An appeal against Toronto’s short-term rental regulations has been dismissed.
The ruling by the Local Planning Appeal Tribunal Nov. 18, upholds the adoption of zoning bylaw amendments for short-term rentals by city council in December 2017.
A short-term rental is defined as less than 28 consecutive days. Longer stays do not need to follow the regulations.
The new rules permit short-term rentals in principal residences only. This means owners of a second investment property are not able to rent it for less than 28 days at a time.
People can rent up to three rooms for an unlimited number of nights per year or the entire home for a maximum of 180 nights per year (up to a maximum of 28 days per stay). The rules do not prevent subletting for six months straight and then short-term periods the rest of the time to a maximum of about half a year.
Both homeowners and tenants can participate. However, homeowners can’t use their basement apartments for short-term rentals. Only the full-time tenant can let those units.
Once the City of Toronto’s registration system is built, third party rental sites like Airbnb and VRBO will have to obtain a licence. This involves payment of a one-time licence application fee of $5,000 and a fee of $1 for every night booked through the company. Licensed companies will be required to ensure all listings have valid registration numbers, as well as procedures in place to respond to complaints and to deal with problematic operators (or hosts, as Airbnb calls them). They will also need to keep records of short-term rental activity and provide them to the city upon request.
People who rent their homes short-term will be required to pay a $50 registration fee each year. If not, they could be fined up to $100,000. Short-term rental operators will also need to post their city-issued registration number in all advertisements, pay a 4% municipal accommodation tax on rentals that are less than 28 consecutive days, and keep records of short-term rental activity for up to three years and provide them to the city, if requested. Records must include the number of nights rented, the nightly and total price charged for each rental, and whether the rental was for the entire unit or just part of it.
It’s not clear how long it will take the city to implement its licence and registration system, or how it intends to enforce the new rules.
Earlier this month, a group of landlords for Airbnb-style rentals announced they will be appealing the provincial planning tribunal’s decision, citing it contains errors in law. This could lead to an overturn of the ruling or a rehearing.