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.
Airbnb Laws, Taxes and Regulations in Ontario
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
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 advertisem*nts and listings.
Penalty for 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.
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
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
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.
