Websites such as Airbnb, VRBO, and HomeAway help property owners and tenants rent their home or part of it – which means strangers often have keys, front door codes, and gate openers. This can bring parking problems, noise, and crime into previously quiet residential communities.

Who has authority over short-term rentals?

Strata corporations and the local municipality both have authority.

1.  Under the Strata Property Act, Part 8 - Rentals, a strata corporation has the power to establish and enforce rental bylaws, which may include forbidding rentals or limiting the number of rentals. This is because property owners don't want to share their pool, exercise equipment, gardens, and visitor parking with short-term renters.

2.  Municipalities. In BC, short-term rentals are under municipal jurisdiction. Rental periods of less than 30 consecutive days are typically considered tourist accommodation.

Depending on the municipality, short-term rentals may be:

  • allowed under a specific bylaw, for example, Whistler through its Zoning and Parking Bylaw

  • allowed under a residential zoning bylaw, for example, Vancouver if the property owner is on site and runs a legal bed and breakfast (B&B)

  • not allowed

  • not dealt with

Property owners must comply with bylaws

If a municipality permits short-term rentals, property owners have to comply with local zoning and business licensing requirements, strata bylaws, and insurance requirements.

Property owners must understand:

  • the tax implications set out by Canada Revenue Agency and the BC government

  • the financial risks and liability involved in renting a home or room(s)

  • the insurance coverage required

Insurance issues

If property owners are renting their apartment, a room, or their entire home, they must notify their insurance company.

“The key is disclosure,” says Trudy Lancelyn, Deputy Executive Director of the Insurance Brokers Association of BC. “Talk with your insurance broker because short-term rentals may affect coverage.”

Renting is a material change of use and home owners will typically be required to:

  • change their insurance to rented dwelling coverage;

  • remove all valuables, breakables, and jewellery; and

  • pay a surcharge of as much as 25 per cent on the premium.

A policy may include a “mysterious disappearance restriction.” This covers any items that go missing, and typically requires there are signs of forced entry.

Vancouver

In November 2017, Vancouver council approved new regulations for short term rentals of less than 30 days, imposing multiple requirements on owners and tenants marketing short-term rentals on sites such as Airbnb, VRBO and HomeAway.

On April 18, 2018, City council will formally enact these new short-term regulations.

Once passed, owners or renters will be required to apply for a new short term rental business licence through an easy-to-use online process. The license fee is $49 and there is also a one-time $54 administrative fee.   

AllowedNot Allowed

It's your principal residence, where you live most the year and the residential address you use for bills, identification, taxes and insurance.

It's not your principal residence - you don't live there most of the year.

It's a legal dwelling unit - a home with an address that complies with all applicable regulations, including building code and fire safety.

It's an illegal dwelling unit - it doesn't comply with applicable regulations, including building code and fire safety.
If you're in a strata, bylaws support short-term rentals in your building.

If you live in a strata, your strata bylaws don't support short-term rentals in your building.

If you're renting, your landlord allows you to sublet our home as a short-term rental.

If you're a renter, your landlord doesn't allow you to sublet your home as a short-term rental.
You have a short-term rental business licence.  

Short-term rentals will be permitted in a principal residence which include a secondary suite, laneway house, or lock-off unit − provided it’s a principal residence.

Short-term rentals won’t be permitted in non-principal residences, including secondary suites and laneway homes. However, if the rental vacancy rate climbs to four per cent, the city will review this ban.

Secondary homes rented short-term by investors will remain illegal.

Legislation and regulations affecting short-term rentals

Property owners renting short-term must also comply with the following:

  • Goods and Services Tax (GST). If rental income exceeds $30,000 per year, the GST must be paid. Contact: 1-800-959-5525. To register for the GST, complete form RC1, Request for a Business Number or phone 1-800-959-5525.

  • Health Act and Regulation. Maintains public health by preventing/removing health hazards. The Swimming Pool, Spray Pool and Wading Pool Regulations govern construction and maintenance of swimming pools, including permits and operation.

  • Hotel Keepers Act and Hotel Guest Registration Act. Oversees short-term rentals to overnight guests, including Airbnbs, B&Bs, boarding houses, homes, privately owned vacation homes, motels, hotels, and resorts of four or more units.

  • Income Tax Act. Applies to property owners receiving rental income from the rental of a property. If owners provide services, such as cleaning and meals, they may be considered to be carrying on a business and different rules apply. Non-residents earning rental income from property in Canada must pay a 25 per cent withholding tax.

  • Provincial Sales Tax Act. If a property owner sells goods at a B&B, such as toiletries or souvenirs, they must register and collect PST. Here is more information.

  • Provincial Sales Tax Act - Accommodation. Sections 122-125 of the Act regulate the charging of PST on short-term/overnight accommodation including Airbnbs, B&Bs, boarding houses, cabins, hotels, and motels of 4+ units. This function used to be included in the Hotel Room Tax Act, which has been repealed. Information on the collection of the accommodation PST and the municipal and regional district tax (MRDT) is found in this recently updated government bulletin. 

  • Residential Tenancy Act. Covers rentals of 28+ days. Landlords cannot evict tenants to rent suites on a short-term basis. Tenants cannot rent suites without the landlord’s permission.

  • Strata Property Act. Covers strata property in BC, including bylaws and rules, and rentals.