Quebec reaches lodging tax deal with Airbnb | Hacker News Reader

Quebec reaches lodging tax deal with Airbnb

cbc.ca

80 pointsqazwse_60 comments

The "one host, one home" deal is a much better way to deal with the downsides of Airbnb: https://www.thestar.com/news/city_hall/2017/06/19/toronto-to...

This seems like an actual reasonable solution to the problem that makes most people happy. Where is this sanity coming from?

Canada.

A concern I haven't seen raised as much with AirBnb is the erosion of communities. It is ironic that tourists wish to visit cities for their culture (Berlin, Amsterdam etc.) but that by removing housing stock, there will be fewer and fewer locals left, for example in Edinburgh's grassmarket, entire tenements are now short term lets. Cities then just become pretty museums.

I mean, is this so bad? It also implies novel communities are forming elsewhere; perhaps you're viewing this from a perspective on the past when the one on the future may be more relevant.

I say this as someone who hates AirBnB and high rent prices in cities.

I would like this to be true, but I cant think of anything that could replace the city for jobs and opportunities. Do you have any examples of this? And of course as soon as an alternative cultural center pops up, rent seeking will follow...

The community that get uprooted from one neighbourhood doesn't reform in a new sui generis neighbourhood in the city to reconstitute itself whole; its members get scattered across the city. In Toronto's Kensington Market neighbourhood, in a 5 by 5 street area, there are somewhere around 250 airbnb units available, and the area is turning from a traditional market into a bar and restaurant area. The residents are pushed away and the local merchants are pushed away.

Is Kensington really getting that bad? I haven't been down there in a little while, but my girlfriend still seemed to think it was going well there. She rarely goes herself, though.

That said I rent long-term (nearing a 1/2 years) in Liberty Village (Ha! I cannot afford to buy in this city) and my building seems to be half Airbnb units. I run into more people with luggage coming and going than I see actual residents. The faces are always changing except for the smallest set...

The neighbourhood is still a lot of fun, but there are fewer merchants now then when I moved to Toronto in the early 2000s. There used to be 3 fishmongers, now there is only one; there's about 3 produce stores left, there used to be many more. A bunch of knick knack stores have closed. Back when I moved here, there were two (!) separate anarchist spaces; there hasn't been any in years now. On the upside, it's becoming the veg*n restaurant quarter of the city...

This development is probably unrelated to AirBnB. People go to big supermarkets or shop online instead of going to specialised merchants (e.g. fishmongers). Small stores have been dying since a decade in most European and North American cities.

It's funny you bring that up, though. Farmer's markets have, on the other hand, seen a recent surge -- possibly even correlating with the decline of smaller produce, dairy, and other vendors. There's one at least once a week in every neighbourhood just about (still speaking Toronto).

Doesn't this rule defray most of the likely causes of housing stock removing/conversion?

If only primary residences can be let within a city... I fail to see how entire apartments are short term lets.

Well, the Quebec government will receive increased tax revenues, but I dont see how that can be used to offset the erosion of community / loss of housing stock.

As for only primary residences being let, Im not sure what you mean - in my city at least entire flats are regularly rented out, for short periods of time over the entire year.

They just sent an email to their customers in Québec and they specify they will not share reservation and owner details to the government, only a summary per region per month.

So the is no extra power to Revenu Québec to find out you don't report all your earnings.

The fact they sent (french) :

Partagerez-vous mes informations personnelles lors du versement de la taxe ? Non. Nous remplirons une déclaration fiscale par région, qui indiquera le montant total des revenus issus de l'ensemble des réservations Airbnb effectuées dans la zone en question. Autrement dit, tous les hôtes seront représentés par un même montant, et nous ne fournirons pas vos informations personnelles sur la déclaration.

Merci.

Background: I am the founder of the rental largest housing site in NL (Kamernet.nl)

I believe that Spain (Barcelona, Ibiza) already have rules in place that limit the possibility of renting out accommodations and require a local license.

The first step for any locale is to establish policy and rules in this "new normal" situation where renting out property (and leveraging tourism) has become very easy and painless. Rules that are enforceable, with sanctions strong enough to limit abuse.

Next, the local governments should be in their right to ask for verifiable users of the platform, but equally of people who advertise in paper media. At the end of the day, a public db with some form of API should be set up by the local government. This db is freely (as in beer) accessible to all housing platforms to check that OAuth(SSN+property id+number of beds) indeed has a permit. Even a calendar could be added (in Amsterdam, the limit is 60 nights per year per house or host / not sure).

They did the same with Uber https://www.uber.com/en-CA/drive/montreal/get-started/tax-re...

The most interesting thing for me will be that we be that the governement (and maybe us too) will be able to know much more precisely how much Airbnb renting is going on in the province and possibly where & when too.

It's mostly a double-tax grab: 1st, the hospitality tax, and 2nd, when Revenue Québec goes after hosts' undeclared income. This will have the effect to dissuade the small hosts due to government harassment, while the larger hosts will pay the income tax and still make bank. Exactly the outcome that is undesirable.

> This will have the effect to dissuade the small hosts due to government harassment

If you consider following the law "government harassment", then your comment makes sense. But I'm pretty sure not declaring a commercial activity is illegal and not declaring revenue from that activity is called tax evasion, Airbnb or not.

I can barely see you up on that high horse. There are so many ways of making money that people don't report. Do you report the interest on your savings account? The idea that a person should feel a some sort of duty to report the money they made renting out their house for a few weekends a year is absurd -- and a government that goes after their citizens for such a pittance has missed the forest for the trees.

afaik, most people do report interest from savings account. In US, The bank sends a 1099-int to you and the IRS if interest earned>$10

In Canada the threshold is $50 for receiving a T5. You are, of course, still obligated to report it even if you don't get a form.

I actually do bother to look that stuff up each year, but I suspect that many Canadians do not if they don't receive a form.

> This will have the effect to dissuade the small hosts due to government harassment, while the larger hosts will pay the income tax and still make bank.

There is a provision where everything under 30kCAD/y isn't fully taxable. After 30k, you have to pay the taxes fully (including on the first 30k). So while there is some income taxes, the full VAT taxation isn't enforced (you can pay if you want, "of course"). So smaller hosts still have better margins than the bigger ones.

It's great to see local and state government coming to a sensible deal with AirBnB and also with Uber.

It should be a model for how to handle these things. Some light oversight and some tax, but not caving in to extant rent seekers like taxi plate owners and hotel chain owners.

I'm sorry, what? I get that Airbnb allows individuals to list their own properties but if we're being honest in a couple years the majority of Airbnb property owners are going to be precisely those existing rent seekers who have found a way to operate basically small expensive hotels in areas where commercial zoning is expensive.

It's really isn't going to change much in the long run. It's just a de-facto commercial zoning grant to all residential areas. It's going to decrease the pool of available properties for long-term residents and raise the rents for those residents because every property manager is going to have to decide whether they think they could make more money by renting to an individual long-term or by just perpetually listing on Airbnb.

This really isn't a victory for anybody but Airbnb and existing property managers.

wouldn't a halfway decent solution to this be to lower property tax, lessen zoning laws and fines, and otherwise do things that will bring down property/building prices?

This would allow those who currently rent to be able to buy land, put a manufactured or temporary lodging on that land, and live there legally and cheaply, compared to a traditional home in a densely populated area.

It seems in my opinion that supply is artificially constrained, and that is why Airbnb is so popular.

I disagree. People want to live in cities for the jobs and opportunities they offer. It is very difficult to increase the housing stock within cities even with the measures you list, this scarcity of housing is made worse because landlords buy up flats turning them into AirBnb properties, preventing people from living in them. This results in the hollowing out of cities so they become tourist resorts. Barcelona has had a particularly hard time with this.

It's quite possible. Look at Texas housing affordability. Then look at the growth in population. Texas has lots of jobs and affordable housing.

The Demographia Survey makes it clear. High restrictions to building. High cost.

http://www.demographia.com/dhi.pdf

I do see your perspective, as my solution would lead to sprawl, long commute times, and increasing difficulty to find work outside of the city center.

Unfortunately, while it is a solution to put more people into the city center, it becomes difficult to make sure that people who are purchasing property aren't doing it for rent-seeking.

I think this problem will be tough to enforce/fix.

I guess the only real solution is busting up office/industry centralization somehow!

You'd think if anyone could decentralise work, it would be silicon valley, yet I understand rents in that area are as high as anything in manhattan.

This is utterly wrong. Taxing property encourages efficient use and keeps speculative hoarding down which reduces prices.

Prices are set by credit, credit is set by the ability to service debt. Property taxes inhibit the ability to pay interest to banks on larger loans.

AirBnB is popular because they are illegally avoiding taxes which makes right now for an easy win for rentiers. People doing airBnB don't have a higher calling to supply temporary accommodation to the masses. They are doing it for the money. If they could make more juggling fruit they would. And they push up prices for families looking to live near schools.

edit: can't post below b/c HN hates people criticizing rentiers.

Terrible example. Texas in which Dallas resides has the highest property taxes. Texas taxes land not labour more than most states.

But then you've driven up the cost of the housing with tax.

AirBnB hosts are paying property taxes and if AirBnB drives up value it's driving up property tax.

Speculative hoarding only works if there is artificial scarcity driven by overly restrictive zoning. Speculating in Dallas hasn't resulted in high profits.

Actually, editing in response to your comments. It looks like high property taxes in conjunction with low zoning regulation works. And that AirBnB has little to do with housing prices generally.

That's an interesting point that comes out of this discussion.

Rather than calling people 'leeches' and other names perhaps reasonable discussion could help.

Higher taxes generally reduce property prices. As the carrying costs get higher, only those who can make efficient use of property (or who really want to live there) can justify the payments. In other words, it reduces the profits of income properties (be they long term rentals or short term rentals), which reduces the demand for the properties as a source of income, thus decreasing the cost (in spite of the higher taxes!) for people who want to live there. It also reduces speculative holding of property: again because the taxes paid while the speculator waits for prices to rise make it less likely that the speculator will profit, so they will go elsewhere looking for profits.

Since the 1950s, property taxes and home prices have rapidly outpaced inflation, wages have stagnated, and work remains centralized in high cost areas.

Many people can not afford 500-700k mortgages, 13k per year property tax, 5 types of income taxes (fed state nyc med ss), transportation costs, etc.

Maybe land is being used efficiently, but it sure isn't affordable in the NY NJ CT area.

Is the solution to that to say "sorry, we have higher bidders"...

... or "well we do have some unused land over there that we can rezone for free to allow you to put a temporary home on it"

Yup.

A few people get rich, the rest of us get screwed because the rent-seekers are eating up supply.

How about building more, if the demand exists? Yes, an actual dense city block, for instance.

Credit sets prices. Ask Ireland. Spain. Greece. Supply rocketed as did prices.

Simply adding more supply would be the perfect solution if creating new buildings was as easy as dropping one down in SimCity, but in real life there are physical factors (eg. number of available trades, build time) that limit the rate of supply creation. It is possible for demand side factors that cause spiking rent increases can keep up with the rate of supply creation.

It is frustrating for a city government and its residents to go through the multi year effort to approve and build a new, dense building and only to have the number of units that reach the market scaled back by Airbnb hotel companies or even worse, capital gains focused investors that simply leave the apartments empty.

Additionally Airbnb hosting investors negatively impact residents that may want to purchase homes in a city to live in, as they have to pay more due to competition with these investors that have access to higher rents via Airbnb. It is in these residents' best interests for the city to enact policies to discourage people from buying condos for exclusive Airbnb use.

And the vast number of consumers who get to get a cheaper place in many more areas than the could before.

Literally millions of people.

Saying that the only benefit of AirBnB goes to owners is like saying the only benefit of Ebay goes to sellers.

You hit the bigger problem that has made housing incredibly expensive in the Bay Area, London, Sydney and other places.

Overly restrictive Zoning.

Sometimes restrictive zoning exists for good reason.

For example I'm sure there is no interest from Montreal residents in tearing down Old Montreal and building taller, and denser buildings.

In such heritage areas Airbnb can have a real negative impact as tourist use can displace what would otherwise be a normal, functional neighbourhood.

"Consumers" who'll finally be able to consume Amsterdam's vibe, oblivious to the fact that it's become a big Disneyland since forever

"It's just a de-facto commercial zoning grant to all residential areas"

Sure, thats kinda what it is. I'd argue that this isn't a bad thing though.

The solution that cities should take is to try and lower the cost of commercial zones and commercial property.

Airbnb and similar companies exist because these things are expensive and there is an arbitrage opportunity.

The best solution is to make these things LESS expensive so that consumers can benefit.

These silly laws on zoning, ect are extremely detrimental to consumers and should be removed. Airbnb and friends are just helping us push the needle so that these terrible laws are either eliminated or rendered de-facto unenforceable.

If you think rent prices are too high, then let's make the government allow us to build more houses, so as to solve the root of the problem.

I agree with you, just check out this map of all the leeches:

http://insideairbnb.com/montreal/?neighbourhood=C%C3%B4te-de...

And this is not even central. Hopefully they all get their fingers badly burned when rates rise, this tax comes in and equity drops.

I'm very disappointed to hear this. Quebec is one of the last places in the Western world where rentiers have a hard time.

Also for people saying these are "for a few weekends".

Many AirBnb are not "a few weekends" they are a second home bought / mortgaged for the express purpose of permanently letting in out on airbnb and not paying tax.

Here you go: http://www.cbc.ca/news/canada/montreal/quebec-airbnb-law-not...

You think the solution to high rent prices is to reduce the number of renters and restrict the supply of properties available for rent?

Someone wasn't paying attention in econ class.

Econ 101 sucks. But you contradict yourself as econ 101 always states supply and demand.

AirBnb is for short-term rentals only. It does not target people in Montreal looking for 12 month rolling tenancies. But it does reduce supply as landlords move from supplying 12 month places to airbnb.

If we made life harder for airbnb supply would go up of rentals for families. Or landlords would sell up reducing prices and allowing families who presently rent to buy.

Yes there are some people on hacker news who just want to get their 200k and not have to worry about commitment. I don't care about them, they can sort themselves out. I want access for families to local schools.

The people offering this "service" just want to make a quick buck for very little work. They bring nothing to the community and make life harder for many families.

> Econ 101 sucks.

> But you contradict yourself as econ 101 always states supply and demand.

Your sentence is incomprehensible. Please explain how I'm contradicting myself.

> AirBnb is for short-term rentals only. It does not target people in Montreal looking for 12 month rolling tenancies. But it does reduce supply as landlords move from supplying 12 month places to airbnb. If we made life harder for airbnb supply would go up of rentals for families. Or landlords would sell up reducing prices and allowing families who presently rent to buy.

Why should we favor 12-month rentees at the expense of the rest of society, to the point of forcing everyone else out?

> They bring nothing to the community and make life harder for many families.

I know right? They've brought absolutely nothing of value to the millions of customers who use their service. That's why they keep using it, of course!

There's a great irony in calling renters "leeches" while trying to forcibly interfere between them and their customers to get a bigger cut of the transaction.

They are leeches and we should tax rentiers. Tax them out of existence. Or as near as we can get.

As Keynes said the euthanasia of the rentier, the functionless "investor" is to be welcomed.

edit: to the poster below

Many airbnb are not people "renting on a weekend when they go on holiday". It's a mini hotel. The former I don't mind, the latter should be taxed out of existence.

Your comment about groceries is dire. Production of food is elastic. Production of land is not. Taxing those who simply try to be middle men to be, yes, a rentier is a good thing. Not to take a cut but to get rid of them.

So many bad comments on HN that fail to understand elasticity and how prices are set. I'm off.

Uh... Keynes never said we should tax people who rent their homes out of existence. That idea is quite nonsensical and counterproductive from an economic point of view. It's like saying we should tax groceries out of existence to reduce food prices.

Keynes did actually say the rentier class should be liquidated. The landlord is the ideal rentier. A grocer is not necessarily a rentier, they add value by providing a service. Rental income is purely a privilege of ownership, received due to a granted title, similar to patent and copyright.

It's okay he's writing on hacker news, where economics goes to die.

I'll repeat what I said: Keynes never said we should tax people who rent their homes 'out of existence'. To imply otherwise is disingenuous.

I find it bizarre that you think renting out your home doesn't count as a 'service'. It certainly is a service by any reasonable definition of the word (including the one economists use).

> Many airbnb are not people "renting on a weekend when they go on holiday". It's a mini hotel. The former I don't mind, the latter should be taxed out of existence.

1. What percentage of Airbnb users belong to each category? Why do you ignore the former and hope 'they all get their fingers badly burned when rates rise'?

2. You still have provided no argument as to why the latter should be 'taxed out of existence'.

> Your comment about groceries is dire. Production of food is elastic. Production of land is not.

This is irrelevant to the point you and I were discussing, namely, that restricting the supply of something will not magically lower its price. It works just as well with any other supply-inelastic good or service.

> Taxing those who simply try to be middle men to be, yes, a rentier is a good thing.

Can you clarify what you mean by 'those who simply try to be middle men'?

> So many bad comments on HN that fail to understand elasticity and how prices are set. I'm off.

1. It's a bit ironic for you to make this accusation when you're literally advocating for taxing an entire economic sector 'out of existence'.

2. I made no comments about elasticity of supply. You did.

"This really isn't a victory for anybody but Airbnb and existing property managers."

And the millions of people who use the service.

This is simply great!

It means Air BnB can scale even more, take savvy incorporated entrepreneurs in the field for example. They can even pretend to be a private home holders.. Now it is all in the books, reported and regulated.

Now it is the opportunity for an Airbnb competitor to appear. I can only hope that.

Holiday cottages have been rentable for decades - my family used to get brochures for them in the 80s, we stayed in Cornish villages for 2 weeks a year when we had the dogs.

These still continue - I used cottages.com to rent a cottage in Wales last week. That tourism is what drives the local economy.

Sites like that (others are available) have city locations too, I've used similar sites to book in Rome and Berlin

Air bnb's key feature, like uber, is its global reach. I've used uber on 6 continents because it's always the same. I don't use it in some locations due to safety considerations, but in most cities it's far easier and nicer (compare an uber with a manhattan cab where you are force fed adverts and have to "tip" a driver who probably won't even take a credit card.

I've never risked airbnb stay though - came close when I spent a month in singapore, but too many horror stories, and I had my family with me. Didn't want to have the police evicting us in the middle of the night 2 weeks in, found a proper managed appartment. Singapore really doesn't like airbnb as most housing is government owned (to keep prices affordable), and you have to be a citizen to live there. Prevents the country turning into something horrible like Dubai.

Why is Quebec always doing things differently?

- Airbnb and Uber hostility

- Dairy cartel

- Language police

- World Nomads (travel insurance) exclusion

- Contests exclusion

- Worst ER wait times

- ...

I would assume the French influence. Difference between common law and a civil code.

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