Sticker shock at checkout is never fun. If you are booking a Toronto hotel or short‑term rental, or you host one, the city’s temporary Municipal Accommodation Tax can change your total more than you expect. You want clear numbers and simple rules so you can budget with confidence. In this guide, you will learn what the 8.5% tax is, who pays it, how the math works with HST, and practical tips for guests and hosts. Let’s dive in.

What the 8.5% tax is and when it applies

Toronto’s Municipal Accommodation Tax (MAT) is a city tax on paid overnight stays. The City temporarily increased the MAT to 8.5% for stays from June 1, 2025 to July 31, 2026. You will see it on hotel bills and on short‑term rentals. For the official rate and timing, see the City’s overview of the Municipal Accommodation Tax.

The MAT applies to both hotels and short‑term rentals (STRs). The tax is charged on the room or accommodation portion of the bill. In Ontario, HST is 13%, and when an operator is HST‑registered, HST is applied to the combined room amount plus the MAT.

• City overview of MAT: Municipal Accommodation Tax
• STR rules and MAT collection: Short‑Term Rental MAT for operators
• HST rate in Ontario: CRA guidance on GST/HST rates

Why Toronto increased the rate

The City states that MAT revenue supports tourism marketing and visitor‑facing services. The temporary increase has also been tied to Toronto’s hosting costs for major events, including 2026 FIFA World Cup matches. You can review the City’s MAT page for policy context and program details.

Who pays and what the tax covers

If you are a guest, you will see MAT on qualifying stays. If you are an operator, you must charge and remit it.

• Covered stays: Hotels typically charge MAT on room rentals used for four hours or more and continuous stays of 30 days or less. STRs are defined as rentals of less than 28 consecutive days.
• What is taxed: The MAT is levied on the room or accommodation subtotal. Ancillary items like food and beverage, meeting rooms, and similar services are excluded when itemized separately.
• Common exemptions: Long stays of over 30 days and certain defined uses like some charitable or shelter programs are exempt. Review the City’s full list of rates and exemptions.

Reference: MAT rates and exemptions

How the math works on your bill

Here is the City’s calculation method in plain language. First, calculate MAT at 8.5% on the room subtotal. Next, if the operator is HST‑registered, apply 13% HST to the sum of room plus MAT.

• Room $100.00

  • MAT 8.5%: $8.50
  • HST 13% on $108.50: $14.11
  • Total: $122.61

• Room $150.00

  • MAT 8.5%: $12.75
  • HST 13% on $162.75: $21.16
  • Total: $183.91

• Room $200.00

  • MAT 8.5%: $17.00
  • HST 13% on $217.00: $28.21
  • Total: $245.21

Practical takeaway: for stays between June 1, 2025 and July 31, 2026, budget for 8.5% MAT plus HST on room plus MAT. The combined effect is an add‑on above 21% of the room rate.

Booking tips for guests

A little planning goes a long way.

• Check your confirmation: See if MAT is already included or will be added at checkout. If it is not clear, contact the hotel, host, or platform.
• Prepaid bookings: Industry guidance indicates reservations fully paid before June 1, 2025 could be exempt from the temporary increase, while partial deposits often do not qualify. Always confirm with the property and check your receipt. See coverage in hospitality trade media for context: Hotelier on Toronto’s MAT increase.
• Platform collection: Some platforms collect the MAT on your invoice for Toronto stays. For example, see Airbnb’s help page on Toronto taxes for how it handles city taxes.

Compliance checklist for STR hosts

Operating in Toronto comes with clear steps and deadlines. Follow the City’s STR operator guidance closely.

• Register as a short‑term rental operator and keep your registration current.
• Collect MAT at 8.5% on eligible stays during the temporary period. If a platform collects and remits for you, you must still file the City’s MAT report.
• File quarterly and remit within 30 days after each quarter end. Keep clean records of bookings, taxes charged, and payments.
• Understand penalties: interest can apply to late payments, and failure to comply can affect your registration status.
• Know your HST position: if you are HST‑registered, HST applies to room plus MAT at 13% and is remitted to the CRA. If your annual STR revenue is under the City’s referenced threshold for registration, you may not be required to register, but confirm your situation and consider professional advice.

City resources: Short‑Term Rental MAT for operators and platform agreements info at STR companies.

Owners and investors: what to factor in

If you are weighing STR use for a property, include the MAT and HST interaction in your pro forma. Plan for registration, quarterly reporting, and possible platform fees. The City directs MAT revenue to tourism support and visitor services, and the temporary increase aligns with major event hosting needs. Review the City’s MAT overview to ground your assumptions.

Plan your Toronto stay or strategy with clarity

Whether you are booking a weekend downtown or optimizing an STR portfolio, a clear view of the 8.5% MAT and 13% HST keeps your budget and compliance on track. If you are navigating a larger real estate decision that touches travel demand, STR regulations, or luxury resale value in Toronto and the West GTA, connect with a trusted local advisor. For tailored guidance and a discreet, concierge‑level approach, start a conversation with John Genereaux.

FAQs

Is the 8.5% Municipal Accommodation Tax permanent in Toronto?

• No, the 8.5% rate is temporary for stays from June 1, 2025 to July 31, 2026, with the underlying MAT program continuing outside that window at other rates determined by the City.

Does the MAT apply to cleaning fees, parking, or meals?

• MAT applies to the accommodation portion of the bill, and ancillary services are excluded when itemized separately, though platform tax calculations can vary by fee type.

How do I estimate my total nightly cost in Toronto?

• Add 8.5% MAT to the room rate, then apply 13% HST to the sum of room plus MAT to get your total.

Will Airbnb or another platform collect the MAT for me?

• Many platforms collect and remit MAT for Toronto bookings, but as a host you should confirm your platform’s policy and remember you must still file the City’s MAT report.

What happens if I miss a MAT payment or filing as a host?

• The City can apply interest on overdue amounts and may affect your registration status, including potential revocation for non‑compliance.