Toronto’s New Short-Term Rental By-Laws
As of January 1, 2025, Toronto has implemented stricter regulations on short-term rentals, significantly impacting property owners, tenants, and short-term rental platforms like Airbnb and Vrbo. These changes aim to improve housing availability, ensure compliance with city zoning and licensing rules, and address concerns over housing affordability and neighborhood stability.
Key Changes in the New By-Laws
Increased Registration Fees: All short-term rental operators must renew their city registration annually, with fees rising from $50 to $150 per year. This increase is intended to cover administrative costs and fund enforcement measures against illegal rentals.
Primary Residence Requirement: Only a host’s principal residence can be rented short-term. Investment properties and secondary units no longer qualify, making it illegal for property investors to list multiple units for short-term stays.
Limitations on Rental Nights: Short-term rentals are capped at 180 nights per year for entire homes, ensuring that properties are available primarily for long-term residents rather than tourists.
Higher Fines for Non-Compliance: Property owners operating without a license or exceeding rental limits face fines up to $10,000 per offense. Additionally, repeat violators may face further penalties, including permanent bans from the registry.
Mandatory Platform Compliance: Online rental platforms such as Airbnb and Vrbo must ensure that all listings comply with Toronto’s short-term rental regulations. Failure to remove unregistered listings can result in fines against the platform itself.
Tenant Restrictions: Tenants who sublet their units on short-term rental platforms must obtain landlord permission and comply with residential lease agreements. Unauthorized subletting can result in eviction.
Who This Affects
Homeowners looking to rent spare rooms must ensure compliance with primary residence rules, as secondary properties are no longer eligible.
Landlords cannot list basement apartments or secondary suites as short-term rentals unless they are part of their primary residence.
Investors who previously relied on short-term rentals may need to convert units to long-term leases, reducing their rental income potential.
Tenants must be aware that unauthorized short-term subletting could lead to eviction and legal action.
Short-term rental platforms are now legally obligated to verify and enforce compliance with the new rules.
How to Register and Stay Compliant
Property owners must register with Toronto’s Short-Term Rental Registry through the city’s website, providing proof of residence, valid government-issued identification, and insurance coverage. Failure to register or misrepresenting property details can result in immediate removal from short-term rental platforms and substantial fines.
To ensure compliance:
Apply for registration through the City of Toronto’s online portal.
Pay the annual registration fee of $150.
Display a valid registration number on all short-term rental listings.
Adhere to the 180-night rental cap per year for entire home rentals.
Maintain proper records of rental activity for at least three years, as required by law.
Impact on the Rental Market
With fewer properties available for short-term stays, long-term rental supply may increase, leading to more stable rental prices in Toronto. The city aims to encourage landlords to transition units into the traditional rental market, benefiting long-term tenants. However, some property owners who depended on short-term rental income may find it challenging to adjust to these new restrictions.
Neighborhoods previously impacted by high short-term rental activity may experience reduced noise complaints, improved security, and a stronger sense of community stability. Conversely, tourists and business travelers may face higher accommodation costs and fewer rental options.
What Should Property Owners Do Now?
If you own a property that you previously rented as a short-term rental, it’s crucial to evaluate your options:
Convert your unit to a long-term rental to maintain a steady income stream.
Comply with the new regulations by registering your property and adhering to rental limits.
Sell non-compliant investment properties if short-term rental income was the primary revenue source.
Consult with a lawyer to ensure that you meet all legal requirements and avoid potential fines.
Need Legal Assistance?
If you have questions about the new short-term rental regulations or need guidance on compliance, Omulique Lawyers can help. Our legal team specializes in real estate law, landlord-tenant disputes, and municipal compliance. Contact us today to ensure your rental business aligns with Toronto’s latest by-laws and to protect yourself from legal risks.
