Last Updated on January 13, 2025 by Fullhome Airbnb Manager
Table Of Contents
Toronto Airbnb Licensing – Key Takeaways
- Airbnb licensing is a legal requirement for short-term rental hosts in Toronto.
- Licensing ensures compliance with local regulations, provides legal protection for hosts, and helps build trust with guests.
- To obtain a license, hosts must register with the city, pay an annual fee, and meet certain requirements.
- Operating without a license can result in penalties and fines.
Now, let’s dive deeper into each of these points.
What is Airbnb Licensing?
Airbnb licensing refers to the legal permission granted by a city or municipality that allows homeowners to rent out their properties on short-term rental platforms like Airbnb. In Toronto, all short-term rental operators are required to obtain a license to operate legally1.
Understanding Airbnb Licensing Process
The licensing process for Airbnb in Toronto is designed to ensure that all hosts meet the city’s safety, insurance, and zoning requirements. It involves several steps, including:
- Registering as a short-term rental operator with the city.
- Obtaining a valid short-term rental license.
- Complying with the city’s zoning bylaws.
- Maintaining adequate insurance coverage.
- Ensuring the property meets the city’s property standards and fire safety requirements.
Understanding this process is crucial for anyone considering becoming an Airbnb host in Toronto. It not only helps ensure your compliance with the city’s regulations but also provides a clear roadmap for setting up your Airbnb business.
Why is Airbnb Licensing Important?
Ensuring Compliance with Local Regulations
Obtaining an Airbnb license ensures that hosts comply with local regulations. In Toronto, short-term rental operators must register with the City2. This compliance promotes the safe operation of short-term rentals and helps maintain the quality of life in residential neighborhoods3.
Legal Protection for Hosts
Airbnb licensing provides legal protection for hosts. If hosts operate without a license, they may face penalties and fines. By obtaining a license, hosts can avoid these potential legal issues.
Building Trust with Guests
A license can also help build trust with potential guests. When guests see that a host is licensed, they can feel more confident about their stay.
How Does Airbnb Licensing Work in Toronto?
Obtaining a short-term rental license in Toronto involves several steps. Here’s a detailed guide to help you navigate the process:
Step 1: Determine Eligibility
Before you can apply for a license, you need to determine if you’re eligible. In Toronto, you can only operate a short-term rental in your principal residence. This means the home you live in most of the time. You must be the property owner, or if you’re a tenant, you must have your landlord’s permission to operate a short-term rental .
Step 2: Gather Necessary Documentation
You’ll need to provide certain documents when you apply for your license. This includes proof of residence, such as a utility bill or lease agreement, and identification, such as a driver’s license or passport .
Step 3: Register with the City
Once you’ve gathered your documents, you can register with the City of Toronto. The registration process can be completed online and involves filling out a form with your personal information and details about your rental property .
Step 4: Pay the Registration Fee
After you’ve completed the registration form, you’ll need to pay a $50 annual registration fee . This fee is used to cover the costs of administering and enforcing the short-term rental rules.
Step 5: Post Your Registration Number
Once you’ve registered and paid the fee, the City will issue you a registration number. You’re required to post this number in all your online listings .
Step 6: Renew Your Registration Annually
Your short-term rental registration must be renewed every year. The City will send you a notice when it’s time to renew .
Remember, operating a short-term rental without a license can result in penalties and fines. It’s important to understand and follow the licensing process to ensure you’re operating legally.
Requirements for Short-Term Rental Registration in Toronto (Updated January 13, 2025)
Toronto has specific regulations for short-term rentals (STRs), often referred to as “Airbnb licensing,” although it’s officially a registration process. These rules prioritize maintaining long-term housing availability and ensuring responsible hosting. As of January 13, 2025, the following requirements are in effect:
I. Principal Residence Requirement:
The most crucial requirement is that you can only register your principal residence for short-term rentals. This means the property is where you primarily live and use for bills, identification, taxes, and insurance, residing there for at least 180 days per year. You cannot register secondary residences, investment properties, or vacation homes for short-term rentals in Toronto.
II. Registration Process:
All STR operators must register with the City of Toronto through their online portal. The process involves:
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Creating an account on the City’s STR registration portal.
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Providing accurate property details (address, type of dwelling).
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Paying the annual registration fee (currently $375, subject to change).
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Receiving a registration number (STR-XXXX-XXXXXX) via email.
III. Displaying Your Registration Number:
Once registered, you must display your registration number prominently on all online listings (Airbnb, Vrbo, etc.) and in any advertisements.
IV. Rental Limits:
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Entire Home: You can rent your entire principal residence for a maximum of 180 nights per year.
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Partial Unit (Rooms): You can rent up to three rooms within your principal residence for an unlimited number of nights per year, provided you also live in the unit. You cannot rent out all the rooms simultaneously if it effectively becomes a whole-unit rental exceeding the 180-day limit. You can only list one fewer bedroom than the total number of bedrooms on your property.
V. Municipal Accommodation Tax (MAT):
Registered operators must collect and remit a 4% Municipal Accommodation Tax (MAT) on all rentals lasting fewer than 28 consecutive nights. Airbnb automatically collects and remits this tax on your behalf. You are responsible for accurate reporting even if there were no bookings.
VI. Other Key Requirements:
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Minimum Age: Hosts must be 18 years or older.
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Insurance: Ensure you have adequate insurance coverage that explicitly covers short-term rentals. Inform your insurance provider about your Airbnb activity to confirm coverage.
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Safety Compliance: Your property must meet all safety requirements outlined in the Ontario Fire Code and Ontario Building Code, including smoke detectors, carbon monoxide detectors, fire extinguishers, and clearly marked exits.
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Emergency Contact: Provide an alternate emergency contact who can be reached 24/7 and is authorized to act on your behalf in case of emergencies. Provide this contact information to guests.
VII. Penalties for Non-Compliance:
Operating an unregistered or non-compliant STR can lead to severe penalties, including fines of up to $100,000 per offense for individuals and $500,000 for corporations. The City of Toronto actively enforces these regulations and monitors online listings for compliance.
VIII. Ongoing Responsibilities:
It is the host’s responsibility to stay informed about and comply with all current STR regulations. You must renew your registration annually and keep your contact information updated with the City. If any details about your rental change (e.g., the number of rooms rented), you must inform the City within six days.
Benefits of Having an Airbnb License
Having an Airbnb license comes with several benefits:
Legal Operation
First and foremost, having a license allows you to operate your Airbnb legally. This means you can avoid potential fines and penalties that come with non-compliance[^9^].
Increased Trust
Guests often feel more comfortable booking with licensed hosts. Knowing that a host has met all the necessary regulatory requirements can give guests peace of mind and increase their confidence in their booking decision
Access to Support and Resources
By obtaining a license, hosts may also gain access to support and resources from both Airbnb and the local government. This can include information on best practices for hosting, updates on regulation changes, and more .
Importance of Compliance
Compliance with local regulations, including obtaining an Airbnb license, is crucial for several reasons:
Avoiding Penalties
Non-compliance can result in penalties, including fines and the potential loss of the ability to host on Airbnb .
Maintaining Good Relationships with Neighbors and the Community
Compliance with regulations helps maintain good relationships with neighbors and the local community. It shows respect for local laws and can help prevent issues like noise complaints or other disruptions .
Ensuring Guest Safety
Many regulations, including those related to licensing, are in place to ensure guest safety. By complying with these regulations, hosts can provide a safe and enjoyable experience for their guest
FAQs
Q: How much does it cost to get an Airbnb license in Toronto?
A: The annual registration fee for a short-term rental license in Toronto is $505.
Q: Can I rent out my second home on Airbnb in Toronto?
A: No, you can only rent out your principal residence on Airbnb in Toronto6.
Q: What happens if I don’t get a license for my Airbnb in Toronto?
A: If you operate an Airbnb without a license in Toronto, you may face penalties and fines.
Conclusion
Airbnb licensing in Toronto is crucial for hosts . It ensures compliance with local regulations, provides legal protection for hosts, and helps build trust with guests. If you’re considering becoming an Airbnb host in Toronto, make sure you understand the licensing requirements and process.
About FullHome
At FullHome, we’re dedicated to helping hosts navigate the world of Short-term rentals and Airbnb property management in Toronto. Whether you need help understanding licensing requirements or managing your property, we’re here to help. Contact us today to learn more about our services.
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