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Hotel And Lodging Tax In Ontario 2026: MAT Rates By City
Ontario's hotel tax is really two layers: a flat 13% HST everywhere, plus a Municipal Accommodation Tax that Toronto, Ottawa, and Niagara Falls each set, remit, and administer completely differently.
September 12, 2026
8
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TL;DR
- Ontario hotel stays carry two separate charges: the 13% Harmonized Sales Tax (HST), which applies everywhere in the province, and a Municipal Accommodation Tax (MAT) that individual cities choose to adopt and set their own rate for.
- "Hotel tax," "lodging tax," "accommodation tax," and "MAT" all describe the municipal charge in Ontario. It's a different thing from HST, not another name for it.
- Toronto and Ottawa both currently charge a 6% MAT; Niagara Falls charges 4%, rising to 5% on April 1, 2027.
- The MAT only exists because of a 2017 provincial law (O. Reg. 435/17) that replaced hotels' old voluntary Destination Marketing Fee with a mandatory municipal tax.
- Stays of more than 30 consecutive days are exempt from MAT in most cities, though Niagara Falls defines its short-term rental threshold at 28 days instead.
- At least 50% of MAT revenue must go to a designated tourism entity by provincial law, not the municipality's general fund.
- Where you remit MAT depends entirely on the city: Toronto collects it directly, Ottawa routes it through the Ottawa Gatineau Hotel Association, and Niagara Falls uses a portal run by the Ontario Restaurant Hotel & Motel Association.
- HST itself applies on top of the MAT amount, not just the room rate, so the tax is calculated on a tax.
How Ontario's Hotel and Lodging Tax Works
Ontario doesn't have one single "hotel tax." It has two entirely separate charges that both apply to the same room-night. The first is the Harmonized Sales Tax, a flat 13% (5% federal GST plus 8% Ontario's portion) that applies to virtually every purchase in the province, including hotel rooms, motels, and short-term rentals booked for less than 30 days. The Canada Revenue Agency administers HST the same way it does everywhere else in the country.
The second charge, the Municipal Accommodation Tax, only exists because of a specific piece of provincial legislation. In 2017, Ontario passed Bill 127 (the Stronger, Healthier Ontario Act), and on December 1, 2017, the resulting regulation, O. Reg. 435/17, took effect. Before that date, Ontario hotels charged a voluntary Destination Marketing Fee, an industry-run add-on that guests could technically decline. The new regulation replaced that voluntary system with a mandatory tax that individual municipalities can choose to adopt, at whatever rate their council sets, provided at least 50% of what's collected (after costs) goes to an "eligible tourism entity," a designated destination marketing organization like Destination Toronto or Ottawa Tourism, not the city's general revenue.
Because MAT is adopted city by city rather than set by the province, there's no single Ontario rate. A hotel's total tax burden depends entirely on whether its city has adopted a MAT at all, and if so, at what rate.
Tax Rates and Extra Fees
Every stay in Ontario carries a 13% HST. On top of that, the Municipal Accommodation Tax varies by city, and so does who actually collects it.
| City | MAT rate | Notes |
|---|---|---|
| Toronto | 6% | Reverted to 6% on August 1, 2026 after a temporary hike to 8.5%; administered directly by the City of Toronto; funds Destination Toronto |
| Ottawa | 6% | Effective January 1, 2026; remitted through the Ottawa Gatineau Hotel Association (OGHA) rather than directly to the city; traditional bed and breakfasts are exempted by council policy |
| Niagara Falls | 4% | Rising to 5% on April 1, 2027; recently moved from a star-rating-based assessment model to one flat percentage; remittance moves to an ORHMA-run online portal for stays from June 1, 2026 onward |
Because HST applies to the total charge on the folio, including the MAT line item itself, the province is effectively taxing its own municipal tax. A $200 room in Toronto with a 6% MAT ($12) and 13% HST calculated on the combined $212 works out to a materially higher total than treating HST and MAT as two independent percentages of the room rate alone, a calculation quirk that trips up manual spreadsheets more often than PMS-configured tax codes.
Collection and Remittance
HST is collected by the property and remitted to the Canada Revenue Agency on whatever filing cycle (monthly, quarterly, or annually) the business is registered for, based on revenue. MAT remittance is where Ontario genuinely differs city to city, and this isn't a minor detail: it changes who a hotel is actually filing with.
Toronto's MAT goes directly to the city itself. Ottawa's MAT is remitted through the Ottawa Gatineau Hotel Association, a third-party industry body, not city hall, within 30 days of month-end. Niagara Falls is moving remittance to a portal administered by the Ontario Restaurant Hotel & Motel Association starting with stays from June 1, 2026. A hotel operating in more than one Ontario city can end up filing MAT to a municipal government, a bi-national hotel association, and a provincial trade association, three structurally different recipients, for what looks like the same tax on paper.
For short-term rentals booked through platforms, Airbnb and similar marketplaces have voluntary collection agreements with most Ontario municipalities and generally handle MAT automatically on platform bookings. Direct bookings and off-platform stays remain the property's own responsibility to collect and remit.
Exemptions From Ontario's Hotel Tax
The standard MAT exemption threshold stays longer than 30 consecutive days, consistent with how HST also treats long-term accommodation. Niagara Falls is a notable exception: its short-term rental definition specifically uses 28 consecutive days, two days shorter than the more common threshold used elsewhere in the province.
Toronto's exemption list goes further than a simple day count. It specifically excludes shelters, provincially funded treatment centres, summer camps, employer-supplied employee housing, condo guest suites, and campground sites from MAT entirely, regardless of stay length. Ottawa carves out an exemption specifically for traditional bed and breakfast operators, a policy choice the city made when adopting its MAT rather than something the provincial regulation requires.
Common Mistakes Hotels Make With MAT and HST Compliance
- Treating MAT as a single Ontario-wide rate. Toronto and Ottawa both sit at 6%, but Niagara Falls charges 4% today and a scheduled 5% starting April 1, 2027, and dozens of other Ontario municipalities have adopted their own separate rates entirely.
- Calculating HST only on the room rate. HST applies to the combined room charge and MAT amount together, not the room rate alone, so calculating HST before adding MAT understates what's actually owed.
- Assuming one remittance process covers every city. Toronto, Ottawa, and Niagara Falls each route MAT to a different recipient, the city directly, a hotel association, or a trade association's portal, and a multi-property operator needs three separate filing relationships, not one.
- Applying a flat 30-day exemption everywhere. Niagara Falls defines its short-term rental threshold at 28 days, not 30, a two-day difference that matters for extended-stay bookings right at the cutoff.
- Missing Toronto's specific exemption categories. Employer housing, condo guest suites, and campground sites are excluded from MAT in Toronto regardless of how short the stay is, categories a generic day-count rule would miss.
- Not updating for a scheduled future rate change. Niagara Falls's move from 4% to 5% is already scheduled for April 1, 2027, and a property that doesn't update its tax configuration ahead of that date will under-collect starting on day one.
Where A PMS Fits Into MAT and HST Compliance
None of this is about software fixing Ontario's patchwork of municipal tax rules, but it is exactly the kind of structure that's hard to manage correctly by hand. A single Ontario portfolio can mean three different MAT rates, three different remittance destinations, and two different exemption thresholds, all while HST calculates on top of MAT rather than the room rate alone. roommaster lets a property configure HST and MAT as distinct, stacked tax codes per location, so the calculation order is built in rather than recreated in a spreadsheet every time a city changes its rate, and revenue reports broken out by tax code make it straightforward to reconcile what's owed to the CRA against what's owed to a city, a hotel association, or a trade portal on three different schedules.
See how roommaster simplifies multi-property tax reporting.
Frequently Asked Questions
1. Does Ontario have a provincial hotel tax rate?
Ontario applies the 13% HST to hotel stays provincewide, but the Municipal Accommodation Tax is set city by city, not by the province, so there's no single combined rate that applies everywhere.
2. What is Ontario's hotel tax?
Ontario's hotel tax is really two charges: the 13% HST that applies everywhere, and a Municipal Accommodation Tax that individual cities adopt at their own rate, currently 6% in Toronto and Ottawa and 4% in Niagara Falls.
3. What is Ontario's lodging tax?
Lodging tax is another name for the same combination described above: the provincial HST plus whichever city's Municipal Accommodation Tax applies to that specific property.
4. How long can a guest stay in Ontario before the hotel tax stops applying?
Most Ontario cities exempt stays longer than 30 consecutive days from MAT. Niagara Falls uses a 28-day threshold for short-term rentals specifically, two days shorter than the more common rule.
5. Does Ontario require hotels to disclose the full price including taxes before checkout?
No Ontario-specific all-in pricing law was found for hotel taxes and fees at either the provincial or municipal level.
6. Who is responsible for collecting and remitting Ontario's hotel tax?
The property collects both HST and MAT from the guest. HST is remitted to the Canada Revenue Agency; MAT goes to whichever recipient that specific city has designated, which could be the municipality itself, a hotel association, or a trade association's remittance portal.
7. Why did Ontario introduce the Municipal Accommodation Tax in the first place?
Before December 2017, Ontario hotels charged a voluntary Destination Marketing Fee that guests could decline. Provincial regulation O. Reg. 435/17 replaced that voluntary system with a mandatory tax, on the condition that at least half the revenue funds tourism promotion rather than general municipal spending.
