Short-term rentals (like Airbnb) are legal in Ontario, but they come with strict local regulations. Ontario’s provincial government has largely left it up to municipalities to set their own Airbnb rules. This means the laws can differ significantly between cities like Toronto, Ottawa, Mississauga, and smaller towns. As an Airbnb host or property owner in Toronto (or anywhere in Ontario), you must understand your city’s specific short-term rental bylaws to avoid hefty fines and legal issues. Below, we break down exactly what you need to know about operating an Airbnb in Ontario.
Are Short-Term Rentals Legal in Ontario?
Yes – short-term rentals are legal in Ontario, but there is no single province-wide law for Airbnb. Instead, each city or town sets its own rules under powers given by the City of Toronto Act and Municipal Act. In practice, this means you must follow your local municipality’s regulations. Major cities have adopted bylaws to license and control Airbnbs, while some smaller municipalities have outright bans or strict limits. Always check your city’s latest rules because policies can change frequently.
What Counts as a “Short-Term Rental”?
Generally, a short-term rental in Ontario means renting out a home or unit for less than about a month at a time. For example, Toronto defines a short-term rental as a dwelling rented for under 28 consecutive days for a fee. Ottawa’s definition is similar (rentals under 30 nights). These typically include accommodations like homes, condos, or rooms rented on platforms (Airbnb, Vrbo, etc.) and exclude traditional hotels or motels. In short, if you’re offering stays by the night or week (rather than a standard one-year lease), local laws will treat you as a short-term rental operator.
Key Rules and Requirements for Airbnb Hosts in Ontario
Because rules vary by city, it’s useful to know the common requirements that most Ontario municipalities have adopted for Airbnb-style rentals:
In most Ontario cities, you can only short-term rent your primary residence, not an investment or secondary property. This means you (the host) must ordinarily reside at the address. For example, Toronto, Ottawa, Mississauga, Hamilton, and other major Ontario cities only allow Airbnbs in the host’s principal residence. You cannot legally rent out a spare condo or vacation home on Airbnb in these jurisdictions unless you live there as your main home.
Many cities require hosts to register or get a license/permit before advertising on Airbnb. For instance, Toronto and Ottawa require a short-term rental license (about $110 fee) and will issue you a registration number. You must display this number on all your listings to prove you’re licensed. Other cities have similar permit systems (Ottawa’s permit costs $116 for 2 years; some smaller towns charge even more). Operating without a license where one is required can lead to steep fines.
Ontario’s larger cities often impose limits on how you rent your home:
- Entire Home Rentals: If you rent out your entire home (while you’re away), there may be an annual cap on nights. Toronto, for example, caps entire-home rentals at 180 nights per year. This is to prevent full-time Airbnbs that remove housing from the long-term market.
- Partial Home Rentals: If you rent individual rooms in your home (and stay there as a host), Toronto allows an unlimited number of nights and up to three bedrooms at a time. Ottawa similarly limits occupancy to 2 guests per bedroom, up to 10 guests total in a home. Always check your local rules for specific limits on guest count or nights per year.
- No Secondary Units:Secondary suites or investment properties are usually ineligible for short-term rental licensing in regulated cities. You cannot Airbnb a home you don’t live in (with rare exceptions like certain licensed B&Bs or hotel-zoned properties).
Some municipalities restrict Airbnbs to certain areas or property types. For example, Niagara Falls only allows short-term rentals in specific tourist or commercial zones (not in quiet residential zones). Always ensure your property’s zoning or location is allowed for STR use under local bylaws.
Short-term rentals must meet safety codes. All cities require you to comply with fire and building codes – this includes installing smoke detectors, carbon monoxide alarms, fire extinguishers, and clearly posted emergency exit routes. Many bylaws also require providing a 24/7 local emergency contact number for guests. Essentially, your Airbnb must be as safe as a hotel or B&B would be under the law.
Several Ontario cities mandate proof of insurance when you apply for a license. You may need a special home insurance policy that covers short-term rental activity (commercial liability coverage). For example, Mississauga requires $2 million in liability insurance and Hamilton requires $1 million minimum. Even if not explicitly required, it’s highly recommended to inform your insurer and obtain proper STR insurance, or you risk claims being denied and even cancellation of your policy.
If your property is a condo or a rental unit, you must have permission to host short-term stays. Condo boards can ban or restrict Airbnbs in the building, and almost all condo bylaws will override city permission. Similarly, tenants need their landlord’s written consent to sublet on Airbnb in cities like Toronto and Ottawa. Always check your condo corporation rules or lease agreement – violating them could lead to eviction or legal action, even if the city grants you a license.
Short-term rental hosts must follow all related local bylaws on issues like noise, garbage, parking, and occupancy. Guests should not be causing disturbances. In cottage country especially, many townships enforce noise and nuisance bylaws strictly for rental properties. As a host, you should educate your guests on being respectful neighbors – some municipalities even require providing a “guest code of conduct” or information sheet to every renter (for example, Gravenhurst requires a posted renter’s code of conduct).
By meeting the above requirements, you’ll satisfy the common core rules that Ontario cities enforce on Airbnb operations. Next, we’ll look more specifically at how Toronto’s rules work, and then other cities.
Toronto’s Short-Term Rental Rules
As Ontario’s largest city, Toronto has one of the most detailed short-term rental regimes. If you’re hosting in Toronto, here are the key points to know:
- You can only list your primary residence (where you ordinarily live) as an Airbnb in Toronto. Secondary properties cannot be used for short-term rentals in the city.
- All Toronto hosts must register with the City and get a short-term rental license number. Registration is done online and currently has a ~$50 annual fee. You must include the city-issued registration number in all your Airbnb listings to show you’re compliant.
- If you rent your entire home (while you’re away), Toronto limits you to a maximum of 180 nights per calendar year for short-term rentals. This prevents year-round ghost hotels. (If you only rent out rooms and stay in the home, there is no total night limit.)
- You may rent up to three bedrooms at any one time in a Toronto home. Renting more than 3 separate rooms simultaneously in one dwelling isn’t allowed under the city’s rules.
- Toronto charges a Municipal Accommodation Tax (MAT) on short-term rentals, which as of 2025 is temporarily 8.5% of the rental amount. (It was 6% previously; the rate was increased to 8.5% from June 1, 2025 through July 31, 2026 to help fund the 2026 World Cup.) As a host, you must collect this 8.5% MAT from guests and remit it to the city quarterly. This is in addition to the 13% HST (discussed below).
- Toronto’s bylaw also explicitly requires things like: posting an emergency contact and exit diagram in the home, ensuring any laneway or secondary suites are only rented if they are your principal residence, and not renting out ineligible housing (like subsidized housing or dorms). Platforms (e.g. Airbnb) are licensed too – Airbnb automatically blocks listings that aren’t registered with the city, as an enforcement measure.
In short, Toronto hosts need to be licensed and stick to primary residences with the 180-night limit. The city actively enforces these rules, so non-compliance is risky. Now, let’s briefly see how other Ontario cities compare. Other Ontario cities also implement their own short-term rental regulations, but the specifics can vary significantly. For instance, some municipalities may have more lenient rules regarding the number of nights allowed, while others prioritize stricter enforcement of residential zoning regulations in Canada. This diverse landscape requires prospective hosts to thoroughly research local laws to avoid potential penalties.
Airbnb Rules in Other Ontario Cities
Outside Toronto, many Ontario cities have similar short-term rental laws with some variations in fees and details:
The capital city requires a Short-Term Rental Host Permit (about $100, valid 2 years) for your principal residence. Secondary homes are not allowed. If you’re a tenant, you need your landlord’s permission. Ottawa collects a 4% Municipal Accommodation Tax (MAT) on Airbnbs, which hosts must remit, plus HST. There’s an occupancy cap of 2 guests per bedroom (max 10 guests in a unit) for safety.
Similar to Toronto – only principal residences qualify, and you must obtain a city STR license. Proof of at least $2 million liability insurance is required with your application. If your property is a condo/apartment, you must show written condo board approval to Airbnb. Mississauga’s MAT is 6%.
Being a tourist hub, Niagara Falls mandates a special STR license and limits short-term rentals to certain zones (Tourist/General/Commercial). They allow up to 3 bedrooms. Uniquely, the MAT in Niagara is charged as a flat nightly fee (around $2 – $7 per night depending on the rental’s “star” rating) instead of a percentage.
Requires primary residence and a license; has a 4% MAT. Hamilton also requires ~$1M insurance coverage and enforces noise and nuisance bylaws strictly in its residential neighborhoods.
Popular cottage country town with a licensing program (the “STRA program”). Hosts must get a license for eligible properties in designated zones, provide documents like site plans and proof of insurance, and adhere to a 2 guests per bedroom limit. MAT is 4% in Huntsville.
Many Ontario cottage-country municipalities (Prince Edward County, Blue Mountains, etc.) have introduced licensing or restrictions. Fees can be quite high (e.g. some townships charge $500 – $750 annually for an STR license) and they often impose extra rules like mandatory parking plans, garbage disposal rules, or fire safety inspections. A few places still ban short-term rentals in residential areas or set minimum stay lengths (e.g. minimum 7-night stay rules) to deter weekend party rentals. Always research the specific township or county if your rental is outside a major city.
Bottom line: Wherever your Ontario Airbnb is located, expect to register with the local government, use only your main home, and follow similar safety, insurance, and tax obligations. The exact licenses, fees, and limits will differ, but the overarching goal (preventing ghost hotels and protecting neighbors) is consistent across the province.
Taxes on Short-Term Rental Income (HST and MAT)
Operating an Airbnb in Ontario means you’re responsible for certain taxes on the rental income and charges. There are two main types of taxes to know:
- Harmonized Sales Tax (HST) – 13%: In Ontario, short-term accommodation under 30 days is subject to the full 13% HST. How this is handled:
- If you do not have an HST/GST business number (many casual hosts don’t unless they exceed $30,000 in annual revenue), then Airbnb will automatically collect and remit the HST on the rental for you. This means guests are charged 13% and Airbnb sends it to the Canada Revenue Agency.
- If you are HST-registered (required if you earn >$30k from rentals or other business), then you must provide your HST number to Airbnb and you become responsible for charging and remitting HST yourself. You would then have to file HST returns to CRA for that income.
- Tip: The $30,000 threshold is cumulative over four quarters. If your Airbnb earnings are approaching that, consult an accountant about registering for HST.
- Municipal Accommodation Tax (MAT) – varies by city: This is a local city tax (often called the “hotel tax”) that most Ontario cities now apply to short-term rentals. MAT rates range from about 4% to 6% in most municipalities. For example, Ottawa’s MAT is 4%, Mississauga 6%. Toronto’s MAT is temporarily 8.5% until mid-2026 (normally 6%). Some smaller towns use flat per-night fees instead of a percentage.
- Importantly, Airbnb does not collect or remit MAT for you in Ontario. It’s up to the host to incorporate the MAT into your pricing or add it as an extra fee on the listing, and then you must register with the city to remit those taxes (usually quarterly).
- For instance, a Toronto host must add 8.5% to their rate for MAT, collect it from guests, and then periodically pay that amount to the City of Toronto, filing an online report each quarter (even if zero rentals occurred). Failure to do so could result in penalties or loss of your license.
- Note that MAT is on top of HST. If your guest pays $100 for a night in Toronto, the total might be $100 + 13% HST + 8.5% MAT = $121.50. You’d remit $13 HST (likely handled by Airbnb if you’re not registered) and $8.50 MAT to the city.
Income Tax
Separate from HST/MAT, remember that any income you earn from Airbnb must be reported on your income tax return. Airbnb does not directly report your earnings to the CRA, so it’s your responsibility to declare it. Keep good records of your rental income and expenses. (If you only rent part of your principal residence, you can usually prorate expenses like mortgage interest, utilities, etc., for tax deductions – consider getting professional tax advice if substantial income is involved.)
Penalties for Violating Short-Term Rental Laws
Failing to comply with Ontario’s short-term rental rules can lead to severe penalties. Municipalities are increasingly cracking down on illegal Airbnbs, so hosts should take enforcement seriously:
Fines
Ontario cities can levy very steep fines for unauthorized short-term rentals or breaches of bylaws. In many jurisdictions, fines can reach up to $100,000 per day for egregious violations. For example, if you operate an Airbnb in Toronto without registering (or you list a non-principal residence), you could face litigation and fines potentially running tens of thousands of dollars. Even guests caught in an illegal rental could be fined (though hosts are the primary target). Smaller municipalities also set high fines (e.g. some cottage towns set fines in the $1,000 – $5,000 range for first offences, which can escalate with repeat violations).
Enforcement Actions
Who enforces Airbnb rules? Primarily, local by-law enforcement officers do. They monitor listings and respond to complaints. Many cities have dedicated teams scanning Airbnb/Vrbo for unregistered listings or violations. They can issue fines or even pursue court injunctions to stop illegal rentals. In serious cases (e.g. a rental causing persistent public nuisances or operating unsafely), city officials or even police can get involved to shut it down. Some condo boards also aggressively enforce their no-Airbnb rules – they may levy condo bylaw fines or seek court orders against owners in violation.
License Revocation
If you are a licensed host but then break rules (over-rent beyond night limits, ignore safety requirements, etc.), the city can suspend or revoke your license to operate. This would make any further short-term renting illegal, and platforms like Airbnb might remove your listing at the city’s request.
Provincial/Federal Measures
The crackdown on illegal short-term rentals isn’t just local. The federal government has moved to disincentivize hosts from flouting local laws – for instance, as of 2024, Ottawa has proposed denying certain income tax deductions (like mortgage interest) to hosts who operate in municipalities where STRs are banned or not permitted. This is meant to “take away the incentive to flout local restrictions”. In short, if your city prohibits what you’re doing, you shouldn’t count on profiting from it.
In summary, don’t take the risk of operating under the radar. Ontario authorities have shown they are willing to impose massive fines to enforce compliance. It’s far better to follow the rules or, if those rules don’t allow your situation, consider long-term renting instead.
Do Landlord-Tenant Laws Apply to Airbnb Stays?
One common question is whether Ontario’s Residential Tenancies Act (RTA) – the law that protects tenants and governs landlord duties – applies to short-term rentals. In most cases, no, it doesn’t apply. The RTA generally does not cover accommodations occupied for less than 28 consecutive days (i.e. true short-term stays) as long as the occupant is not using the unit as their permanent residence. Also, the RTA explicitly excludes scenarios where the tenant shares a kitchen or bathroom with the owner/landlord (which is often the case for Airbnb room rentals in someone’s house).
Practical implications of this are:
- Airbnb guests are licensees, not tenants. They can be removed more easily if they overstay or breach house rules, since landlord-tenant eviction processes (via the Landlord and Tenant Board) typically do not apply. You wouldn’t have to file for an eviction hearing to remove a short-term guest who refuses to leave, for example – police could treat it as trespassing once their rental period ends.
- Standard tenant protections don’t apply. For instance, rent control, eviction rules, or the right to stay after a lease term do not pertain to short-term renters. They have no automatic right to stay beyond their booking. Conversely, they also typically can’t claim rights like demanding maintenance under the RTA or withholding rent, since they aren’t tenants under that law.
- If, however, a guest extends their stay beyond the short-term period (generally past that 28-day mark) and lives there as their residence, it could blur lines and potentially invoke RTA protections. For this reason, hosts should be cautious about very long bookings; after a certain point, you may unintentionally create a landlord-tenant relationship.
In summary, the RTA is designed for long-term residential tenancies, not transient stays. Airbnb hosts operate under contract and hospitality laws, not landlord-tenant law, for short stays. This is another reason why municipalities impose their own rules (licensing, etc.) to regulate Airbnbs since the usual landlord laws don’t cover them.
Staying Compliant
Navigating Ontario’s patchwork of short-term rental laws may seem complex, but it boils down to a few core principles: get properly licensed, only rent out your true home, pay the required taxes, and maintain safety and good conduct. If you do this, you can legally earn income from Airbnb while keeping neighbors and regulators happy. On the other hand, trying to skirt the rules (like running an Airbnb in a secondary property or ignoring license requirements) is not worth the risk – the fines and consequences are severe in today’s enforcement climate.
Finally, remember that regulations continue to evolve. Major events (like the 2026 World Cup or housing market changes) can prompt new bylaws or higher taxes temporarily. Stay updated with your city’s latest announcements and bylaws regarding short-term rentals. When in doubt, consult the official city website or seek legal advice – especially if you’re unsure about your situation (for example, running an Airbnb in a condo or handling taxes correctly). By staying informed and compliant, you can successfully host short-term rentals in Ontario without unwelcome surprises.