You Ran It as an Airbnb for Years. Now You Are Selling. Could 13% HST Land on the Sale Price?
Reselling a used home is normally HST-exempt. But run it like a hotel long enough and, in the eyes of the tax law, it may no longer be a residential complex at all — and that exemption is written only for residential complexes.
I heard renting my place on Airbnb could cost me 13% HST when I sell — is that actually true?
For the many owners who rented only occasionally, the honest answer is: almost certainly not. Selling a used home is normally exempt, and casual short-term hosting does not undo that. The exemption slips away only if the property has effectively turned into a lodging operation — a two-part test in the Excise Tax Act, s.123(1), where both limbs must hold: the place is a hotel, motel, inn, boarding house, lodging house or other similar premises, and all or substantially all of the leases or licences are for continuous stays of under 60 days. CRA administratively reads “all or substantially all” as 90% or more (Policy P-053) — an administrative yardstick, not a number written into the statute. Clear both limbs and the property drops out of the residential complex definition, so the resale exemption in Schedule V, Part I, s.2 may stop applying and 13% HST (5% + 8%) can land on the sale price. Fall short of either limb and you are, almost always, fine.
Sources: Canada, Excise Tax Act, R.S.C. 1985, c. E-15 — s.123(1) definition of residential complex (exclusion); Schedule V, Part I, s.2 (exempt resale by a non-builder); CRA Policy P-053 (90% administrative reading of all or substantially all). laws-lois.justice.gc.ca, current version, checked 2026-08-14.
I am Arthur Zhao. If you have hosted your place on Airbnb and some corner of your mind now suspects the taxman is owed 13% of whatever you sell it for — take a breath. For the great majority of owners who hosted now and then, that worry is misplaced.
The rule that actually does this is narrow. It does not reach people who rented occasionally; it reaches the small group who, over the years, effectively ran a home as a lodging operation — and even then only when a specific two-part test is met. The catch is that nobody flips a switch to tell you which group you are in. Eligibility for the tax-free sale can quietly erode across years of how a place gets used, and the bill, if there is one, surfaces only when you list.
So this is not a scare piece, and it is not tax planning. I will walk the timeline — from the day a home was bought exempt, through the years it was rented, to the moment you sell — and then give you four plain questions to hold your own situation against. The one line to keep: it is emphatically not “you Airbnb’d, so you owe tax.” That line sits far higher than most owners fear.
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Where the story starts: a used home resale is HST-exempt
Take it as a timeline, because that is how this actually plays out. It starts on the day you bought — an ordinary home, lived in or rented long-term. At that stage, selling it later carries no HST, and here is why.
Under Canada’s GST/HST system, the sale of a previously-occupied residential complex by someone who is not its builder is an exempt supply. The authority is the Excise Tax Act, Schedule V, Part I, s.2: a supply by way of sale of a residential complex by a person who is not the builder is exempt — unless, among other things, that person had claimed an input tax credit on the last acquisition of the complex or on improvements to it.
In plain terms: you bought a resale home, you are not a “builder,” so the sale carries no HST. That is why the overwhelming majority of owners never think about the number 13% when they sell. Hold onto one word, though — this exemption protects a residential complex. The whole story turns on whether your property is still one when you get to the closing table.
Where it can go wrong: the s.123(1) carve-out
Now fast-forward through the years you ran it as a short-term rental. Somewhere in that stretch, the tax law asks a quiet question about what the property has become.
Excise Tax Act s.123(1) defines “residential complex” and then carves out one category. In substance, the definition does not include a building, or part of one, that is a hotel, motel, inn, boarding house, lodging house or other similar premises where all or substantially all of the leases, licences or similar arrangements provide for periods of continuous possession or use of less than 60 days.
If, over those years, the property crossed into that carve-out, then by the time you list it, it may already have stopped being a residential complex in tax terms — and the exemption built for homes no longer reaches it. Whether you crossed that line is not a gut call. It comes down to two limbs that must both be satisfied — and the cleanest way to test them against your own situation is to walk through four questions.
Run your own situation through four questions
None of these is answered by the word “Airbnb.” Answer them honestly against your actual operating history, and you will know roughly where you sit — and whether you need a professional to weigh in before you list.
Are these even hotel-like premises?
Were all or substantially all of the stays under 60 days?
Watch the yardsticks here, because three numbers get confused: the 60-day figure is the one that governs the residential-complex definition; the separate short-term accommodation concept in s.123(1) uses less than one month and feeds different provisions (certain credit and rebate rules); and the 90% is not in the statute at all — it is CRA’s administrative reading of “all or substantially all,” measured by revenue or room-nights, applied consistently. Do not use a one-month yardstick on the 60-day test.
⚠️Do not read Q2 as “you listed on Airbnb, so you owe HST.” Both limbs must be met — the property must be hotel-like AND all or substantially all (~90%+) of the arrangements must run under 60 days. Occasional short stays, or a mostly long-term rental, generally do not clear that bar.
Did you ever run it as a business or claim credits?
Are you selling as-is, or converting back first?
self-supply). Under Excise Tax Act s.206–207 (and the s.191 self-supply rules), shifting a property from residential to commercial use — or back again — can be treated as a sale at fair market value and trigger an HST consequence, even with no actual buyer.
So the moment you turned a home into a full-time short-term operation may itself have been a tax event; and trying to “convert back” to a home before selling is itself an act that can trigger one. This runs both ways. I unpack the commercial-property direction of change-of-use in a separate piece (see related reading); here, just know it exists, runs both ways, and its timing can precede the sale.
ℹ️Change-of-use runs both ways: converting a home into a full-time short-term rental, and converting it “back” before a sale, can each trigger a deemed supply at fair market value. So “convert back, then sell” is not a move you can make on your own read — it is itself a tax event.
💡 My own read: the people genuinely exposed here are those who ran a property as a full-time short-term-rental business — not owners who rented occasionally. If your answers to the four questions are yes-yes-yes and you are unsure on the fourth, get a tax advisor to look before you list. If they are no, or mostly no, you are very likely still on the residential-complex side of the line. Do not assume the word “Airbnb” means tax — but do not list on a hope, either, if the operation was intense. Establish the facts first, then decide whether you need a professional opinion — not the other way round.
The two ends, side by side
One thing I have to say plainly
This article is structural education to help you judge whether your property could fall into this exception. It is not tax advice, and it is not tax planning.
The statutory text — the s.123(1) exclusion, the Schedule V, Part I, s.2 exemption — is fact. But whether your specific property is a residential complex, and whether its sale should carry HST, is a fact-dependent determination that turns on your operating history, your rental structure, and your filings.
I am a licensed real estate broker, not a tax advisor or accountant. For your own situation — especially if you did run short-term rentals at real length and intensity — please consult a qualified tax advisor or accountant before listing, and rely on the written opinion of your tax advisor, lawyer or lender.
- Canada, Excise Tax Act, R.S.C. 1985, c. E-15 — s.123(1) definitions of residential complex, short-term accommodation, residential unit
- Excise Tax Act, Schedule V, Part I, s.2 — exempt supply by sale of a residential complex by a non-builder
- CRA Policy Statement P-053 — Application of all or Substantially all to Residential Complexes (90% administrative reading)
- CRA GST/HST Memorandum 19.2.1 — Residential Real Property-Sales
- CRA — GST/HST: which rate to charge (Ontario 13%)
Hst Rebate Complete Guide →Change of Use on Commercial Property: The HST Bill for a Sale That Never Happened →Title Insurance Power Of Sale Hst →The Ontario Selling Blueprint →
Frequently Asked Questions
I put my place on Airbnb occasionally over the past two years. Do I owe HST when I sell?
Usually not. Losing the exemption requires both limbs: the property must be hotel-like AND all or substantially all (CRA generally reads this as 90% or more) of the arrangements must be continuous stays under 60 days. An ordinary home you mostly lived in or rented long-term, with the odd short booking, generally stays a residential complex and keeps the Schedule V, Part I, s.2 exemption on sale. If your short-term use was intense, have a tax advisor review the facts before you list.
If the exemption really is lost, how is the 13% calculated?
13% is Ontario’s HST rate (5% federal GST + 8% provincial). Once a sale is characterized as a taxable supply, HST generally applies to the consideration (the sale price). Who has to collect or self-assess it, and whether input tax credits can offset part of it, depends on factors such as whether the parties are GST/HST registrants — all case-specific, so have a tax advisor run the numbers rather than acting on anything verbal.
Is the 60-day residential-complex test the same as the one-month short-term-accommodation rule?
No. Less than 60 days decides whether a property drops out of the “residential complex” definition (which affects the resale exemption). Less than one month is the separate s.123(1) definition of short-term accommodation, feeding different provisions such as certain credit and rebate rules. Two thresholds, two purposes — do not apply one to the other.
Can I just convert it back to a long-term rental or my home before selling, and be safe?
It is not that simple. Converting from commercial use back to residential use can itself trigger a change-of-use / deemed supply at fair market value (Excise Tax Act s.206–207 and related rules). So “convert back, then sell” is not a self-directed avoidance move; it is its own tax event. Have a tax advisor cost out the consequences in both directions before you act.
Is this the same as losing the new-housing rebate because of Airbnb?
No. This article is about the sale of an older home possibly losing its resale exemption because the property is no longer a residential complex. Losing the new residential rental property rebate (NRRP) because of short-term-rental use is a separate set of rules on the buy side, about rebate eligibility on new housing. Different scenario, different taxpayer position — keep them apart.
Arthur Zhao
Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · CLHMS & GUILD Elite · REAIS
VP & Branch Manager, Bay Street Group Inc.
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