Airbnb Rules in Canada by City: Licensing, Principal Residence Rules and Taxes (2026)

This page sets out the short-term rental rules that apply in major Canadian cities: licensing and registration, principal residence requirements, night limits, accommodation taxes and fines, plus the federal tax, mortgage and insurance points every host shares. It is part of WealthNorth’s guide to investment property financing. Rules change often and vary by zone and building, so confirm them with the municipality before buying or listing.

Why short-term rental rules matter

British Columbia now has province-wide short-term rental legislation, Ontario cities enforce registration bylaws, and Quebec and Nova Scotia run provincial registration systems. Breaking the rules can mean fines, removed listings, denied insurance claims and a breach of your mortgage terms. Whether a short-term rental earns more than a lease once it’s allowed is covered in Airbnb vs long-term rental; financing one is covered in Airbnb mortgage rules.

Federal rules that apply everywhere

Before looking at city-specific bylaws, every Canadian Airbnb host must comply with federal obligations.

Income tax

All short-term rental income is reported on your federal tax return as either rental income (Line 8299 / T776) or business income (T2125). Renting space with only basic services (heat, light, parking, laundry facilities) is rental income; providing additional services such as cleaning, security and meals may make it a business, and the more services you provide, the more likely it is.

GST/HST

• 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.
• Below that threshold, registration is optional but lets you claim input tax credits.
• Stays of less than one month that cost more than $20 a night are taxable for the GST/HST (long-term residential rentals are exempt): a host registered for the GST/HST charges it on their own stays, and for hosts who aren't registered, a platform such as Airbnb charges and collects it on the stays it books. Platforms have collected it for unregistered hosts since July 1, 2021, under Canada’s digital economy GST/HST rules.

Mortgage implications

A residential mortgage’s terms can restrict commercial use of the property, so running a full-time STR may breach them. Read the terms or ask the lender before listing:

• High-ratio insured mortgages: High-ratio insurance, which allows less than 20% down, is only for a home that you, or a spouse, partner, parent or child living there rent-free, will occupy. A rental-only property needs at least 20% down.
• Investment-property mortgages allow rental use, but a lender may treat short-term use differently from a long-term lease, so disclose it.
• Home insurance: tell your insurer about short-term rental activity before you list (see the insurance section below).

City-by-city regulation summary

Major cities in detail

Toronto

Key rules:

• Must register with the City and obtain a Short-Term Rental Registration Number; only one registration is allowed per dwelling unit.
• Only your principal residence qualifies: where you live and the address you use for bills, identification, taxes and insurance.
• Entire-home rentals capped at 180 nights per calendar year. Renting up to 3 bedrooms in the home you live in has no night cap.
• Registration number must appear on every listing.
• Municipal Accommodation Tax (MAT) of 6% on rentals under 28 consecutive days (a temporary 8.5% rate ended August 1, 2026). A platform with a collection agreement with the City can collect it for you, but you still file the MAT report.
• Registration is renewed every year, and MAT reports are filed quarterly.

Enforcement: Ticketed offences carry set fines of $300 to $1,000. On a court conviction, the fine can reach $100,000, or up to $10,000 a day while the violation continues.

Condo considerations: Even if the City permits your listing, your condo corporation may prohibit STRs entirely. Check your declaration and rules before listing.

Vancouver

Key rules:

• Must hold a City of Vancouver business licence, plus a separate BC provincial short-term rental registration; check both fees with the City and the province.
• Principal residence only: B.C.’s rule is the usual place where you make your home day to day, plus one secondary suite or other accessory unit on the same property. A city’s own bylaw can be stricter, so confirm with the City whether a suite or laneway home can be listed.
• B.C.’s rule allows renting the whole unit while you’re away; confirm any city limits before listing.
• Both the licence number and the provincial registration number must appear on every listing.
• Strata bylaws can further restrict or ban STRs, and the City requires strata or landlord approval before you apply for the licence.

Provincial layer: B.C.’s Short-Term Rental Accommodations Act:

British Columbia’s Short-Term Rental Accommodations Act sets a principal residence requirement, and the provincial host registry became mandatory May 1, 2025:

• The principal residence requirement applies in municipalities of 10,000 people or more, smaller communities close to them, and communities that opt in. Smaller municipalities (under 10,000 people and not within 15 km of a larger one), resort communities and most regional district electoral areas are exempt. Local governments can opt in each year, but an opt-in can’t change the exempt status of a resort area or farm land.
• Platforms must check each listing’s provincial registration number against the registry.
• PST of 8% applies to short-term accommodation, plus a municipal and regional district tax of up to 3% where one is levied. In the City of Vancouver, a Major Events MRDT of 2.5% applies on top until January 31, 2030.
• Hosts must display a business licence number (where the local government requires a licence) and a provincial registration number on listings.
• Local governments can set ticket fines of up to $3,000 per infraction, per day, and fines of up to $50,000 when a bylaw offence is prosecuted. The province also has its own compliance and enforcement unit.

Montreal

Key rules:

• Must hold a registration from the Corporation de l’industrie touristique du Québec (CITQ), and a City permit to rent your principal residence.
• The registration number must appear on all listings and advertising.
• Renting your principal residence short term is allowed only between June 10 and September 10 each year, for up to 31 days in total in that period, and not at all in Lachine, Saint-Laurent or Saint-Léonard. Renting a home that isn’t your principal residence needs a commercial certificate of occupancy where zoning allows it.
• Quebec’s 3.5% tax on lodging applies, and Airbnb has collected it for hosts since October 1, 2017.
• The QST (9.975%) applies in addition to the GST.

Enforcement: Confirm current penalties with the City and the province before listing.

Ottawa

Key rules:

• Must obtain a host permit from the City of Ottawa.
• Short-term rentals are limited to the host’s principal residence for most hosts; rural homeowners and cottage owners can get a separate permit for cottage rentals.
• Ottawa charges a Municipal Accommodation Tax of 6% (since January 1, 2026) on accommodation of under 30 days, including rentals booked through platforms.
• Confirm listing, night and penalty rules with the City before listing.

Calgary

Key rules:

• Requires a City of Calgary short-term rental business licence.
• Licences come in primary residence and non-primary residence categories, so an investment property can be licensed. The City has approved a pause on new non-primary residence licences that takes effect only if the rental vacancy rate falls below a set threshold; existing licences and primary residence applications aren’t affected.
• Your licence number must appear in all advertising, and you need at least $2 million of liability insurance that covers short-term rental use.
• Breaking the licence rules carries a $1,000 fine per offence on conviction.

Tax layer: Alberta’s tourism levy applies to accommodation of under 28 consecutive days: 6% for stays booked from April 1, 2026, up from 4%. Online platforms that take payment, such as Airbnb, collect it.

Halifax

Key rules:

• A residential short-term rental must be the host’s primary residence; renting a home you don’t live in is limited to zones that allow commercial short-term rentals. Confirm the permit or letter you need, and its fee, with the municipality.
• Every short-term rental of 28 consecutive days or less in Nova Scotia must be registered with the province each year, renewed by April 1. Registering requires proof that the rental complies with municipal land-use bylaws.
• You need the provincial registration number to advertise on platforms such as Airbnb and Vrbo. A registration can’t be transferred when the property is sold: the new owner has to register before operating.
• The provincial fee is $50 for a primary residence and $2,000 for a commercial rental in the Halifax area.
• Nova Scotia’s 14% HST applies, and Halifax charges a 3% marketing levy on accommodation, including short-term rentals that must register with the province.

Insurance for short-term rentals

A standard home insurance policy often excludes or limits short-term rental activity. If a guest is injured or damages your property and you haven’t disclosed STR use, your insurer can deny the claim.

What Airbnb’s damage protection does NOT cover

• Normal wear and tear.
• Loss from acts of nature such as earthquakes and hurricanes.
• Cleaning from normal check-out tasks such as laundry, dishes and trash.
• Loss of cash.

It doesn’t replace your own policy. Some insurers sell a home-sharing endorsement that adds short-term rental coverage to a home policy; others require a separate short-term rental or commercial policy, and how often you host affects the price. Tell your insurer before the first guest arrives.

Tax obligations by province

Rates are for short stays. Longer stays are exempt from most of these taxes: for example, Alberta’s tourism levy and Toronto’s MAT don’t apply to stays of 28 consecutive days or more.

Income tax and deductions

Short-term rental income is reported on Form T776 as rental income, or on Form T2125 as business income if you provide hotel-like services. Hosting in part of your own home means splitting shared costs by the share of space and time used for guests, and can affect the principal residence exemption on the rented part if you make structural changes or claim depreciation. Expenses and capital cost allowance for a short-term rental that operates where the province or municipality doesn’t permit it, or without the registration, licence or permit it requires, can’t be deducted for the days it was non-compliant (lines 9366 and 9367 of Form T776). The rules and a worked example are in Airbnb tax rules; general rental reporting is in how rental income is taxed.

Compliance checklist

Before your first guest arrives, work through this list:

1. Check municipal bylaws: confirm STRs are permitted in your zone and dwelling type.
2. Obtain required licences: register with the city and/or province.
3. Review mortgage terms: ensure STR use does not breach your mortgage covenant.
4. Check condo/strata rules: if applicable, confirm your corporation permits STRs.
5. Update home insurance: add an STR endorsement or purchase dedicated coverage.
6. Register for GST/HST if taxable revenue will pass the $30,000 small supplier threshold.
7. Set up expense tracking: separate bank account or dedicated spreadsheet.
8. Display registration number: on every listing, in every ad, on your booking confirmation.
9. Collect and remit taxes: verify which taxes the platform collects vs. which you must remit directly.
10. Renew and report: renew registrations and file accommodation tax reports where required (Toronto, for example, requires a yearly renewal and quarterly MAT reports).

Related pages

• Airbnb mortgage rules
• Short-term rental tax in Canada
• Buying a condo in Canada