Municipal Accommodation Tax (MAT)

Short-term accommodation rentals occur in dwelling types such as detached houses, townhouses, and apartment buildings and are operated by owner occupants, tenants, property investors and management companies. Short-term accommodation rentals are often listed on Internet platforms such as Airbnb, Homeaway, Vacation Rentals by Owner (VRBO), Craigslist and Kijiji.  Bed and Breakfasts operate from an operator's principal residence and would therefore be treated as a short-term rental.  

The Province of Ontario enacted the Transient Accommodation Regulation 436/17, which came into effect December 1, 2017 and provides the necessary provisions for municipalities across Ontario to implement a Municipal Accommodation Tax (MAT).  Municipal Council approved a mandatory four percent (4%) MAT for hotels and motels effective October 1, 2018. Short-term rentals were added to the by-law and are required to collect MAT effective October 1, 2022.

Rates

Hotels, motels and short-term accommodation rental providers must pay a 4% Municipal Accommodation Tax (MAT) to the City of London. MAT is payable on the purchase price of the room portion of rental accommodations.  Other services, including meeting room rentals, food and beverage, room services, internet and phone charges, etc., are excluded from the MAT provided that they are itemized separately on the invoice.

Exemptions

MAT does not apply to the following types of transient accommodations:

• Universities, colleges and school boards;
• The Crown and agencies of the Crown;
• Hospitals, long-term care homes and treatment centres;
• Lodging for reformation of offenders;
• Shelters for the relief of the poor or for emergency; and
• Every tent or trailer site supplied by a campground, tourist camp or trailer park.

For details on MAT exemptions, consult Section 3 of the MAT By-Law.

 

Interest and Penalties

1. Be payable monthly by the providers of transient accommodation. 
2. A fee, as prescribed by the Fees & Charges By-law A-52, shall be charged in respect of all remittances made by cheque that are not honoured by the financial institution.
3. Every person who contravenes any provision of the by-law is guilty of an offence and subject to fines. 

 

Audit and Inspections

1. Every Provider shall keep records, for no less than three years, with the necessary particulars of sales of accommodation, amount of the Municipal Accommodation Tax collected; and the remittances made to the tax collection agent.
2. The City Treasurer or designate or the City’s designated tax collection agent may inspect all records of Providers.
3. Every Provider shall furnish upon the demand of the City Treasurer or the City’s designated tax collection agent for reasonable inspection, copies of records required for the purposes of the administration and enforcement of the MAT by-law.

 

Within the City of London, a 4% Municipal Accommodation Tax (MAT) is currently applicable to hotels and motels.  The MAT is applied to all rooms used for rental accommodations provided for a continuous period of less than 30 nights.

Collecting the MAT

All guest invoices must include a separate line for the 4% Municipal Accommodation Tax (MAT), which applies to the room cost portion only.  Other guest services such as meeting rooms, food and beverage, room services, internet and phone charges, are excluded from the tax, provided they are itemized separately on the invoice.

The HST is applicable to the funds received from the Municipal Accommodation Tax if the business is an HST registrant.

 

Remitting the MAT

The Ontario Restaurant, Hotel and Motel Association (ORHMA), as the designated tax collection agent for hotels and motels for the City of London, will collect MAT on the City’s behalf.  The MAT fees collected must be remitted to ORHMA within 15 days after month’s end. Late remittances will be charged at a monthly rate of interest applicable to overdue property taxes

Providers of transient accommodation shall, on a monthly basis within 15 days of the end of each calendar month for the month prior, provide a monthly statement in the form required by the tax collection agent. These monthly statements shall include:

1. The number of rooms sold;
2. The purchase prices of the rooms sold;
3. The number of rooms that were exempt under the by-law and proof the Provider relied on; and,
4. The MAT collected.

 

Refunding the MAT

If the MAT was added to an invoice that was paid by a guest, and the guest was subsequently issued a full or partial refund on that accommodation charge, the guest should also be refunded the applicable amount of MAT that corresponds to the refund amount. If the refund occurs after the MAT has been remitted, the MAT submission the following month can be adjusted noting the refund in the submission documentation.

If the guest does not show and the establishment’s policy is to charge a portion of the room rental as a penalty, then the MAT should also be charged to the no show portion. Alternatively, if the establishment’s policy is to charge a flat administrative fee for no shows regardless of the room rate, then the MAT is not applied.

 

 

Municipal Council for the City of London approved a mandatory 4% Municipal Accommodation Tax (MAT). Effective October 1, 2022, this is applicable to guests staying in hotels, motels and short-term rentals in the City of London must pay the 4% MAT.

The revenue from MAT is allocated 50% to Tourism London to support the tourism industry and 50% to the City of London to fund programs and services that support visitors to the City.

 

Application of the MAT

The MAT is applied to all rooms used for rental accommodations provided for a continuous period of less than 30 nights. 

The MAT applies to the room cost portion only. Other guest services such as meeting rooms, food and beverage, room services, internet and phone charges, are excluded from the tax, provided they are itemized separately on the invoice.

The HST is charged on the Municipal Accommodation Tax if the business is an HST registrant.

 

Paying the MAT

All guest invoices will include a separate line for the 4% Municipal Accommodation Tax (MAT), which applies to the room cost portion only.  Other guest services such as meeting rooms, food and beverage, room services, internet and phone charges, are excluded from the tax, provided they are itemized separately on the invoice.

 

Refunds

If the MAT was added to an invoice that was paid by a guest, and the guest was subsequently issued a full or partial refund on that accommodation charge, the guest should also be refunded the applicable amount of MAT that corresponds to the refund amount.

If the guest does not show and the establishment’s policy is to charge a portion of the room rental as a penalty, then the MAT should also be charged to the no show portion. Alternatively, if the establishment’s policy is to charge a flat administrative fee for no shows regardless of the room rate, then the MAT is not applied.