1351231 Ontario – Federal Court of Appeal confirms that conversion of the use of a condo from long-term rental to an Airbnb property caused its subsequent sale to be taxable

The Appellant used a condo unit for the first nine years after purchase for long-term residential rentals and then listed it on Airbnb and rented it out for succession of short-term rentals (under 60 days and sometimes for only one night) before its sale.

D’Arcy J found that this short-term rental operation caused the condo to cease to be residential complex (i.e., it became similar premises to a hotel, a motel, an inn, a boarding house and a lodging house; and substantially all of its rentals were for under 60 days) so that its subsequent sale was taxable.

Woods JA found no reviewable error in the above findings.

Neal Armstrong. Summary of 1351231 Ontario Inc. v. Canada, 2025 FCA 53 under ETA s. 123(1) – residential complex.