Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Marginal note:Definitions

• 67.7 (1) The following definitions apply in this section.

  non-compliant amount

  non-compliant amount, for a taxation year, means the amount determined by the formula

  A × B ÷ C

  where

  A

  is the total of all amounts that would, if subsection (2) did not apply, be deductible in computing income in the taxation year in respect of the use of a residential property as a short-term rental in the taxation year;

  B

  is the number of days in the taxation year that the residential property was a non-compliant short-term rental; and

  C

  is the number of days in the taxation year that the residential property was a short-term rental. (montant non conforme)

  non-compliant short-term rental

  non-compliant short-term rental means, at any time, a short-term rental that is located in a province or municipality that, at that time,

  • (a) does not permit the operation of the short-term rental at the location of the short-term rental; or

  • (b) requires registration, a licence or a permit to operate the short-term rental, and the short-term rental does not comply with all applicable registration, licensing and permit requirements. (location à court terme non conforme)

  residential property

  residential property means all or any part of a house, apartment, condominium unit, cottage, mobile home, trailer, houseboat or other property, located in Canada, the use of which is permitted for residential purposes under applicable law. (bien résidentiel)

  short-term rental

  short-term rental means a residential property that is rented or offered for rent for a period of less than 90 consecutive days. (location à court terme)

• Marginal note:Non-deductibility of expenses — short-term rental

  (2) Notwithstanding any other provision of this Act, no amount is deductible in computing income in respect of a short-term rental for a taxation year, to the extent the amount is a non-compliant amount for the taxation year.

• Marginal note:Deemed compliance

  (3) For the purposes of subsection (1), a short-term rental of a person or partnership is deemed not to be a non-compliant short-term rental for the 2024 taxation year of the person or partnership if

  • (a) the short-term rental is located in a province or municipality that requires registration, a licence or a permit to operate as a short-term rental; and

  • (b) the short-term rental complies with all applicable registration, licensing and permit requirements by December 31, 2024.

• Marginal note:Reassessments

  (4) Notwithstanding subsections 152(4) to (5), the Minister may make any assessments, reassessments and additional assessments of tax, interest and penalties and any determinations and redeterminations that are necessary to give effect to subsection (2) for any taxation year.