The MRDT tax in BC is the Municipal and Regional District Tax, an accommodation tax of up to 3% that participating local governments in British Columbia charge on short-term stays to fund tourism marketing, programs, and projects. It sits on top of the province’s 8% Provincial Sales Tax on accommodation, appears as its own line on the guest’s invoice, and only applies in municipalities and regional districts that have opted into the program.1Province of British Columbia. Accommodation A provincial map of participating areas and their current rates is published by the Ministry of Finance.
What the Tax Pays For
MRDT revenue funds tourism marketing, programs, and projects in the community that collects it. Since Budget 2018, affordable housing has also been an allowable use, so some participating areas direct a portion of the revenue toward housing initiatives alongside tourism spending.2Destination BC. FAQ The authorized spending categories for each jurisdiction are set out in the Designated Accommodation Area Tax Regulation.
Where It Applies and at What Rate
The MRDT is charged only in designated accommodation areas. Within those areas, it applies to short-term stays sold by hotels, motels, resorts, bed and breakfasts, and short-term rentals listed on online platforms. It is calculated on the purchase price of the stay before other taxes.1Province of British Columbia. Accommodation
The rate is capped at 3%. Some participating areas charge 2%, others charge the full 3%, and rates can change as local governments apply to Destination BC for adjustments.1Province of British Columbia. Accommodation Check the current rate for the specific property’s location before quoting a total to a guest or filing a return.
Vancouver’s Extra 2.5%
Vancouver carries an added layer. From February 1, 2023 through January 31, 2030, a temporary 2.5% Major Events MRDT applies to short-term accommodation in the city, on top of the 8% PST and the 3% MRDT. Each tax must appear as a separate line item on the invoice.1Province of British Columbia. Accommodation The combined accommodation tax rate in Vancouver during this period is 13.5% before GST, and the Major Events portion has its own reporting line on the MRDT return.
When the MRDT Does Not Apply
Several categories of accommodation fall outside both the MRDT and the PST on accommodation. The three that come up most often:
- Stays of 27 continuous days or more to the same person. Long-term and extended-stay arrangements are exempt because the tax is designed for short-term visitors.1Province of British Columbia. Accommodation
- Low-cost accommodation priced at $30 per day or $210 per week or less. This exemption is conditional: it only applies when the accommodation is not listed on an online marketplace platform. A $25-per-night room offered through Airbnb is still taxable.1Province of British Columbia. Accommodation
- Accommodation in hospitals, assisted living residences, and long-term care facilities.
The platform carve-out on the low-cost exemption trips up many casual hosts. A property that would qualify as exempt on price alone loses that status the moment it appears on a marketplace platform.
Selling Through Airbnb, Vrbo, or Another Platform
If you sell short-term accommodation only through an online marketplace facilitator, the platform is generally required to register, collect, and remit both PST and MRDT for you. You don’t need to register separately in that case. You do, however, remain jointly liable for any PST and MRDT the platform fails to collect and remit.1Province of British Columbia. Accommodation
If you sell through a platform and through other channels — your own website, phone bookings, walk-ins — you must register and collect PST and MRDT yourself on the non-platform sales. The platform handles only the transactions that flow through its system.1Province of British Columbia. Accommodation Because of the joint liability, keeping your own booking records is worthwhile even when a platform is doing the collecting.
Registering and Filing
There is no separate MRDT registration. If you sell accommodation in a participating area, your PST registration number is your MRDT number, and you register online through the province’s PST registration process.1Province of British Columbia. Accommodation The property address you provide determines which designated accommodation area the tax flows to.
Returns are filed through the eTaxBC online portal, and your MRDT reporting period matches your PST reporting period.3Province of British Columbia. Reporting and Paying PST If you haven’t signed up for eTaxBC, a paper return arrives by mail at the end of each period, though filing electronically is faster and lets you consolidate multiple MRDT locations on one return. The return and payment must be received on or before the last day of the month following the end of the reporting period, and a nil return is required for any period with no sales.4Province of British Columbia. Guide to Completing the Municipal and Regional District Tax (MRDT) Return
What Late or Unremitted Tax Costs
The Ministry of Finance applies formula-based penalties for late or unfiled MRDT returns. A first-time late filing draws 5% of the unpaid amount plus 1% for each complete month the return remains outstanding, up to 12 months. For filers with a pattern of late filings, the penalty doubles to 10% plus 2% per month, up to 20 months.5Province of British Columbia. CTB 005 – Penalties and Interest
Additional penalties apply based on conduct:
- 10% when you were previously notified of an error, such as failing to collect or remit tax properly, and you make the same mistake again.
- 25% when there is evidence of willful evasion, gross negligence, or fraud.
- 100% when you collected the tax from guests and willfully did not remit it to the government.
Interest compounds monthly on late payments, underpayments, and assessed amounts.5Province of British Columbia. CTB 005 – Penalties and Interest The 100% penalty on collected-but-not-remitted tax is the province’s harshest response, and it applies specifically to money already paid by guests that never reached the Ministry.