If you’re a host or a traveller in the 6ix, you’ve likely noticed an extra line item on your booking invoice lately. In Toronto, the Municipal Accommodation Tax (MAT) is more than just a minor fee; it is a critical regulatory pillar that directly impacts the profitability of short-term rentals (STRs).
As of 2026, staying compliant with MAT isn’t just a suggestion; it’s a requirement to keep your STR license active. This guide breaks down exactly how the tax works, the recent 8.5% rate hike, and what every Toronto host needs to know about reporting and remittances.
The Municipal Accommodation Tax (MAT) is a mandatory tax applied to transient accommodations in the City of Toronto. First implemented in 2018, it was designed to generate revenue from the tourism industry to fund city services and destination marketing without placing the burden on local property taxpayers.
If you’ve been hosting for a few years, you likely remember a 4% or 6% rate. However, the current landscape has changed:
After July 2026, the rate is scheduled to be reviewed, but for now, all operators must ensure they are collecting the full 8.5% on every booking.
In Toronto, a short-term rental is defined as any stay of 28 consecutive days or less. If you are registered as an STR operator, MAT applies to your listing.
The tax is levied on the purchase price of the accommodation. This includes:
Not everything is taxable. To maximize your transparency with guests, remember that MAT does not apply to:
One of the most common questions is – Do I charge HST on top of MAT?
Reporting and Remittance - The Host's Responsibility
To ensure your business remains in good standing, visit us for STR permit assistance for a step-by-step walkthrough of the licensing portal.
Why Is This Tax Important for Toronto?
Common Questions About Toronto Accommodation Taxes
As of 2026, there is an 8.5% Municipal Accommodation Tax (MAT) applied to the room portion of stays under 30 days.
While property tax rates vary, the MAT rate is currently fixed at 8.5% for all transient accommodations until July 31, 2026.
In Toronto, guests typically pay a combined 21.5% in taxes (8.5% MAT + 13% HST).
The GST/HST Reimbursement Trap
A point of confusion for many commercial hosts involves the GST (Goods and Services Tax). While direct payments of municipal taxes to the City are generally exempt from GST, if you are a tenant sub-leasing a space and your landlord reimburses you for property taxes, that amount may attract the standard GST/HST rate.
If your STR revenue exceeds $30,000 annually, you must register for a GST/HST number and manage these remittances separately from your MAT filings.
Navigating the 8.5% MAT rate while managing a high-end rental is a balancing act. At Toronto Boutique Apartments, we help owners stay 100% compliant with Municipal Accommodation Tax Toronto regulations while optimizing their nightly rates to account for these shifts.
Need Help Filing Your Quarterly MAT Report Correctly?
Toronto Boutique Apartments is here for your help. As professionals, we know how the MAT reporting and licensing rules work, and we can help you file your reports accurately, completely free of charge.
