Airbnb Taxes in Canada: 10 Rules You Can’t Afford to Ignore in 2025
(And How AI Can Help You Stay Audit-Proof)
This is not an AI deep-dive, but it’s exactly the kind of business-critical intel your AI tools should be working to support. Whether it’s tracking deductions or staying on top of licensing deadlines, smart systems can take most of the grunt work off your plate.
If you think tax season is just about reporting your Airbnb earnings, buckle up. 2025 is here with new rules that could wipe out your deductions before you can say “guest checkout.”
From CRA data sharing to a brutal new compliance requirement, here is the fast, host-friendly version of what you need to know to keep your money in your pocket (and the CRA out of it).
If you think tax season is just about reporting your Airbnb earnings, buckle up. 2025 is here with new rules that could wipe out your deductions before you can say guest checkout.
This post is not about using AI to make pretty Instagram captions. It is about protecting your profit. While this is a tax guide first, AI can be your behind the scenes assistant by tracking expenses, organizing receipts, and reminding you when licensing renewals are due.
Here is the host friendly version of what you need to know to keep your money in your pocket and the CRA out of it, plus quick AI tips to make it easier.
1. No License = No Deductions 🔥
As of 2024, if your short term rental is not fully compliant with municipal and provincial rules, the CRA can deny all your expense claims. That includes mortgage interest, utilities, insurance, maintenance, and more.
Action Step: Register and license your STR with your city or province and save copies of every document.
AI Tip: Store your permits and licenses in a cloud folder connected to an AI powered search tool so you can find them instantly if needed.
2. Must Be Your Principal Residence (in many areas)
Toronto, Vancouver, and BC (as of 2025) now require your STR to be your actual home, not just a property you own. Fail this and you could lose deductions and get fined.
Action Step: Check your municipality’s definition of principal residence and make sure your listing meets it.
AI Tip: Ask ChatGPT to create a compliance checklist based on your city’s short term rental bylaws. (Prompt coming soon our resource vault).
3. CRA Gets Your Airbnb Data in 2025
Airbnb, Vrbo, and other platforms will now send your gross earnings, tax ID, and property address straight to the CRA by January 31 each year.
Action Step: Make sure your SIN or business number is updated in your Airbnb host profile.
AI Tip: Set an AI calendar assistant to remind you each January to download your transaction summary and match it against your records.
4. The 90% Rule for GST/HST on Sale
If your property is used for STR more than 90% of the time, it may be classified as commercial on sale. That can mean a 13% GST/HST bill in Ontario, with similar rules in other provinces.
Action Step: Track your percentage of STR use and speak with a tax advisor before selling.
5. All Airbnb Income Is Taxable
There is no exemption threshold. Whether you earn $500 or $50,000, it must be reported.
Action Step: Track every payout from every platform using a spreadsheet or accounting software.
AI Tip: Connect your bank feed to an AI enabled accounting tool so it automatically tags Airbnb deposits and flags missing entries.
6. Use the Correct CRA Form
T776 for passive rentals.
T2125 for self employed income when you provide services like meals, tours, or concierge support.
Action Step: Choose the correct form now to avoid headaches later.
7. Deduct Expenses the Right Way
Claimable expenses include mortgage interest, utilities, cleaning, condo fees, supplies, and repairs. Prorate based on the percentage of your space rented and the time it is rented.
Action Step: Example: 25% of space for 6 months equals a 12.5% deduction. Keep all receipts.
AI Tip: Have ChatGPT create a simple proration calculator in Google Sheets so you do not have to redo the math.
8. Airbnb Might Collect Taxes or Might Not
In most provinces, Airbnb collects GST/HST for you unless you are registered, in which case you must remit yourself. Some cities have their own rules.
Action Step: Check Airbnb’s help pages and your provincial tax authority.
9. Hit $30K? Register for GST/HST
If your total taxable revenues from Airbnb and other business income exceed $30,000 in a 12 month period, you have 29 days to register.
Action Step: Track all business income, not just Airbnb.
10. Audit Your Numbers Before the CRA Does
Airbnb’s transaction summaries are not perfect. Discounts, refunds, or offline deals can cause discrepancies.
Action Step: Reconcile your own records against Airbnb’s each month, not just at year end.
AI Tip: Use an AI tool to scan your Airbnb CSV export for anomalies so you catch issues early.
TL;DR for 2025:
Get licensed and keep proof
Follow principal residence rules
Track your earnings because the CRA will
Prorate and document every deduction
Check GST/HST responsibilities
Audit yourself before they do
💡 Want the full deep dive with province-by-province tax rules?
Read the original Lodgify Host’s Guide to Airbnb Taxes in Canada and then use this post as your action plan.