Technological advancement put us through a new sharing economy in which we share our property and services to generate extra income for living. This economy is becoming a bigger part of the general economy. Sharing economy arrangements are generally booked using online platforms through a third party, using a website or a software application.
The sharing economy can take a variety of forms, such as:
โขย ๐ accommodation sharing: renting out homes, rooms,
cottages
โขย ๐transportation: ride-sharing, rentals of bikes, boats
โขย ๐ฉspace rentals: gardens, desks, workspaces,
laboratories
โข making and selling goods: household goods, jewelry,
beauty products, food, meals
โข ๐จโ๐งproviding services: aesthetics services, animal care,
freelance professional expertise
๐ ๐๐๐๐จ๐ฆ๐ฆ๐จ๐๐๐ญ๐ข๐จ๐ง ๐๐ก๐๐ซ๐ข๐ง๐
Accommodation sharing is renting part or all of a property for a short period. It can include your primary residence or your secondary residence. It also includes any rentals facilitated by a third party, a website, or an app. Popular apps like ๐๐ข๐ซ๐๐ง๐, ๐๐ซ๐๐จ, ๐๐จ๐จ๐ค๐ข๐ง๐ .๐๐จ๐ฆ, ๐๐จ๐ฆ๐๐๐ฐ๐๐ฒ, ๐ ๐ฅ๐ข๐ฉ๐ค๐๐ฒ, ๐๐จ๐ฆ๐๐๐ญ๐๐ฒ ๐๐ญ๐. are example of Accommodation sharing.
๐ธ๐๐จ๐ฎ๐ซ ๐ญ๐๐ฑ ๐จ๐๐ฅ๐ข๐ ๐๐ญ๐ข๐จ๐ง๐ฌ
All money you receive as a result of an accommodation sharing arrangement is taxable for income tax purposes. This income should be reported as Rental Income. Another important thing also needs to be considered as there is a change of use of property or part of a property (for example, from using it personally to renting it out or vice versa), there could be tax consequences.
Besides GST/HST needs to be charged when the property or part of the property facilitate short term accommodation. However rentals of residential premises for periods of continuous occupancy of one month or more are exempt from GST/HST. GST/HST registration is required when the income is more than $30,000 in the subsequent four calendar quarter.
๐๐๐ฑ๐ฉ๐๐ง๐ฌ๐ ๐๐๐๐ฎ๐๐ญ๐ข๐จ๐ง
Any reasonable expenses you incur to earn rental income can be deducted. However, keep in mind only the rental part of the property’s associated expenses can be claimed. Expenses like Advertising, professional fees, accounting fees that are directly related to your business can be claimed 100%.
๐ต๏ธโโ๏ธ๐๐ก๐๐ญ ๐ก๐๐ฉ๐ฉ๐๐ง๐๐ ๐ข๐ ๐ฒ๐จ๐ฎ ๐๐ข๐ ๐ง๐จ๐ญ ๐ซ๐๐ฉ๐จ๐ซ๐ญ ๐ญ๐ก๐ข๐ฌ ๐ข๐ง๐๐จ๐ฆ๐??
If you under report or do not report your sales or income, you are participating in the underground economy and this could result in serious consequences. If you get caught evading tax, you may face fines, penalties, or even jail time, in addition to paying the taxes owing on unreported amounts.
For more information please contact us at ๐๐๐ ๐๐๐ ๐๐๐๐