale is taxable in most cases where the seller claimed a credit on the purchase. Sales where no credit was claimed may be exempt. That single difference decides most cases.
The 90% figure is narrower than the old article said. It describes rental pools, where all or substantially all (90% or more) of the rentals are under 60 days, so the property runs like a hotel. It is not 90% of nights in a year. Buying mainly for personal use (over 50%) means no credit on the purchase. Use of 50% to under 90% in taxable short-term rentals may allow a partial credit.
A change of 10% or more in rental or personal use can also have GST/HST effects. So keep dates for when you lived there and when you rented.
A worked example
Two sellers each list a condo at $800,000. The first never registered or claimed credits, so the sale is likely exempt and the buyer pays $800,000. The second registered, claimed credits and rented in short stays, so the sale is likely taxable. HST is $104,000 and the buyer pays $904,000 if the contract adds tax on top.
If the contract says the price already includes HST, the tax is backed out instead: $800,000 times 13 over 113 is about $92,035. The wording matters, so have your lawyer read that clause.
Tax on the stays themselves
Separately, the CRA treats a stay of less than one month costing more than $20 a night as taxable short-term accommodation. Registered hosts collect the tax. Platforms must collect it for unregistered hosts. The small supplier threshold is $30,000 in four consecutive quarters, and you can test a nightly rate with the GST/HST calculator.
What Toronto requires
The City allows short-term rentals only in your principal residence, and only one. The registration and 2026 renewal fee is $390, not the $50 the old article quoted. Up to three bedrooms can be rented any number of nights, and a whole home is capped at 180 nights a year.
Guests pay a 6% Municipal Accommodation Tax on stays under 28 nights, remitted quarterly within 30 days of quarter end. On $6,000 of stays in a quarter that is $360. Fines are $1,000 with no registration, $700 over 180 nights and $1,000 for advertising without a number. The short-term rental calculator runs your own figures.
A second condo is a different case
Toronto allows short-term rentals only in a principal residence, so a second condo used full time as an Airbnb falls outside the City’s rules. The CRA’s tax view is a separate question, and one system can be satisfied while the other is not. For longer leases, the rental property calculator models cash flow. For your own numbers, try the PST / QST Sales Tax calculator, or browse the tax calculators.
Before you sell
- Check if a GST/HST registration was ever opened for the rental.
- Find out if credits were claimed on the purchase or renovations.
- List the periods of personal use, short-term rental and long-term rental.
- Have a tax professional and a real estate lawyer review the contract.
Sources
- CRA GI-025, vacation properties
- CRA, residential real property sales
- CRA, platform-based short-term accommodation
Common questions
Do I pay 13% HST when I sell a home rented on Airbnb?
Last reviewed: . Figures come from the official sources listed above. How we check the numbers and our editorial policy.