Airbnb has signed an agreement with Waterloo Region to collect a 4 per cent municipal accommodation tax (MAT) from 1250 hosts who list their homes, apartments and rooms for short term stays.

Starting January 1, 2020 Airbnb guests will see the additional tax added onto their bills. The money will be used by the municipality to market tourism in the region to people across the province, Canada and the U.S.

Alex Dagg, Director of Public Policy for Airbnb in Canada says the MAT is a great revenue source for the community.

"In the past year as of July to July our hosts in that region earned $6.5M so it's not nothing," said Dagg.

"So it will really generate a significant amount of extra tourism promotion dollars to the region which they're not collecting right now."

Tax means level playing field

The latest tax falls in line with a similar 4 per cent tax introduced to hotels and motels in July 2019 which at the time was forecast to add $3.3 million a year to the local tourism coffers.

The tax is shared between the Waterloo Region Tourism Marketing corporation, lower tier municipalities and the region.

Minto Schneider, the CEO of Waterloo Regional Tourism said the Airbnb MAT puts them on a level playing field with hotels and motels.

"It it only makes sense that visitors that are staying at Airbnbs are contributing as well," said Schneider. "We were fortunate enough to have Airbnb agree with us...and they've agreed to help us collect the 4 per cent tax as well."