6 Tips to Successfully Obtain your Toronto Airbnb License
Are you planning to list your property on popular short-term rental platforms like Airbnb in Toronto? While listing your Toronto property on Airbnb can be a great source of income, it’s important to understand the City’s licensing requirements to ensure the success of your listing.
We have extensive experience with Toronto Airbnb property management, and we’ve helped many property owners successfully complete the steps required to obtain a license with the City.
Here are 6 tips for securing your Toronto short-term rental license:
Understanding Toronto's Short-Term Rental Rules
The City of Toronto enacted regulations governing short-term rentals to balance the economic benefits of the industry with concerns about housing availability and affordability. These regulations, which came into effect on June 1, 2018, require all short-term rental hosts to obtain a valid license before listing their properties on any platform. The license is mandatory for rentals lasting less than 28 consecutive days in any residential property, including houses, apartments, and condominiums.
2. Eligibility and Application Process
To begin the process, ensure that your property is eligible for short-term rental by checking zoning restrictions and building bylaws in your area. There are designated condo buildings in Toronto that allow short term rentals, so be sure to check with yours. Some neighborhoods may have specific rules or outright bans on short-term rentals, so it's essential to confirm your property's suitability.
Next, visit the City of Toronto's official website to access the short-term rental license application. Be prepared to provide essential information about your property, including the address, ownership details, and contact information. Additionally, you may need to submit documents such as proof of ownership, insurance coverage, and compliance with safety standards, including smoke detectors and carbon monoxide alarms.
You will also need to provide evidence that the property is your primary residence by submitting a form of government-issued ID stating the property’s address.
3. Familiarizing with Safety Requirements
As part of the license application process, Toronto has stringent safety requirements to ensure the well-being of guests and neighboring properties. Hosts must meet specific safety standards, including having a fire extinguisher on each floor and providing clear exit paths in case of emergencies. Additionally, the property must be compliant with electrical and structural safety codes.
4. Tax Obligations
As a short-term rental host in Toronto, you are responsible for understanding and fulfilling your tax obligations. The City of Toronto charges a 6% Municipal Accommodation Tax (MAT) on short-term rentals, which must be collected from guests and remitted to the city. Each quarter, Airbnb hosts are required to submit their earnings to the city and pay the tax. Ensure that you keep accurate records of all transactions to streamline the tax reporting process.
5. Licensing Fees and Renewals
When applying for a short-term rental license, hosts are required to pay an application fee. The fee varies depending on the type of property and the duration of the license. It's crucial to keep track of the license's expiration date to avoid any disruptions in your short-term rental activities. Plan ahead for timely renewals to maintain compliance with Toronto's regulations.
6. Complying with Guest Restrictions
Toronto's short-term rental regulations also impose specific guest restrictions on hosts. For instance, hosts are not allowed to rent out secondary suites, such as basement apartments or guesthouses. Additionally, the maximum number of bedrooms available for short-term rental may be limited. It is vital to familiarize yourself with these restrictions to avoid potential legal issues.
Navigating Toronto's short-term rental license requirement might seem daunting at first, but with the right knowledge and preparation, the process can be smooth and rewarding. At Sunrae Stays, we are local experts in the Toronto Airbnb market and we can help you navigate this process in order to start generating income.
By understanding the rules, ensuring safety compliance, and fulfilling tax obligations, you can confidently list your property as a vacation rental and welcome guests from around the world to experience the charm of Toronto while remaining a responsible host.