The Canadian Snowbird Who Rents on Airbnb: The Full Tax Picture in Both Countries, Including the Days

The snowbird who rents out the condo in the off-season is the most common Canadian short-term rental host, and the file has more parts than a full-time rental because the owner's own use enters every calculation: it decides whether the 14-day exclusion applies, how expenses are allocated, whether deductions are capped, and whether the days in the US are approaching the substantial presence line. This is the whole picture: the US income tax, the platform, Florida, the Canadian return, and the days.

Key takeaways

• Fewer than 15 rental days: no US income tax on the rent (section 280A(g)); Canada taxes it in full; the platform withholds anyway; a 1040-NR recovers it.
• Fifteen or more rental days: the rent is US-taxable; expenses are allocated between rental and personal days; if personal use exceeds the greater of 14 days or 10% of rental days, rental deductions are capped at rental income (no loss); the section 871(d) election avoids 30% on gross; W-8ECI to the platform.
• Personal use includes the owner's days, family's days, and days rented below market; days spent doing repairs and maintenance full-time do not count as personal use.
• Florida: 6% state transient tax and the county tourist tax on every rental night, collected by the platform in most counties; property tax at the non-homestead rate (no homestead for a non-resident; no 3% cap; the 10% non-homestead cap applies).
• Canada: T776 with the rental period's share of expenses; foreign tax credit for the actual US tax; T1135 if foreign property exceeds $100,000.
• Days: the winter in the condo counts toward the substantial presence test; four months for three winters meets it; Form 8840 (closer connection) keeps a snowbird non-resident if under 183 days in the current year.

The 14-day line

A condo the owner lives in for the winter is a residence, and if it is rented for fewer than 15 days in the year, the rent is excluded from US income entirely. At 15 rental days, the whole year's rent is US income. The line is days actually rented at fair value; a single extra booking changes the year.

Above the line: allocation and the cap

With 15 or more rental days, the year's expenses (mortgage interest, property tax, insurance, condo fees, utilities, repairs, depreciation) are allocated between rental use and personal use by the ratio of rental days to total use days. Only the rental share is deductible against the rent. If the owner's personal use exceeds the greater of 14 days or 10% of the rental days (it always does for a snowbird), the rental deductions are limited to the rental income: no rental loss, with the excess carried forward. Mortgage interest and property tax attributable to personal use are personal (and a non-resident cannot itemize them).

The section 871(d) election, made on the 1040-NR, is what allows the net computation; without it, the platform's 30% on gross is the final tax. Form W-8ECI to the platform, with an ITIN, stops the withholding.

Florida

Transient taxes. The 6% state sales tax and the county tourist development tax apply to every night rented for six months or less; platforms collect and remit in most counties (Miami-Dade, Broward, Palm Beach, Lee, Collier, Pinellas); hosts renting directly register and remit.

Property tax. A non-resident cannot claim the homestead exemption; the property is assessed at market with the 10% annual cap on non-homestead assessment increases (not the 3% homestead cap); the rate is the same.

Licensing. Florida requires a vacation rental licence from the Department of Business and Professional Regulation for units rented more than three times a year for periods under 30 days; condo associations and cities have their own rules.

Canada

The rent is rental income on Form T776 in Canadian dollars; the expenses for the rental period (the same allocation logic) are deductible; CCA is optional. The US federal tax actually payable (the 1040-NR result) is the foreign tax credit. The condo is specified foreign property on the T1135 if the owner's foreign property exceeds $100,000 at cost (a rented condo is not personal-use property for T1135 purposes).

The days

Every day the snowbird is in the condo is a day present in the US. The substantial presence test is met when the current year's days plus one-third of last year's plus one-sixth of the year before reach 183. A four-month winter (about 120 days) meets it in the third year. A snowbird who meets it and stays under 183 days in the current year files Form 8840 by June 15 claiming the closer connection exception (Canadian tax home, closer connection to Canada) and remains a non-resident. One who stays 183 or more days in a year is a resident unless the treaty tie-breaker assigns them to Canada. The rental activity does not affect the day count, but trips to manage it add to it.

The 1040-NR

Required when there is rental income under the 871(d) election (or a trade or business); optional but useful under the 14-day exclusion to recover withholding. Due June 15. Form 8840 attaches to it (or is filed alone if no return is required). An ITIN is required.

Worked example

A Winnipeg couple own a Naples condo, live in it from January to April (110 days), and rent it on Vrbo for 90 nights from May to November at $250 a night.

• US rental. 90 rental days; 200 total use days; 45% of expenses allocable to rental. Gross rent $22,500; allocable expenses (condo fees, insurance, property tax, utilities, depreciation) about $14,000; platform fees $1,800; net about $6,700; personal use exceeds the threshold so no loss could be claimed, but there is none. 871(d) election; US tax about $700. W-8ECI with ITINs to Vrbo.
• Florida. Vrbo collects the 6% state tax and Collier's 5% tourist tax from guests. Non-homestead assessment. Vacation rental licence.
• Canada. T776: $30,800 CAD gross; allocable expenses about $21,600 CAD; net about $9,200 at Manitoba rates, about $4,600 of tax; credit for the $700 USD of US tax. T1135.
• Days. 110 + 37 + 18 = 165 in year three: under 183; no Form 8840 needed yet. At 125 days a winter, 125 + 42 + 21 = 188: Form 8840 annually.

Official sources

"There's a special rule if you use a dwelling unit as a residence and rent it for fewer than 15 days. In this case, don't report any of the rental income and don't deduct any expenses as rental expenses." — Internal Revenue Service, Topic No. 415, Renting Residential and Vacation Property, https://www.irs.gov/taxtopics/tc415

"If an NRA owns or holds in interest in real property located in the U.S. and holds the property for the production of income, then the NRA can elect under Internal Revenue Code (IRC) 871(d) to treat all income from U.S. real property as effectively connected income with the conduct of a trade or business in the U.S." — Internal Revenue Service, Nonresident Aliens — Real Property Located in the U.S., https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens-real-property-located-in-the-us

"Florida's 6% state sales tax, plus any applicable discretionary sales surtax, applies to rental charges or room rates paid for the right to use or occupy living quarters or sleeping or housekeeping accommodations for rental periods of six months or less, often called 'transient accommodations' or 'transient rentals.'" — Florida Department of Revenue, Sales and Use Tax on Rental of Living or Sleeping Accommodations, https://floridarevenue.com/Forms_library/current/brochure/gt800034.pdf

"You were present in the United States less than 183 days during the year," maintained "a tax home in that foreign country during the entire year," and "had a closer connection during the year to one foreign country in which you had a tax home than to the United States." "You must file Form 8840, Closer Connection Exception Statement for Aliens, to claim the Closer Connection Exception." — Internal Revenue Service, Closer Connection Exception to the Substantial Presence Test, https://www.irs.gov/individuals/international-taxpayers/closer-connection-exception-to-the-substantial-presence-test

Practitioner note

The snowbird's rental file is a personal-use file first: the owner's days decide the 14-day exclusion, the expense allocation, the loss cap, and the residency count. We build the calendar of the year (owner days, rental days, empty days, management days) before we touch a form, because every number on both returns comes from it.

See also: For the full sequence of a Canadian move to Florida, see the Canada-to-Florida tax guide, and browse every cross-border tax topic guide, organized by situation.

Next step

Fairlight prepares the annual calendar and day count, the 1040-NR with the 871(d) election or the 14-day exclusion, Form 8840 where needed, and the Canadian return with the T1135. See cross-border pricing or book a call.