If your average Airbnb booking is under 30 days, the CRA treats you as a business owner. Over 30 days, you’re a landlord. That single threshold changes which form you file, whether you owe CPP, and whether GST/HST applies. Get it wrong and you’re either overpaying or filing incorrectly.
The 30-day rule: business income vs. rental income
Look at your bookings from the tax year. Calculate the average stay length across all reservations.
Average stay under 30 days? You report on Form T2125 (Statement of Business Activities). This is business income. You’ll owe both halves of CPP (the employee and employer portions) on your net earnings. GST/HST rules apply. The CRA views you the same way it views someone running a hotel.
Average stay 30 days or more? You report on Form T776 (Statement of Real Estate Rentals). This is rental income. No CPP. No GST/HST. Different deduction rules.
Most Airbnb hosts fall into the under-30-day category. If you’re listing on Airbnb and VRBO with typical weekend or week-long stays, you’re almost certainly filing a T2125.
Your document checklist before you start
Don’t sit down to file without these:
- T4 slips from any day job (you’ll need these for your T1)
- Airbnb/VRBO annual earnings summary. Download from each platform’s tax section. Cross-check against your own records; platform summaries sometimes miss adjustments or refunds
- Mortgage statement showing interest paid (not principal; more on this below)
- Property tax bill for the year
- Home insurance policy plus any short-term rental rider. If you added STR-specific coverage, that’s fully deductible against rental income
- Utility bills: hydro, gas, water, internet
- Receipts for repairs, supplies, and cleaning. Anything you spent to maintain the rental space
- Your municipal STR licence number. This matters more than you think (see Section 67.7 below)
Filing a T4 and T2125 on the same return
If you have a day job and run a short-term rental, both go on the same T1 personal tax return. Your employer reports your salary on a T4. Your Airbnb income goes on the T2125.
On your employment income, your employer pays half your CPP and you pay half. On your self-employed Airbnb income, you pay both halves, roughly 11.9% of net self-employment earnings (combining CPP and CPP2 for 2026). That’s on top of income tax.
This catches a lot of hosts off guard. If you netted $20,000 from Airbnb after expenses, budget around $2,380 just for CPP on that amount, separate from whatever tax bracket you’re in.
GST/HST: short-term only
Short-term rentals (under 30 days) are taxable supplies for GST/HST purposes. If your total taxable revenue from all sources exceeds $30,000 in any rolling 12-month period, you must register for a GST/HST number and start collecting tax from guests.
This includes revenue from your day job if it’s also self-employed income. If you drive for Uber and host on Airbnb, both count toward the $30,000 threshold.
Long-term rentals (30 days or more) are exempt. No GST/HST registration required, no collection, no remittance. This is one of the genuine advantages of the long-term classification.
If you’re close to the $30,000 mark, track it monthly. The CRA doesn’t care about calendar years for this threshold. It’s any 12-month window.
Section 67.7: no licence, no deductions
This is the rule that ruins people. If your city or municipality requires a short-term rental licence and you don’t have one, Section 67.7 of the Income Tax Act denies all of your rental deductions. Not some of them. All of them.
You’d still report the income. You just can’t deduct a single dollar of expenses against it. Mortgage interest, property tax, insurance, cleaning, repairs: all gone.
Toronto, Vancouver, Montreal, and Ottawa all require STR licences. Many smaller municipalities have added requirements in the last two years. Check your local bylaws. If a licence is required, get one before filing. If you operated without one, talk to an accountant about your options before submitting your return.
What you can actually deduct
Mortgage interest (not principal). Your monthly mortgage payment includes both interest and principal repayment. Only the interest portion is deductible. Your lender’s annual statement breaks this out. If you use 25% of your home for Airbnb, you deduct 25% of the interest paid that year.
Property tax, insurance, and utilities (prorated). Same idea. Calculate the percentage of your home used for the rental, then apply that to each expense. If you rent one bedroom in a four-bedroom house, that’s roughly 25%. Adjust for shared spaces like kitchens and bathrooms if guests use them.
Repairs vs. capital improvements. A new coat of paint or fixing a leaky faucet? That’s a repair, fully deductible in the year you paid for it (prorated to rental use). A new roof, a bathroom renovation, or new appliances? Those are capital improvements. You claim them over several years through CCA (Capital Cost Allowance), not all at once.
Airbnb and VRBO service fees. The platform fees deducted from your payouts are 100% deductible, no proration needed. These are a direct cost of earning that income.
Cleaning and supplies. Professional cleaning between guests, linens, toiletries, welcome baskets. All deductible at 100% if used exclusively for the rental.
Deadlines for 2025 tax year
Two dates to know:
June 15, 2026 is the filing deadline if you or your spouse earned self-employment income. This applies to T2125 filers (short-term hosts). If you file on T776 only, your deadline is April 30.
April 30, 2026 is the payment deadline for everyone, regardless of filing deadline. Even if you don’t have to file until June 15, any tax owing is due April 30. Interest starts accumulating the next day.
The mistake people make: assuming the June 15 deadline means they can also pay late. You can’t. File by June 15, but pay by April 30.
Let Accountly handle the routing
Accountly imports your Airbnb and VRBO earnings directly, identifies whether your average booking length falls under or over the 30-day threshold, and routes your income to the right form (T2125 or T776). It prorates your deductions based on rental-use percentage and flags anything that looks like a capital improvement versus a repair.
If you’re a gig worker across multiple platforms, everything rolls into one view.
Frequently asked questions
Do I report Airbnb income if I only made a few hundred dollars?
Yes. The CRA requires you to report all self-employment and rental income regardless of the amount. There’s no minimum threshold. Even $200 from a single weekend booking needs to be on your return.
Can I split my Airbnb income with my spouse?
Only if you both genuinely co-own the property and share in the rental operation. You can’t just assign income to a lower-earning spouse to reduce tax. The CRA’s attribution rules apply, and they audit this.
What if some bookings were under 30 days and some were over?
You use the average across all bookings for the year. If you had 20 bookings averaging 12 days and 5 bookings averaging 45 days, your overall average determines the classification. In practice, if you’re listed on Airbnb with standard nightly rates, your average is almost always under 30 days.
Does the 30-day rule apply per property or across all properties?
Per property. If you rent one condo short-term and another long-term, the condo goes on T2125 and the other goes on T776. You can have both forms on the same tax return.
I forgot to get an STR licence last year. Can I still claim deductions?
Section 67.7 is clear: if a licence was required and you didn’t have one, deductions are denied for that period. Some hosts apply for a licence retroactively and amend their return, but this depends on your municipality. Talk to a tax professional before filing. The stakes (losing every deduction on the property) are too high to guess.
How do I calculate the rental-use percentage of my home?
Measure the square footage of the space exclusively used for guests, then divide by your home’s total square footage. If guests also use shared areas (kitchen, living room, bathroom), you can include a reasonable portion of those spaces. Document your calculation in case the CRA asks. A simple floor plan with measurements is enough.
The information in this guide is for general informational purposes only and is not intended as accounting, tax, business, or legal advice. Accountly does not provide professional services or act as your accountant, tax advisor, or lawyer. No client relationship is created by your use of this material. Always seek advice from qualified professionals who understand your particular circumstances before acting on any information contained herein.
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