Updated August 2026 – the Toronto Municipal Accommodation Tax dropped back to 6% on August 1. The 8.5% rate that funded World Cup preparations expired on July 31, 2026. Most host guides still quote 8.5%. If you are collecting that from guests today, you are overcharging.
Ontario has no province-wide Airbnb law. The province handed the job to municipalities under the City of Toronto Act and the Municipal Act, so the rules that bind you are your city’s. Below is what Toronto requires, what the rest of Ontario looks like, and the two things that catch hosts out even when the city says yes.
What counts as a short-term rental?
Toronto defines it as renting all or part of a dwelling for fewer than 28 consecutive nights for payment. Ottawa uses 30. Hotels and motels are excluded. If you rent by the night or the week rather than on a lease, you are a short-term rental operator and the bylaw applies to you.
Toronto short-term rental licence: the current numbers
| Requirement | 2026 position |
|---|---|
| Registration fee | $390, annual, non-refundable |
| Renewal fee | $390 |
| Municipal Accommodation Tax | 6% (down from 8.5% on August 1, 2026) |
| HST on stays under 30 days | 13% |
| Entire-unit night cap | 180 nights per calendar year |
| Partial-unit (you stay home) | No night cap, up to 3 bedrooms |
| Properties per host | One – your principal residence only |
Registration is online, and the City issues a number you must display on every listing. Airbnb blocks unregistered Toronto listings automatically, so operating unregistered mostly means not operating at all.
Principal residence means the address you use for bills, identification, taxes and insurance. You get one, so you get one short-term rental. The spare condo does not qualify no matter how you structure it.
The MAT change and what to do about it
Toronto raised the accommodation tax from 6% to 8.5% on June 1, 2025 and let it run to July 31, 2026. It is now back at 6%. You collect it from guests, and you file quarterly within 30 days of quarter end – including quarters where you had no bookings. Airbnb does not remit MAT for you in Ontario. That part is yours.
Check your listing’s pricing today. Hosts who built 8.5% into a cleaning or service line and never revisited it are collecting a tax that no longer exists.
What Toronto actually fines people
The bylaw carries set fines, and they are smaller than the internet suggests – until they aren’t:
- Operating without registration: $1,000
- Exceeding the 180-night limit: $700
- No emergency contact information posted: $400
- Prosecuted in court: up to $100,000, or $10,000 per day for a continuing offence
The set fines are the routine enforcement tool. The six-figure numbers apply to commercial operators running multiple ghost hotels, which is who the bylaw was written for.
The two rules the city can’t help you with
A municipal licence permits you as far as the City is concerned. It does not override the two documents that actually control your unit.
Your condominium declaration. Condo boards can ban short-term rentals outright, and most Toronto buildings built in the last decade do, usually by imposing a minimum lease term of six months or a year. That restriction beats your city registration. Boards enforce with chargebacks, compliance orders, and court applications where owners persist – and the owner pays the corporation’s legal costs. Read the declaration and the rules before you spend $390 on registration.
Your lease, if you rent. Can you Airbnb your rental apartment? Only with your landlord’s written consent. Listing your unit without it is subletting without permission, and it is grounds for eviction. Whether an Airbnb arrangement is “subletting” or an unauthorised occupancy is a technical distinction that matters at the Landlord and Tenant Board; neither version helps you if you did it without asking.
Do you need a short-term rental agreement in Ontario?
Yes, and most hosts rely on the platform’s terms alone, which is thinner protection than they think.
A short-term rental agreement in Ontario is a licence to occupy, not a lease. That distinction is the whole point. The Residential Tenancies Act does not cover occupancies under 28 days where the unit is not the occupant’s permanent home, and it does not cover situations where the guest shares a kitchen or bathroom with the owner. Your guests are therefore licensees, not tenants. They have no security of tenure, no right to stay past the booking, and you do not need a Landlord and Tenant Board order to remove them.
Where hosts lose that protection is on long bookings. Let a guest stay past 28 days and start treating the unit as their residence, and you may have created a tenancy without meaning to – at which point removing them takes months and an LTB order. If you take monthly bookings, put the term, the licence characterisation, and the departure date in writing, and do not let bookings roll indefinitely.
A written agreement should cover: the exact stay dates, maximum occupancy, a no-party and noise clause referencing the city bylaw, damage responsibility, the emergency contact, and confirmation that the occupancy is a licence and not a tenancy.
Airbnb rules in other Ontario cities
The pattern is consistent – principal residence, a licence, a local tax – and the numbers differ:
- Ottawa – host permit for your principal residence, 4% MAT, occupancy capped at two guests per bedroom to a maximum of ten.
- Mississauga – principal residence, city licence, $2 million liability insurance required, written condo board approval if applicable, 6% MAT.
- Hamilton – principal residence and licence, $1 million insurance, 4% MAT, strict noise enforcement.
- Niagara Falls – permitted only in tourist and commercial zones, up to three bedrooms, MAT charged as a flat nightly fee rather than a percentage.
- Cottage country (Prince Edward County, Blue Mountains, Muskoka townships) – licensing fees run several hundred dollars a year, often with parking plans, fire inspections, and minimum-stay rules aimed at weekend party rentals.
Outside the big cities, check the township directly. Some still prohibit short-term rentals in residential zones entirely.
Tax on Airbnb income
Three separate obligations, frequently confused:
HST at 13% applies to stays under 30 days. If you are not HST-registered, Airbnb collects and remits it for you. Cross $30,000 in revenue over four consecutive quarters and you must register, give Airbnb your number, and file your own returns.
MAT at 6% in Toronto, collected by you and remitted quarterly to the City.
Income tax on the profit. Airbnb does not report your earnings to the CRA for you. Keep records; if you rent part of your principal residence, you can prorate expenses, but claiming capital cost allowance on the space can cost you part of your principal residence exemption when you sell. Ask an accountant before you claim depreciation.
Since 2024, federal rules also deny expense deductions to hosts operating where the municipality prohibits short-term rentals. Running an unlicensed unit no longer just risks a fine – it makes the income fully taxable with nothing to write off against it.
Frequently asked questions
What are the rules for short-term rentals in Ontario? There is no province-wide law. Each municipality sets its own, and most large cities require registration, restrict you to your principal residence, and levy an accommodation tax. Toronto’s rules are set out above.
Do I need a licence for Airbnb in Toronto? Yes. Registration is mandatory, costs $390 a year, and the number must appear on every listing. Airbnb automatically blocks unregistered Toronto listings.
How much does it cost to register a short-term rental in Toronto? $390 for registration and $390 to renew annually. Budget separately for the 6% Municipal Accommodation Tax you collect from guests and remit quarterly.
What is the difference between an Airbnb and a short-term rental? Airbnb is a booking platform. “Short-term rental” is the legal category, and in Toronto it means renting all or part of a dwelling for fewer than 28 consecutive nights. The bylaw applies whichever platform you use, including Vrbo and direct bookings.
Is a four-month stay a short-term rental? No. Anything of 28 nights or more falls outside Toronto’s short-term rental bylaw – and once a tenant treats the unit as their home, the Residential Tenancies Act may apply instead, which is a much harder relationship to end.
Is there a 90-day rule in Toronto? No, that is London’s rule and it is quoted constantly in error. Toronto caps entire-home rentals at 180 nights per calendar year. Renting rooms while you live there has no night cap.
What are Airbnb hosts not allowed to do? Operate unregistered, rent a property that is not their principal residence, exceed 180 nights on an entire-home listing, rent more than three bedrooms, or fail to collect and remit the accommodation tax. Fines start at $1,000 and reach $100,000 on prosecution.
Can I Airbnb my basement in Toronto? Only if the home is your principal residence and the unit is legal. A secondary suite in your own home can be registered; a basement apartment in a property you do not live in cannot. Your condo declaration or lease may also prohibit it regardless of what the City permits.
Talk to a Toronto real estate lawyer first
Zinati Kay has advised GTA property owners for more than 25 years on what their title, declaration and lease actually permit. Before you register a short-term rental, we will read the condominium declaration or the lease and tell you plainly whether the unit is eligible – a cheaper conversation than a compliance order. A Toronto real estate lawyer can also review the lease or declaration before you proceed.
416-321-8766 · john@zinatikay.com
General information about Ontario law and Toronto bylaws as of August 2026. Rates and fees change; confirm current figures with your municipality before pricing a listing.