How to Airbnb Your Home
Using the short-term rental platform Airbnb to make some money on the side is a popular choice for homeowners, but make sure you do your research before taking the plunge.
Renting out your home on Airbnb is a quick way to earn a little extra cash, especially as mortgage rates keep rising. But it isn’t as easy as throwing up an ad on Airbnb, dusting your spare bedroom, and waiting for requests. Most cities and towns across Ontario have their own rules for Airbnb hosts.
With Canada’s housing shortage still in full swing, many towns and cities are implementing more and more regulations on Airbnb hosts, as well as hosts of other short-term accommodation options like Vrbo and Hosting.com. As a general rule, most places now have some sort of process for prospective hosts, but the exact rules vary between municipalities.
“With Canada’s housing shortage still in full swing, many towns and cities are implementing more and more regulations on Airbnb hosts, as well as hosts of other short-term accommodation options like Vrbo and Hosting.com.”
Some places, like Markham, completely ban short-term rentals. Other cities like Pickering don’t have set-in-stone rules on them. And major cities like Toronto and Mississauga allow Airbnb, but hosts have to follow local rules, or risk being fined (and kicked off the Airbnb platform).
The exact details of the application process vary by city and can change over time. No matter where you live, however, there are some basics that every prospective Airbnb host needs to know.
Most cities in Ontario (and elsewhere in Canada) require Airbnb hosts to register as businesses. That usually means a specific short-term rental license, but in some places, it simply means a general business license. And said license isn’t free: the exact amount charged varies from place to place, and sometimes increases by a set amount each year.
Here’s a quick list of how much some cities charge, as of 2023, for Airbnb-specific licenses. These are only for hosts using their primary residences – other arrangements may cost more:
Toronto: $53.22 per year, subject to an annual increase.
Mississauga: $250 per year.
Oakville: $190 per year.
Milton: $334 per year.
Burlington: No fee.
Markham: Doesn’t allow short-term rentals.
Vaughan: $360 for initial registration, with a $320 renewal charge annually. Exact cost goes up each year.
Richmond Hill: No fee
Pickering: No fee.
Whitby: No fee.
Ajax: No fee.
Oshawa: $75 per year, plus a $75 application fee.
Ottawa: $57 “administration fee,” plus $53 permit, must be renewed every two years.
Niagara Falls: $500 initial registration fee, with $250 renewal fee.
Barrie: $350 per permit, renewed annually.
While Airbnb is marketed as an easy way to earn additional income in the gig economy, many jurisdictions treat it just like any other job. Hosts who earn more than $30,000 in revenue from short-term rentals every year need to register with the Canada Revenue Agency as businesses. That means they’re required to collect GST/HST taxes on earnings and may need to file taxes quarterly, rather than annually.
But there are other considerations to be made. In Toronto, Airbnb hosts need to also collect the Municipal Accommodation Tax, a six percent tax on all money made from renting out their home to guests. This needs to be filed with the city and can be done online. And in Mississauga and Barrie, hosts must charge a four percent Municipal Accommodation Tax.
Perhaps the most peculiar fee is the one levied by the city of Niagara Falls — $2 for every night an Airbnb is occupied.
The two largest cities in the GTA, Toronto and Mississauga, do not allow Airbnb hosts to operate anywhere outside of their primary residence. Ditto for other major Ontario cities like Barrie, Ottawa, and Niagara Falls. In other words, if you have a condo and a beach home in the same city, you can only rent out the one you live in most of the year. (Mississauga does specify that renting a secondary suite in your home is fine, just so long as it isn’t a separate property).
Most other GTA cities that have specific rules around short-term accommodations, like Milton, also require operators to only use their primary residence. Even the cities that haven’t yet developed these rules, like Pickering and Whitby, will probably add them in future. It is a common feature of municipal-level Airbnb policy around the world, so don’t be surprised if you aren’t allowed to rent out a secondary property.
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All Airbnbs in Ontario are required to adhere to the Ontario Fire Code, which mandates smoke alarms outside all sleeping areas, as well as carbon monoxide alarms in homes with fuel-burning appliances (like a fireplace) or an attached garage.
Short-term rental owners have additional restrictions if they are housing more than 11 people in the same building. However, in the GTA, the odds of doing this for a primary residence are fairly low (unless you happen to have a mansion). If you are thinking of hosting more than 11 guests in your home, call your local fire department for more details on what to do.
Some jurisdictions may also want detailed inspections of your property to ensure it is safe. Oakville requires anyone applying for an Airbnb host license to submit, with their application, reports from a certified electrical contractor and HVAC installer.
In some GTA cities, insurance coverage for Airbnb hosts is mandatory. Oakville, for example, requires anyone applying for a license to submit proof of insurance covering at least $2 million in liability. (For the record, Airbnb’s own AirCover for Hosts insurance package only covers about $1.3 million CAD in host liability).
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