Temporary accommodation typically rented for fewer than 28 consecutive days, commonly listed on platforms like Airbnb and VRBO. In Toronto, short-term rentals are subject to municipal licensing and can only be operated in the host's principal residence. Operators must register with the city, collect and remit the Municipal Accommodation Tax, and comply with zoning restrictions. Many condo corporations also prohibit or restrict short-term rentals through their rules or declarations.
Why It Matters
Toronto's short-term rental regulations are strict and actively enforced, with significant fines for non-compliance. You cannot legally operate an STR in a property that isn't your principal residence, which limits the Airbnb investment strategy many people envision. Before buying a property to short-term rent, verify the municipal rules and your condo corporation's policies -- the penalties for operating illegally can be substantial.
Real-World Example
You own a one-bedroom condo at Front and Spadina and list it on Airbnb as a short-term rental. You register with the City of Toronto, obtain your STR licence number, and list the unit -- which is your principal residence -- while you travel for work. You charge $180 per night and achieve 70% occupancy over the summer months. However, your condo corporation sends you a notice: the building's declaration was amended to prohibit short-term rentals. You are forced to delist the unit and switch to a long-term tenant, losing the premium nightly rates you were counting on.
Ontario & GTA Context
The City of Toronto's short-term rental by-law (Municipal Code Chapter 547) restricts STRs to the operator's principal residence only. Operators must register with the city and pay an annual fee, display their registration number on all listings, collect and remit the 6% Municipal Accommodation Tax, and maintain $2 million in liability insurance. Operating an STR in a non-principal residence carries fines of up to $100,000 per offence. The city actively enforces these rules through a dedicated compliance team. Other GTA municipalities like Mississauga and Brampton have their own STR regulations.
How It Works in Practice
Before purchasing a property with STR income in mind, verify the municipal rules in your specific municipality and the condo corporation's rules if applicable. Many GTA condo declarations now prohibit or restrict short-term rentals. Even in buildings that allow them, the principal residence requirement in Toronto means you cannot operate an STR empire from multiple properties. Run your numbers with long-term rental income as the fallback scenario.
Common Questions
Can I Airbnb my condo in Toronto?▾
What are the fines for illegal short-term rentals in Toronto?▾
Do I need to pay taxes on short-term rental income in Ontario?▾
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