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As short-term rentals have
become prolific worldwide, most governmental authorities have realized that
the sharing economy is here to stay, and that regulating short-term rentals
makes more sense than trying to ban them outright.
In late December, 2017 and
early January, 2018, the City of Toronto (the “City”) adopted regulations
regarding the licensing, registration, and regulation of short-term rental
companies and operators (i.e. hosts).
Those regulations permit
short-term rentals (rentals that are less than 28 consecutive days) only in
the principal residence of owners and tenants. If less than the entire
principal residence is being rented on a short-term basis, no more than three
bedrooms may be rented on a short-term basis. Hosts are deemed to have only
one principal residence at any one time.
The regulations also require
hosts to register with the City and pay an annual registration fee of
$50. Short-term rental companies must be licensed and pay a one-time
licence fee of $5000 and a fee of $1 for each night booked through the
company.
The City also implemented a 4% Municipal
Accommodation Tax (”MAT”) which applies to short-term rental
companies and hosts.
The City’s zoning by-law
amendment which permits short-term rentals as a use has been appealed to the
Ontario Municipal Board (“OMB”).
For that reason, the short-term rental regulations and the MAT will not come
into force pending the appeal. The appeal is scheduled to be heard on August
30 and 31, 2018. The City does not expect a decision from the OMB for at
least 8 weeks after the hearing.
If the OMB supports the
city’s zoning by-law amendment, the short-term rental regulations and the MAT
will come into force some time after the OMB decision. Enough time will be
given to enable short-term rental companies and hosts to submit applications
for licences/registration. Details about the collection and remittance of the
MAT will also be made available at that time.
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Condo buildings are also imposing their own versions of minimum rental periods.
