Airbnb vs Long-Term Rental in Canada: Which Earns More After Costs? (2026)

This page compares the economics of renting a property night by night on Airbnb or a similar platform with renting it to a long-term tenant: what each earns, the extra costs a short-term rental carries, the occupancy it needs to come out ahead, and how GST/HST differs. It is part of WealthNorth’s guide to real estate investing in Canada.

Before running any numbers, check whether a short-term rental is allowed at all. Many Canadian cities now restrict short-term rentals to the host’s own principal residence, which rules out a full-time short-term rental of an investment property; Airbnb rules by city covers licensing, night limits and fines. Lenders also treat short-term rental income differently; see Airbnb mortgage rules.

Income: the same unit two ways

Illustrative assumptions, not market data, for one furnished one-bedroom condo where a short-term rental is permitted:

Occupancy is the number that decides the comparison, and it swings with season, location, reviews and local competition.

The costs only a short-term rental carries

The mortgage, property tax, condo fees and base maintenance are the same either way. These costs apply only to the short-term version (annual, illustrative):

Subtracting those costs leaves the short-term rental with about $18,460 against the long-term rental’s $28,500, before counting the host’s time or a co-host’s fee (often a percentage of bookings). In this example the nightly rental would need about 84% occupancy to match the long-term lease: (28,500 + 16,060) ÷ (97% of $150 × 365 nights). Different assumptions change the answer, but the structure holds: the short-term rental has to earn back a large block of extra costs before it pulls ahead.

For the full return on either option, including the mortgage, run the numbers through the rental property calculator.

GST/HST

A residential rental of one month or more is an exempt supply, so a long-term landlord doesn’t charge GST/HST. Stays of less than a month are taxable. When a host has to register: You have to register for the GST/HST once you make taxable sales in Canada and are no longer a small supplier: that happens when your taxable sales go over $30,000 in a single calendar quarter (register from that sale) or over the last 4 consecutive calendar quarters (by the end of the month after that quarter); below that you can register voluntarily. A registered host can claim input tax credits on related costs. Platforms may collect some of these taxes on the host’s behalf. The rules, including provincial and municipal accommodation taxes, are covered in Airbnb tax rules.

Income tax

Both kinds of income are taxed at your marginal rate after deductible expenses, and rental losses can generally be deducted against other income. A short-term rental with hotel-like services (daily cleaning, meals) can be treated as a business instead, which changes the reporting and can bring CPP contributions. Furnishings and the building can be depreciated through capital cost allowance, which is recaptured on sale; see CCA on rental property. How rental income is reported is covered in how rental income is taxed.

Pros and cons

When each tends to work

Long-term fits when you want predictable income with less work, the property isn’t your principal residence in a city that restricts short-term rentals, or the location has little tourist or business-travel demand.

Short-term can fit when the city allows it for your property, demand is strong year-round, and the numbers still work after every extra cost and your own time. Renting part of the home you live in, such as a basement suite or spare room, is the most common legal route in restricted cities, and overlaps with house hacking.

Hybrid approaches: seasonal short-term rental with a long-term lease off-season, furnished mid-term rentals of a month or more, or a long-term tenant plus a separately rented room in a home you live in.