Vancouver World Cup tax targets short-term accommodations

The City of Vancouver is the first municipality to apply a specific tax on short-term accommodations, such as hotels and Airbnb, to help pay for the costs associated with the 2026 FIFA World Cup.

This is being done through a “modest temporary increase to the Municipal and Regional District Tax (MRDT)” on such accommodations, the province says.

The Major Events MRDT rate will be 2.5 per cent over seven years, the province explains. It says stakeholders came up with this figure after consultation between the city, Destination Vancouver, the B.C. government, and the local accommodation sector.

“We’re so excited to be hosting the FIFA World Cup 2026, one of the world’s largest sporting events, here in Vancouver,” said Vancouver Mayor Ken Sim.

“Vancouver has welcomed the world on many occasions, but this global celebration of soccer and national pride is an extraordinary opportunity. The economic impacts and benefits to Vancouver will be felt in the leadup to the FIFA World Cup, throughout the event and long after the final whistle blows in 2026.”

The tax will mean an additional $2.50 on each $100 paid on short-term accommodations starting Feb. 1, 2023, the government says.

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In total, it’s anticipated the tax could result in about $230 million in revenue over the seven-year period.

The B.C. government notes changes to the Provincial Sales Tax Act were made after Vancouver requested the increase last fall. Communities can apply for the tax to help pay for “eligible major internationally recognized events that help to significantly bolster international visitation to the province.”

“Similar to how the province helped Whistler fund its 2010 Winter Olympics, we’re grateful for all our partners who are working together to give soccer fans, people in the tourism sector, and all British Columbians this once-in-a-generation opportunity,” said Minister of Finance Katrine Conroy.

The additional money generated from this new tax is expected to help pay for World Cup planning, staging, and hosting.

Last June, Vancouver was the first western city announced by FIFA to host games for the 2026 World Cup. Vancouver joins Seattle, San Francisco, Los Angeles, and Guadalajara as host cities in the west region.

Destination BC says it estimates the sporting event would draw about 269,000 visitors, about half from outside Canada and the U.S.

Previously, the province said it estimated the cost of planning, staging, and hosting matches in Vancouver to be in the range of $240 million to $260 million.

It added the the tournament had the potential to bring in $1 billion in new tourism revenue during the event and in the five years after.

The B.C. government says since 1987, the Municipal and Regional District Tax on short-term accommodations has been used to help fund various events in more than 60 communities.