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Penticton City Council Approves Tax increase at Special Council Meeting

Updated: Nov 19, 2021

Last Thursday Penticton City Council unanimously passed a bylaw increasing the so called "Room Tax" by 1% to 3%, the maximum allowed.

The move is expected to generate an additional $250,000 dollars for Penticton.

The Municipal and Regional District Tax Program or MRDT is a tax that applies to short term rentals, such as hotels or B&B's.

Introduced in 1987 by the Provincial Government, revenues generated provide funding for local tourism marketing and low cost housing. The Tax is collected by the Province and is in addition to the 8% Provincial Sales tax applied to rental fees.

Affordable housing was added as a permissible use of funds in the 2018 Provincial Budget, to help address local housing needs.

The MRDT is administered by the Ministry of Finance, Ministry of Tourism, Arts and Culture, and Destination BC.

The TAX only affects short term housing in designated areas, typically hotel districts or areas catering to tourists. It also includes residential properties that offer B&B accommodations. The revenues generated by the MRDT tax go to municipalities.

The MRDT application must be renewed every five years.

Who the tax effects

Hotels, motels, resorts, boarding houses, rooming houses, bed and breakfast

establishments, lodging houses, bunkhouses, cabins, condominiums, dormitories, hostels, mobile, and vacation homes.

Exempt from the MRDT

Accommodations not listed online, those with less than $2,500 annually, charge $30 or less per day or for stays over 27 days in duration.

A list of who pays or who is exempt can be found here.

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