What is the Toronto Short-Term Rental Bylaw?

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How it works

To legally operate a short-term rental in Toronto, a host must first confirm the property is their principal residence. They then proceed to register with the city's licensing and registration system online, which involves paying an annual fee to obtain a registration number.

This number must be prominently displayed on any listing platform, such as Airbnb or Vrbo. As part of their operational duties, hosts are required to charge guests the Municipal Accommodation Tax (MAT) and remit these funds to the city.

The city enforces these rules by working with platforms to ensure listings are compliant and by investigating complaints against unregistered or non-compliant properties.

Why it matters

Compliance with the Toronto Short-Term Rental Bylaw is essential for any host operating in the city to avoid significant fines, penalties, and the potential delisting of their property. The regulation fundamentally shapes the local market by restricting short-term rentals to principal residences only, thereby limiting the inventory of available properties.

This framework aims to protect the city's long-term housing supply while still allowing residents to participate in the tourism economy. For guests, it provides a layer of assurance that the rental they book is operating legally.

Examples

• A condo owner in downtown Toronto wants to rent out their entire unit on Airbnb for three months while they travel for work. Under the bylaw, they can only do so for a maximum of 180 nights per year and must ensure the condo is their registered principal residence.
• Renting out a basement apartment with a separate entrance is not permitted if it qualifies as a separate, self-contained unit, as the bylaw only allows for the rental of the host's single principal residence.
• A homeowner registers with the City of Toronto and rents out a spare bedroom in their house year-round while they continue to live there. This practice is permitted as it involves renting a portion of their principal residence.
• An investor owns three different properties in Toronto and lists them all for short-term rental. This operation is illegal under the bylaw because a person can only have one principal residence, making it impossible to register the other two properties.