Hotel And Lodging Tax In Toronto 2026: MAT Rate And Rules

How Toronto's Hotel and Lodging Tax Works

Every guest paying for a hotel room or a registered short-term rental in Toronto pays two charges on top of the listed room rate: Ontario's 13% Harmonized Sales Tax and the City's 6% Municipal Accommodation Tax. Toronto was the first Ontario municipality to adopt this tax, and its version has its own legislative track separate from the framework most other Ontario cities use.

Toronto City Council approved a mandatory MAT on January 31, 2018, and the tax took effect April 1, 2018, at an initial rate of 4%. The authority for it sits in Toronto Municipal Code Chapter 758 (Taxation, Municipal Accommodation Tax), passed under section 267 of the City of Toronto Act, 2006, and operationalized through Ontario Regulation 436/17. That regulation is specific to Toronto: it was made under the City of Toronto Act rather than the Municipal Act, 2001, which is the statute that authorizes O. Reg. 435/17 for other Ontario municipalities like Ottawa and Niagara Falls. The practical effect for hoteliers is the same tax mechanics, but Toronto's version has developed its own separate amendment history since 2018, including council-approved rate changes that other cities have not mirrored on the same timeline.

The rate itself has moved more than once. City Council raised MAT from 4% to 6% in May 2023 to fund tourism recovery and city services. In 2025, Council approved a temporary increase to 8.5%, in effect from June 1, 2025 through July 31, 2026, before the rate reverted to 6% on August 1, 2026. MAT applies to the purchase price of the room only, for stays of four hours or more up to 30 consecutive days, and covers both traditional hotels and registered short-term rentals operating under the City's separate short-term rental licensing by-law.

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Tax Rates and Extra Fees

The two taxes stack in a specific order that trips up hotels new to Toronto. MAT is calculated first, as 6% of the room charge. HST is then calculated on the MAT-inclusive total, not on the room rate alone, since Ontario treats MAT as part of the taxable supply for HST purposes. On a $200 room night, MAT adds $12, bringing the taxable amount to $212, and HST at 13% on that $212 adds $27.56, for a total of $239.56 rather than the $226 a hotel would get by taxing the two charges separately.

The short-term rental registration fee is a licensing cost, not a tax passed to guests, but it matters for compliance budgeting since Toronto has confirmed the fee is subject to annual increases and non-payment can lead to registration revocation, which in turn cuts off a host's legal ability to collect MAT at all.

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Collection and Remittance

Toronto is unusual among Ontario municipalities in administering MAT directly rather than routing it through a hotel association or third-party portal. Hotel operators register with the City by emailing mat@toronto.ca, receive a payment ID in the format XXXXXXXXXMATHXXX, and remit MAT monthly, with the report and payment due within 15 days of month end (January's collections, for example, are due by February 15). Payment goes through a financial institution via online banking, telephone banking, an ATM, in person, or by electronic funds transfer arranged directly with the City.

Short-term rental hosts follow a different cadence. Once registered under the City's short-term rental by-law, hosts must collect and remit the same 6% MAT, but on a quarterly basis, within 30 days of the end of the quarter, rather than monthly. This split between monthly hotel filings and quarterly STR filings is specific to how Toronto built its short-term rental program on top of the existing MAT structure, and the City has stated that failure to report and remit correctly can trigger registration revocation, not just financial penalties. Overdue MAT accrues interest at 1.25% per month (15% annually), plus NSF charges for failed payments.

Platform handling varies. Some short-term rental platforms operating in Toronto have arrangements to collect and remit MAT on a host's behalf, but the legal remittance obligation still sits with the registered host, so hotels and property managers running STR units through a PMS need to confirm, host by host, whether a given platform is actually remitting or whether the host still owes the filing.

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Toronto's Fee Transparency Rules

Toronto Municipal Code Chapter 758 requires that MAT be itemized as its own line on the guest bill rather than folded into the room rate. The same provision requires any ancillary charge a hotel wants to exclude from the MAT calculation, such as meeting room rental, food and beverage, room service, or internet and phone charges, to be itemized separately on the invoice. If those charges are bundled into the room price instead of broken out, the City treats the bundled total as taxable room revenue for MAT purposes, which is a stricter, more specific rule than a general provincial pricing-disclosure requirement.

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Exemptions From Toronto's Hotel Tax

Toronto's MAT exempts stays longer than 30 consecutive days entirely; anything at or under that threshold is taxable from the four-hour mark onward. Beyond the long-stay exemption, Chapter 758 lists specific categories that are exempt regardless of stay length, including:

• Provincial treatment centres operating under the Ministry of Community and Social Services Act.
• Summer camps that provide overnight accommodation as part of their programming.
• Houses of refuge or lodging used for the reformation of offenders.
• Charitable or non-profit shelters providing relief of poverty or emergency housing.
• Hotel or motel rooms the City itself uses for emergency shelter purposes.
• Condominium guest suites.
• Campground tent or trailer sites.
• Accommodation an employer supplies to employees at an employer-operated premises.
• Accommodation at a university, college of applied arts and technology, or other post-secondary institution, which the province specifically carved out of the City's taxing authority under O. Reg. 436/17.
• Any accommodation purchased by a person or entity listed in section 268 of the City of Toronto Act, 2006, which covers certain government and diplomatic purchasers.

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Common Mistakes Hotels Make With MAT and HST Compliance

• Charging the wrong rate after August 1, 2026. Any property still billing the temporary 8.5% MAT after that date is overcharging guests and will need to refund or reconcile the difference.
• Calculating HST on the room rate instead of the MAT-inclusive total. Since HST applies to the room charge plus MAT, not the room charge alone, undercharging here creates a recurring shortfall that compounds every booking.
• Bundling ancillary fees into the room rate. Chapter 758 only excludes meeting room, food and beverage, or internet charges from MAT if they are itemized separately, so a bundled folio can turn non-taxable services into taxable MAT revenue by accident.
• Applying the hotel remittance schedule to short-term rental units. Registered STR hosts file quarterly, not monthly, and running an STR unit through a hotel's monthly MAT cycle can produce mismatched filings with the City.
• Assuming a booking platform is remitting MAT automatically. The legal obligation stays with the registered operator or host regardless of what a platform's terms imply, and the City can revoke a host's registration over an unremitted balance.
• Treating the 30-day exemption as automatic. A guest whose stay crosses the 30-day line without a documented, continuous booking can still be assessed MAT for the full stay if the exemption paperwork does not hold up.

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Where A PMS Fits Into MAT and HST Compliance

The part of Toronto's rules that trips up manual processes is the stacking order: MAT calculated first, then HST on the MAT-inclusive total, on top of a MAT rate that has changed three times since 2023 and reverted again as recently as August 2026. A property management system like roommaster can hold the current MAT rate as a configurable tax code tied to a room folio, so when the rate resets (as it did going from 8.5% back to 6%), front desk staff are not relying on someone remembering to update a spreadsheet formula, and the HST calculation applies to the correct MAT-inclusive base automatically. For a hotel or a host also running short-term rental units, having monthly and quarterly filing periods tracked against the same tax code in one system reduces the chance that an STR unit gets billed and reported on the wrong cadence.

Frequently Asked Questions

1. Does Toronto have its own hotel tax rate?

Yes. Toronto sets its own Municipal Accommodation Tax rate under its own provincial regulation, O. Reg. 436/17, separately from the general framework other Ontario municipalities use. The rate is 6% as of August 1, 2026, after a temporary 8.5% rate that applied from June 2025 through July 2026.

2. What is Toronto's hotel tax?

Toronto's hotel tax is the 6% Municipal Accommodation Tax, charged on top of Ontario's 13% HST for hotel stays and registered short-term rentals of 30 consecutive days or less.

3. What is Toronto's lodging tax?

Toronto's lodging tax is the same charge as its hotel tax and MAT. Lodging tax, bed tax, room tax, and MAT are different names hoteliers and guests use for the identical 6% municipal charge.

4. How long does a stay need to be to avoid Toronto's hotel tax?

A stay needs to run longer than 30 consecutive days to be exempt from MAT. Stays of four hours up to and including 30 consecutive days are taxable.

5. Does Toronto require hotels to show the accommodation tax separately on the bill?

Yes. Toronto Municipal Code Chapter 758 requires MAT to appear as its own line item, and any ancillary charge a hotel wants excluded from the MAT calculation must also be itemized separately rather than folded into the room rate.

6. Who is responsible for filing Toronto's MAT?

The accommodation provider is responsible. Hotels file and remit monthly through the City's payment system, while registered short-term rental hosts file and remit quarterly, and the City can revoke a host's registration for failing to do so correctly.

7. Why did Toronto's hotel tax rate change three times in three years?

City Council raised MAT from 4% to 6% in May 2023, then approved a temporary jump to 8.5% for the period of June 1, 2025 through July 31, 2026 before the rate reverted to 6%. Each change required a separate Council-approved amendment to Toronto Municipal Code Chapter 758, and the temporary 8.5% period was time-limited by design rather than a permanent rate change.