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.

FAQs

Are short-term rentals legal in Ontario?

Yes, short-term rentals are legal in Ontario but they are regulated by various municipal rules that differ from city to city. Municipalities like Toronto and Ottawa require short-term rental operators to only list their primary residence for short-term rental.

These regulations ensure that short-term rental businesses do not negatively impact housing availability for long-term rentals and maintain community standards. It’s important for Airbnb hosts to stay updated on local laws and tax obligations to comply with short-term rental regulations.

What are the new Airbnb rules in Ontario?

The new Airbnb rules in Ontario include stricter regulations that limit short-term rentals to principal residences in many major cities. For example, Toronto mandates that hosts register and obtain a permit for $110.

Hosts must display their registration numbers on all listings and comply with local municipal rules. Additionally, hosts must adhere to safety regulations, including those in the Ontario Fire Code, and collect and remit applicable taxes such as the percent Municipal Accommodation Tax (MAT).

The penalties for non-compliance can be significant, with fines reaching up to $100,000 per day.

Do you need a license to run an Airbnb in Ontario?

Yes, running an Airbnb in Ontario often requires a business license or permit, depending on the specific municipality.

For instance, Toronto and Ottawa require short-term rental operators to obtain a permit to legally list their property. The permit costs $110, and hosts must display their valid registration number on all listings.

The rules help ensure that short-term rental companies and operators comply with local standards and contribute fairly through taxes and regulatory measures.

Do Airbnb guests have tenant rights in Ontario?

Whether Airbnb guests have tenant rights under the Residential Tenancies Act (RTA) depends on the nature and duration of their stay.

Typically, stays under 30 days are considered temporary accommodation and do not fall under the protections of the RTA. However, if the rental extends beyond a short-term period or involves a situation where the guest has exclusive possession and a lease, tenant rights may apply.

It’s wise for short-term rental operators to consult a local lawyer or refer to the Landlord and Tenant Board to understand the nuances of guest rights in longer stays.