If you run a short-term rental in Halifax, you must charge a 3% marketing levy on guest stays. This municipal fee applies to the nightly rate before tax and funds tourism initiatives in the region. Here's what you need to know:
- Who pays? Guests pay the levy, but you, as the host, are responsible for collecting it.
- How to calculate it: Multiply the nightly rate by 0.03, add HST to the total, and include the levy as a separate line on invoices.
- When to remit: Submit collected levies to the Halifax Regional Municipality by the 15th of each month. Even if you have no bookings, a zero report is required unless your bookings are exclusively handled by platforms like Airbnb or Vrbo.
Staying compliant means proper record-keeping, clear communication with guests, and timely remittance. Hosts using platforms like Airbnb may benefit from automated levy collection starting in late 2024. For direct bookings, you'll need to handle it yourself.
Who Pays the Levy
The 3% Marketing Levy is charged specifically on short-term accommodations. Operators are responsible for collecting this fee, which is added to the total amount paid by guests.
Responsibilities of Operators
Operators of short-term rentals are required to collect the 3% Marketing Levy on eligible bookings and remit it to the Halifax Regional Municipality. This fee must be added to the booking price, and guests should be informed about the additional charge before their booking is confirmed.
What Guests Need to Know
For short-term stays that qualify, the 3% levy is included in the total accommodation cost paid by guests.
Exemptions to the Levy
Bookings lasting more than 31 consecutive days are exempt from the 3% Marketing Levy [2]. If a stay exceeds 31 days, this fee does not apply.
Up next, discover how to calculate the levy and include it in your pricing strategy.
How to Calculate and Add the Levy
Adding Halifax's 3% Marketing Levy to your pricing is crucial for staying compliant while ensuring transparency with your guests. The process is straightforward, and getting it right can help avoid confusion and disputes.
Step-by-Step Calculation
The marketing levy is calculated as 3% of your nightly accommodation rate, before HST is applied. To find the levy amount, simply multiply your nightly rate by 0.03.
Let’s break it down with an example: If your nightly accommodation rate is $200.00, the 3% levy would amount to $6.00 (3% of $200.00). Next, calculate the 15% HST on the total of the accommodation rate plus the levy ($200.00 + $6.00 = $206.00). This gives you an HST amount of $30.90. The total cost for your guest would then be $236.90 per night ($200.00 for the accommodation, $6.00 for the levy, and $30.90 for HST) [1].
It’s important to calculate HST on the combined total of the accommodation price and levy. If you calculate HST only on the base rate, your totals will be incorrect.
For multi-night stays, simply multiply the per-night calculation by the number of nights.
Once you've calculated the levy, the next step is to include it in your pricing documents.
Adding the Levy to Your Pricing
To maintain transparency and comply with Halifax's requirements, the marketing levy must be listed as a separate line item on all invoices and receipts. This breakdown ensures guests understand exactly what they’re paying for.
Here’s how to structure your pricing documents:
- List the nightly accommodation charge.
- Include the marketing levy as a distinct line item.
- Show the HST calculated on the combined subtotal (accommodation + levy).
Additionally, update your booking confirmations to include a note explaining the levy. This proactive approach can help reduce misunderstandings or disputes.
Now, let’s look at how to manage the levy when offering bundled services.
Handling Bundled Services
If your offerings include packages that combine accommodation with extras like meals, cleaning, or activities, apply the 3% levy only to the accommodation portion of the package. Start by identifying the standalone cost of the accommodation.
For instance, if you sell a $300.00 package that includes $200.00 for accommodation and $100.00 for other services, calculate the levy only on the $200.00 accommodation portion. This results in a levy amount of $6.00.
It’s a good idea to clearly separate the accommodation cost from other services in your records. This distinction not only ensures accurate levy reporting but also helps if your calculations are ever reviewed during a municipal audit.
Some hosts prefer to price accommodation and additional services separately right from the start, adding any package discounts as line items. This method simplifies levy calculations and makes pricing more transparent for both guests and regulators.
When and How to Submit the Levy
Once you've collected the marketing levy, it’s important to submit it to the Halifax Regional Municipality by the specified deadline. Staying on top of these requirements ensures you avoid penalties and remain compliant with local regulations. Below, you'll find details on the remittance schedule, reporting process, and record-keeping best practices.
Monthly Payment Schedule
The Halifax Regional Municipality requires that all collected marketing levy amounts be submitted by the 15th of each month for the previous month's collections. This deadline applies no matter the amount collected.
"The monthly marketing levy must be remitted to the municipality via the online Monthly Marketing Levy Remittance Report by the 15th of each month following the collection of a marketing levy." – Halifax Regional Municipality [1]
Missing the deadline can lead to a $25 daily penalty and interest charges, as outlined in Administrative Order 14, Respecting Application of Interest Charges on Outstanding Accounts [1].
Even if you didn’t have any bookings during a given month, you’re still required to submit a Monthly Marketing Levy Remittance Report showing zero collections - unless all your accommodations are sold exclusively through an online platform [1].
Reporting and Payment Process
Understanding the reporting process is just as important as meeting the deadline. Before your first submission, contact 311 to obtain your mandatory account number. This number is essential for all remittance forms, as it links your payments to your tourism accommodation registration [1].
The municipality uses an online system for submitting the Monthly Marketing Levy Remittance Report. You’ll need to provide details such as:
- The total levy amounts collected
- Number of nights booked
- Total accommodation revenue for the reporting period
Payments can be made via cheque or electronic transfer. Follow the online instructions provided for these payment methods [1].
If you manage bookings from multiple sources, your reporting obligations depend on how payments are processed. For platforms like Airbnb, Misterb&b, and Seabright Cottage Rentals, the platform operators will collect and remit the levy for bookings and payments made on or after September 1, 2024. Similarly, for Vrbo, Expedia, and Booking.com, platform collection began on October 1, 2024 [1].
However, if you handle both platform bookings and direct bookings where you collect payment yourself, you’re only responsible for remitting the levy on the direct bookings. The platforms will automatically handle their portion.
Record-Keeping Requirements
Maintaining thorough records is crucial for compliance and audit purposes. Keep digital copies of invoices, guest payment confirmations, and remittance reports. These records should clearly separate accommodation charges from any additional services you offer, ensuring accurate levy calculations.
It’s also essential to track whether bookings were made through an online platform or directly with you to avoid double-paying the levy on platform-handled bookings.
The municipality may request these records during compliance checks, so it’s a good idea to organize them chronologically for easy access. Many hosts find that setting up a dedicated folder - whether digital or physical - helps streamline this process and reduces stress, especially during busy seasons.
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Compliance Tips for Short-Term Rental Hosts
If you're hosting short-term rentals in Halifax, staying on top of the city's 3% marketing levy is a must. Here’s how you can stay compliant and avoid unnecessary penalties.
Steps for Compliance
All registered accommodations in Halifax are required to collect and remit a 3% marketing levy [1]. Start by calling 311 to get your account number. When charging guests, list this levy as a separate line item to clearly show that the fee goes toward supporting local tourism.
Mark your calendar for the 15th of every month - that’s when your remittance report is due. Even if you didn’t have any bookings that month (unless all your accommodations are sold exclusively through online platforms), you still need to submit a report. Missing the deadline can cost you $25 per day in penalties, plus interest charges.
By following these steps, you’ll establish a solid foundation for managing your compliance responsibilities effectively.
How Casa Scotia Can Help
Managing compliance can feel overwhelming, but Casa Scotia offers services that simplify the process. Their tools and expertise make it easier to meet Halifax’s requirements without the stress.
For starters, their dynamic pricing tools automatically include the marketing levy in your rates, saving you from manual calculations and reducing the chance of errors. Casa Scotia also keeps up with Halifax Regional Municipality regulations, ensuring your properties remain compliant. They handle everything from maintaining your registration to submitting reports on time and calculating levies accurately.
Their owner portal is another great feature. It gives you real-time updates on your marketing levy collections and remittances, along with detailed monthly reports that separate accommodation revenue from levy amounts. This transparency makes tracking your compliance efforts much easier.
On top of that, Casa Scotia provides professional guest communication. From the moment a guest inquires about a booking to their check-out, clear and professional communication helps reduce confusion and can lead to better reviews.
Staying Updated on Regulations
Regulations can change quickly, so keeping up to date is crucial. For example, Halifax’s marketing levy increased from 2% to 3% in October 2023 [1], showing how shifts in requirements can directly impact your business. To stay informed, regularly check announcements from the Halifax Regional Municipality and subscribe to updates on their official website. This will help you stay ahead of any changes to By-law M-400 or other tourism accommodation regulations.
Don’t forget to pay attention to updates from booking platforms like Airbnb, Vrbo, and Booking.com. These platforms may adjust their collection procedures or timelines, and staying in the loop will help you adapt without disruptions. Networking with other local hosts and consulting professionals when new regulations arise can also provide valuable insights and strategies for staying compliant.
Conclusion
Halifax’s 3% marketing levy plays an important role in strengthening the city’s tourism sector, offering benefits to short-term rental operators. By calculating the levy based on the accommodation purchase price before HST, operators can stay compliant and maintain accurate financial records.
The increase from 2% to 3% aligns Halifax with other municipalities in Nova Scotia. Funds from the levy are allocated to two key areas: 65% supports destination marketing, while 35% is directed toward community events [3].
Keeping detailed and organized records is a must. Clearly itemize the levy on receipts to build trust with guests and ensure readiness for any audits [4].
As regulations evolve, Halifax has requested legislative changes from Nova Scotia to require platforms like Airbnb and Vrbo to handle the collection and remittance of the levy. For now, operators are still responsible for adding the levy to their prices and remitting it themselves [3].
For those juggling multiple properties or unfamiliar with municipal tax processes, professional tools can make a big difference. Casa Scotia’s owner portal, for example, simplifies the process by automating levy calculations, tracking compliance, and providing real-time updates. This reduces administrative stress while ensuring deadlines and payment accuracy are met. Together, these efforts highlight the levy's contribution to Halifax’s tourism growth.
FAQs
How can I comply with Halifax’s 3% marketing levy when managing direct bookings?
If you're managing direct bookings in Halifax, you'll need to account for the city's 3% marketing levy. The first step is registering your property with the Halifax Regional Municipality. Once that's done, adjust your pricing to include the levy - add 3% of the nightly rate to your guest's total bill and ensure it's collected at the time of booking.
After collecting the levy, it's your responsibility to remit it to the municipality, usually every month. Be sure to use the official remittance form and submit it on time to avoid any penalties. Keep an eye on regulatory updates to ensure you're always in compliance.
How will the collection of Halifax's 3% Marketing Levy change for short-term rental hosts in late 2024?
Starting in late 2024, online booking platforms such as Airbnb will take care of collecting Halifax's 3% Marketing Levy directly from guests during the booking process. This update eliminates the need for hosts to manually calculate or include the levy in their pricing.
In addition to collecting the levy, the platforms will also manage its remittance to the municipality. This change streamlines the process for hosts, cutting down on administrative work and ensuring the levy is collected and submitted on time, keeping hosts aligned with local rules.
What happens if I miss the monthly deadline for submitting the 3% Marketing Levy, and how can I ensure I stay compliant?
If you miss Halifax's monthly deadline for submitting the 3% Marketing Levy, you could be hit with a penalty of $25 for each day you're late, plus interest on the unpaid balance. These costs can pile up fast, making timely submissions crucial.
To avoid these charges, double-check your calculations and ensure both the remittance form and payment are submitted before the deadline. Consider setting reminders or scheduling payments ahead of time to steer clear of delays and extra fees.
