Airbnb Rules in Ontario: Laws, Regulations and Taxes

Navigating the world of Airbnb in Ontario can feel like trying to piece together a complex puzzle, with different rules and taxes across different municipalities.

Whether you're listing your primary residence in Toronto, operating a bed and breakfast in Ottawa or managing multiple properties across the province, understanding the nuances of Ontario's short-term rental laws is crucial to your success.

Short-Term Rental Laws Ontario

Short-term rental regulations: Municipal rules

Different local municipalities of Ontario have different rules with regards to licensing, noise, safety and other matters.

Here are municipal rules to adhere to in some major cities in the province.

Owner-occupied short-term rental units

In some cities like Toronto and Ottawa, hosts will only be able to list their primary residences as vacation rentals. More power is given to landlords and building owners in condominium-type buildings.

(Read our blog article to find out how to get around subletting restrictions.)

Short-term rentals are still permitted if it is operated as a hotel or a bed and breakfast. Currently, there is no definition to permit the short-term rental of an entire unit in a residential zone as temporary accommodation for the public.

Some other key cities that limit short-term rentals only to primary residencies include Ottawa, Mississauga, Hamilton and Huntsville.

Licensing for short-term rental business

Some parts of Ontario including Toronto and Ottawa make it mandatory for hosts to acquire a host permit license, costing $110 to be able to list their property on holiday rental sites such as Airbnb.

Short-term rental operators also have to display their registration numbers on all advertisements and listings.

Penalty for short-term rental violations

Any violations of local short-term rentals laws can result in fines for hosts and their guests, of up to $100,000 a day.

Short-term rental regulations: Health and safety

Airbnb hosts in Ontario must ensure their property complies with fire and safety standards.

This includes installing smoke and carbon monoxide detectors, following building and fire codes, setting up emergency evacuation paths and providing guests with emergency contact numbers.

Advertising and accessibility of short-term rentals

Airbnb hosts in Ontario are encouraged to provide honest, accurate information about their properties including features and limitations with regards to accessibility, especially for the disabled. Emphasis is given to provide precise pictures and descriptions that represent the home or space being offered.

Residential Tenancies Act

The Residential Tenancies Act (RTA) of 2006 in Ontario, effective from January 31, 2007, outlines the rights and responsibilities of landlords and tenants renting residential properties. It applies to most rental units including apartments, houses, rooms, hostels, etc.

The RTA covers aspects like maintenance, rent, tenancy agreements and the process for resolving disputes. However, it does not apply to units where tenants share a kitchen or bathroom with the landlord. The Landlord and Tenant Board (LTB) is responsible for resolving disputes under this Act.

For more detailed information, visit the Landlord and Tenant Board's Guide to the Residential Tenancies Act.

Occupancy tax collection and remittance for vacation rentals

All guests who book Airbnb properties in Canada are subject to taxes as part of their reservations. These include:

• Goods and Services Tax (GST)

• Harmonized Sales Tax (HST)

Airbnb collects and remits these taxes to the Canada Revenue Agency. A separate Municipal Accommodation Tax (MAT) at a varying rate is also imposed by major cities and counties in Ontario.

Brockville, Cornwall, Greater Sudbury, Windsor and the Waterloo Regional Tourism District which includes only Kitchener, Waterloo, Cambridge, Woolwich, Wellesley and Wilmot impose a MAT of 4%. Toronto, Barrie and Mississauga charge a MAT rate of 6% and Ottawa imposes a MAT of 5%.

The tax rate applies to the total listing price paid by the guest, including cleaning fees.

Navigating Ontario's Airbnb Rules for Success

It may look like a lot to take in but the rules are in place for public safety and to make sure the locals in Ontario also benefit from the tourism industry. And they don't keep you out of the industry either.

If you are looking to expand your property rental portfolio in Ontario or elsewhere, request a free demo to find out how Hostaway can help you grow your short-term rental business.

Airbnb Rules in Ontario – Frequently Asked Questions (FAQs)

1. Are there different Airbnb rules in different Ontario cities?

Yes, each municipality in Ontario can set its own rules for short-term rentals. Major cities like Toronto, Ottawa, Mississauga, Hamilton, and Huntsville often require that only primary residences can be listed as vacation rentals, and some cities have additional licensing, noise, and safety regulations.

2. Do I need a license to operate an Airbnb in Ontario?

In cities like Toronto and Ottawa, you must obtain a host permit license (costing around $110) to list your property on platforms like Airbnb. You are also required to display your registration number on all advertisements and listings.

3. What are the penalties for violating short-term rental laws in Ontario?

Violating local short-term rental laws can result in significant fines for both hosts and guests—up to $100,000 per day in some municipalities.

4. What health and safety requirements must Ontario Airbnb hosts follow?

Hosts must comply with fire and safety standards, including installing smoke and carbon monoxide detectors, following building and fire codes, setting up emergency evacuation paths, and providing guests with emergency contact numbers.

5. What taxes apply to Airbnb rentals in Ontario?

Airbnb collects and remits Goods and Services Tax (GST) and Harmonized Sales Tax (HST) to the Canada Revenue Agency. Many cities also charge a Municipal Accommodation Tax (MAT), which ranges from 4% to 6% depending on the city, and applies to the total listing price, including cleaning fees.

6. How does Hostaway support Airbnb hosts in Ontario?

Hostaway helps Ontario hosts stay compliant by streamlining property management, automating guest communication, and providing tools to track licensing, taxes, and safety requirements. This makes it easier to manage multiple properties and keep up with changing local regulations.