The hotel tax in Ontario has two layers: the 13% Harmonized Sales Tax that applies province-wide, and a Municipal Accommodation Tax set by each city that runs from 4% to 8.5%. Add them together and a single night’s room rate carries roughly 17% to 21.5% in tax, depending on where you’re staying. Both taxes apply to short-term stays of fewer than 30 consecutive nights and cover hotels, motels, bed-and-breakfasts, cottages, and rentals booked through platforms like Airbnb and Vrbo.
The 13% HST
Ontario’s Harmonized Sales Tax combines the 5% federal GST with an 8% provincial component into a single 13% charge. It applies to any accommodation booked for fewer than 30 consecutive days in a residential unit or room.1Canada Revenue Agency. GST/HST Information for the Travel and Convention Industry
The 13% is calculated on the room rate alone, before ancillary charges like parking, minibar, or room service. Operators collect it from guests and remit it to the Canada Revenue Agency rather than the province. An operator whose worldwide taxable supplies exceed $30,000 in a single calendar quarter or across four consecutive quarters must register for a GST/HST account and start collecting.2Canada Revenue Agency. When to Register for and Start Charging the GST/HST Below that threshold, registration is optional.
The Municipal Accommodation Tax
On top of the HST, most Ontario cities charge a Municipal Accommodation Tax on transient stays. Their authority comes from section 400.1 of the Municipal Act, 2001, which lets each municipality design its own version, including the rate and the accommodation types it covers.3Ontario.ca. O. Reg. 435/17 – Transient Accommodation Tax Toronto has separate authority under the City of Toronto Act, 2006. The MAT applies only to the room price, not to food, laundry, phone use, or other ancillary charges, and local bylaws require it to appear as a separate line item on your receipt.
Revenue typically funds local tourism marketing and community development.
Current MAT Rates by City
- Toronto: 8.5% through July 31, 2026, a temporary increase from the usual 6% under Bylaw 1259-2024.4City of Toronto. Municipal Accommodation Tax
- Ottawa: 6%, effective with the city’s 2026 budget.
- Mississauga, Barrie, Greater Sudbury, Sault Ste. Marie, Windsor: 6%.
- Kingston, London, Ajax, Thunder Bay, Brighton: 5%.
- Niagara Falls: flat per-night amounts based on hotel star rating, ranging from $4 to $7 per night.
- Other municipalities with a MAT: 4%.
Some Ontario cities have not adopted a MAT at all, so the only tax on the room is the 13% HST. Rates can shift with each municipal budget cycle, so confirm the current figure with the local finance office before relying on it.
Stays and Situations That Are Exempt
The most important carve-out is duration. A stay of 30 or more consecutive days in the same unit is exempt from HST on accommodation.1Canada Revenue Agency. GST/HST Information for the Travel and Convention Industry For the MAT, many municipalities set the cutoff at 28 consecutive days.
Common MAT exemptions across Ontario include:
- Accommodation supplied by a university, college, or other post-secondary institution to enrolled students.
- Stays in licensed hospitals, private hospitals, retirement homes, and hospices.
- Tent sites, trailer sites, and tourist camps.
- Lodging supplied by an employer to employees in premises the employer operates.
- Meeting or display rooms in a hotel that do not contain a bed.
The provincial regulation also prohibits municipalities from imposing the MAT on university or college accommodation used for educational purposes.3Ontario.ca. O. Reg. 435/17 – Transient Accommodation Tax Individual cities may add exemptions of their own, so the local bylaw is worth checking for anything unusual.
Who Collects the Tax on Airbnb and Vrbo
If you list a property on a booking platform and are not registered for GST/HST under the normal regime, the platform is required to collect and remit the 13% HST on your behalf.5Canada Revenue Agency. Platform-Based Short-Term Accommodation – GST/HST for Digital Economy Businesses Platforms registered under the simplified GST/HST regime collect only from guests who are not themselves registered for the normal GST/HST; platforms registered under the normal regime collect from all guests. Hosts already registered under the normal regime should give the platform their registration number so HST isn’t charged twice.
Many major platforms also collect and remit the MAT in cities where they have agreements with the local government. Coverage varies by platform and by municipality, and where the platform does not remit a particular tax, the host stays personally responsible for it.
Rebates for Foreign Convention Attendees
Foreign businesses running a convention in Ontario can recover much of the HST they pay. Sponsors and organizers of foreign conventions who are not registered for GST/HST can claim a rebate of 100% of the tax paid on convention facilities and related supplies, and 50% of the tax paid on food, beverages, and catering.6Government of Canada. GST/HST and QST Rebate for Sponsors of Foreign Conventions, Organizers of Foreign Conventions, and Non-Resident Exhibitors Non-resident exhibitors at either foreign or domestic conventions qualify for the same rebates on exhibition space rental and related supplies.
Transportation, entertainment such as city tours, and items sold separately from the admission fee (souvenirs, books) are not eligible. You also cannot claim a rebate if the Canadian supplier already credited the tax back to you. The rebate is filed directly with the CRA on the applicable rebate form.
Penalties for Operators Who Don’t Collect or Remit
Filing a GST/HST return late triggers a penalty of 1% of the unpaid amount plus 0.25% for each complete month the return stays outstanding, up to twelve months. A false statement or gross-negligence omission carries a penalty of the greater of $250 or 25% of the understated tax.7Department of Justice Canada. Excise Tax Act The CRA also charges compound daily interest on any outstanding balance from the day it was due.
Failing to collect or remit HST as required is also a criminal offence. It can result in a fine from $25 plus the uncollected tax up to $1,000 plus the uncollected tax, with imprisonment from thirty days to twelve months possible if the fine goes unpaid.7Department of Justice Canada. Excise Tax Act
Municipal penalties for late MAT are set city by city. Ottawa, for example, charges interest of 1.25% per month on the outstanding balance.8City of Ottawa. For Owners – Municipal Accommodation Tax Other municipalities set their own rates and may add administrative fines under their bylaws.