Airbnb changes have Ottawa hosts facing new tax reality

Ottawa's Hong Zhang says he's never tried to hide his Airbnb income from the Canada Revenue Agency though he knows peoplewho have.

Zhang, 32, and his wife are among the estimated 11,000 Ontarians who rent out rooms, apartments and other spaces through Airbnb.

And they'll soon going to be getting an important reminder from the company: report your income.

On Friday, OntarioFinance Minister CharlesSousaandAirbnbjointly announced a new pilot project, designed toraise awareness about homeowners' and consumers' rights along withthe obligation for people earning Airbnb incometopay their taxes.

"You hear the nightmare stories of homes getting trashed so you don't want that side of it," Zhang said, adding he always uses Airbnb's internal payment system to remain eligible for the company's insurance protection.

Still, he said hehas friends who have acceptedAirbnbpayments "under the table."

Tax season notifications

The new agreement means Airbnb will begin sending its hostsemail notifications during tax season about their obligation to declare income earnedrenting their accommodations.

Sousa said many of those renters are young people and not all of them are declaring the income

"What we want is to ensure we take advantage and harness this innovation and use it for the benefit of all Ontario," Sousa said.

Sousa admittedthe changes enabled by technology are disrupting existing business models like the hotel industry, which says itslosing money to Airbnb but Ontario wants to embrace those changes.

"My children have used it. And I have three of them, and they travel. My young staff are explaining, telling me, 'Minister, get on with it,'" he said.

"This is here.These technologies may be disruptive but they also offer a great opportunity and benefit."

Sousa couldn't say when the government would introduce regulations to cover similar services like ride-hailing service Uber, whose emergence has led to protests by taxi drivers across Canada.

However, the new economy represented by businesses like Airbnb and Uberhas "significant potential to create jobs and drive growth, productivity and innovation," he added.

Average monthly income about $280

AaronZifkin, the company's Canadian manager, said the average Ontario host rents out their accommodations 40 times per year and earns about $280 each month.

"This is all about ordinary people having really clear, and sensible up-to-date regulations for this occasional activity," Zifkin said.

As for Zhang, he said he's happy the rules around reporting income are being clarified and that the province is treating Airbnb like a viable company.

"I think it's great that the government is more or less acknowledging it now and not just hoping it goes away, and we're being more progressive with our thoughts about it," he said.

Airbnb was founded in 2008 by three friends with air mattresses for rent. The company now lists two million properties for rent in 191 countries.