Sharing economy

The sharing economy refers to individuals and businesses who use or share their assets through third-party digital platforms to earn income. It includes commercial ridesharing and accommodation sharing, among other activities. This page provides tax information for individuals earning self-employment income or rental income through the sharing economy.

On this page

• Commercial ridesharing
  • Income tax
  • GST/HST
• Accommodation sharing
  • Income tax
  • GST/HST
  • Changes in use of property
• Quebec residents

Commercial ridesharing

Commercial ridesharing is an arrangement where the driver of a vehicle provides passenger transportation services to customers, facilitated by a mobile app or website. Commonly used commercial ridesharing apps include Lyft and Uber.

Income tax obligations for commercial ridesharing

Regardless of how much time you spend driving your vehicle for fares, you must:

1. Report all income, including tips, that you earn from driving your vehicle for commercial ridesharing purposes on your income tax and benefit return. You may claim expenses for any charges that the digital platform keeps
2. Complete Form T2125, Statement of Business or Professional Activities, or T2 Schedule 125, if you are operating an incorporated business, and file it with your return
   • if you drive a limousine, use industry code “Limousine service” (485320)
   • for all other automobiles, use industry code “Taxi service” (485310)

• Line 26000 – Taxable income
• Form T2125 Statement of Business or Professional Activities
• How to fill in Form T2125
• T2SCH125 Income Statement Information

GST/HST obligations for commericial ridesharing

The goods and services tax / harmonized sales tax (GST/HST) applies to all commercial ridesharing fares. You must register for a GST/HST account the moment you start earning money from commercial ridesharing services. You must charge, collect and remit (send) the GST/HST to the Canada Revenue Agency (CRA) if you earn any revenue from commercial ridesharing services regardless of the amount earned. The $30,000 small supplier threshold does not apply for commercial ridesharing services.

Register for a GST/HST account

If you take part in commercial ridesharing, you might use a digital platform to collect your fares. It is still your responsibility to make sure that you charge and collect the GST/HST on all fares and remit (send) it to the CRA.

If you also have income from other taxable sales

If your combined taxable sales from commercial ridesharing services and other taxable sales is under $30,000, your mandatory GST/HST registration will generally only apply to your commercial ridesharing services unless you request otherwise. This means that you will not be required to charge the GST/HST on those other taxable sales, nor will you be entitled to claim input tax credits (ITCs) in relation to those sales.

If your combined taxable sales from commercial ridesharing services and other taxable sales is more than $30,000, your GST/HST registration will apply to your commercial ridesharing services and other taxable sales. You must collect and remit (send) the GST/HST to the CRA on all of your sales (not only on the commercial ridesharing income).

Claiming input tax credits for commercial ridesharing

The GST/HST that you pay on your expenses may qualify for an input tax credit (ITC).

For more information on input tax credits, go to Input tax credits

Accommodation sharing

Accommodation sharing is renting part or all of a property, typically for a short period of time, and is considered rental income. It can include your primary or secondary residence. It also includes any rentals facilitated by a third-party website or application. Common accommodation sharing platforms include AirBnB, FlipKey, VRBO, and Facebook Marketplace.

Income tax on accommodation sharing

All income you receive from an accommodation sharing arrangement is subject to income tax.

However, the CRA may consider this income to be either rental income from a property or self-employment business income. The type of income you earn affects how you report it on your tax return.

To determine which type your income is, consider the number and types of services you provide for your tenants.

In most cases, the CRA will consider your income to be rental income from property if you rent space and provide only basic services such as:

• heat
• utilities
• parking
• laundry facilities

However, your income may be considered to be self-employment business income if you provide other services to tenants, for example:

• meals
• security
• cleaning

The more services you offer, the greater the chance that income from your rental operation is considered business income.

For more information, go to Rental income or business income

Reporting rental income

To report and pay tax on rental income, including accommodation sharing via short-term rental platforms, complete your income tax and benefit return. Ensure lines 12599 and 12600 reflect your taxable rental income earned, and also complete Form T776, Statement of Real Estate Rentals. If you operate an incorporated business, complete the T2 corporation income tax return as well as Schedule 125, Income Statement Information.

• Line 26000 – Taxable income
• Form T2125, Statement of Business or Professional Activities
• How to fill in Form T2125
• Form T776, Statement of Real Estate Rentals
• How to fill in Form T776, Statement of Real Estate Rentals
• T2SCH125 Income Statement Information

Reporting self-employment business income from rental activities

If you provide other services to tenants, that portion of your income is considered to be self-employment income. You must report it on your income tax and benefit return, and also file Form T2125, Statement of Business or Professional Activities. If you operate an incorporated business, complete the T2 corporation income tax return as well as Schedule 125, Income Statement Information.

• Form T2125, Statement of Business or Professional Activities
• How to fill in Form T2125
• T2SCH125 Income Statement Information

Deducting rental expenses

It’s important to note that the new section 67.7 of the Income Tax Act denies deductions from income earned after 2023 from non-compliant short-term rentals.

A non-compliant short-term rental is a short-term rental that:

1. Is located in a province or municipality that does not permit short-term rentals to operate at that location; or
2. Does not comply with all applicable provincial or municipal operating, registration, licencing, and permit requirements for operating a short-term rental.

2024 Exception

If a short-term rental is compliant with all applicable provincial and municipal registration, licensing, and permit requirements by December 31, 2024, the short-term rental is considered compliant for the entire 2024 tax year. This rule only applies for 2024.

If you operate a compliant short-term rental, you can generally deduct any reasonable expenses you incur to earn rental income for the period during which the short-term rental was compliant. However, when you rent only part of a building, such as a room in your house, you can claim only the expenses that relate to the rented part of the building.

To calculate this amount, use a reasonable basis. For example, to split common costs, divide the area of the available rental space by the total area of your home. This will be the percentage of the total area that was rented. Multiply that amount by the percentage of days in a year that the space was rented, then by the total amount of the expense you are claiming.

We recommend that you keep detailed records of all rental income you earn and any expenses you incur to earn that income, because the CRA may ask to see them.

For more information, go to Expenses you can deduct.

New rules for short-term rentals came into effect on January 1, 2024. For more information, go to Changes to rules for eligible deductions from short-term rental income.

GST/HST obligations for accommodation sharing

Short-term accommodation is a rental with a period of continuous occupancy of less than one month. The GST/HST applies to short-term accommodations. Rentals of residential premises for periods of continuous occupancy of one month or more are exempt from the GST/HST.

GST/HST exemptions

Generally, if you earn more than $30,000 in gross revenue over four calendar quarters from accommodation sharing, you must register for, collect and remit (send) the GST/HST to the CRA.

If you have taxable sales from both accommodation and commercial ridesharing services, and the total is less than $30,000, you have to collect and remit GST/HST only on the commercial ridesharing services. However, you may choose to also collect and remit GST/HST on the accommodation sharing services. If the total taxable sales are more than $30,000, you have to collect and remit (send) the GST/HST to the CRA on both services.

You may choose to register for and collect the GST/HST even if you earn less than $30,000. This lets you take advantage of the related input tax credits (ITCs). These credits are prorated in the same way as expenses that are deducted for income tax. For information, go to Find out if you are eligible to claim ITCs.

Register for a GST/HST account

Changes in use of property

When you change the use of a property or part of a property (for example, from using it personally to renting it out or vice versa), there may be tax implications. For more information, go to Changes in use of property.

Quebec residents

Revenu Québec administers the GST and Quebec sales tax (QST) in the province of Quebec. For more information about GST and QST registration, go to Registering for the GST and QST.

If you participate in accommodation sharing and live in Quebec, consult the Revenu Québec brochure, Individuals and Rental Income for information on the tax treatment of income and expenses related to rental income. If your establishment is in Quebec, you may also have to register for the tax on lodging. For information, go to Registering for the Tax on Lodging.