Payment Radar
Toronto’s temporary 8.5% MAT rate ended; rate returned to 6% on August 1, 2026
Toronto’s temporary 8.5% MAT rate ended and the rate returned to 6% on August 1, 2026. Hotels and individuals offering short-term rentals must pay MAT on the room portion for stays of four hours or more.
Payment RadarOriginal source: City of Toronto · linked publisher media; native reuse rights require confirmation 
What changed
Effective August 1, 2026, Toronto’s temporary 8.5% Municipal Accommodation Tax (MAT) rate ended and the rate on transient accommodations returned to 6%. MAT applies to the purchase price of the room portion of an accommodation for stays of four hours or more. Other services, including meeting room rentals, food and beverage, room service, internet and phone charges, are excluded when itemized separately. HST is also payable on the MAT portion.
Why a business should care
Hotels and short-term rental operators should account for the 6% rate and the rules for calculating the taxable room portion. Payment Radar’s view is that reviewing billing calculations and separately itemized charges can help operators apply the stated rules.
Who it affects
Hotels and individuals offering short-term rentals in Toronto must pay the 6% MAT, subject to the stated exemptions.
What to consider doing
Review accommodation billing to reflect the 6% rate effective August 1, 2026. Check that MAT is calculated on the room portion for stays of four hours or more, that the listed services are excluded when itemized separately, and that HST is payable on the MAT portion.
Uncertainty and risks
The City states: “Interest and penalties apply on any overdue MAT payment at a monthly rate of 1.25 per cent from the first day after the tax payment is due. After that time, interest will apply each month on the principal amount owing during the default period at an annual rate of 15 per cent (15%).”
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