How to Start a Short-Term Rental Business in Canada

Start a short-term rental business in Canada: the principal-residence rule that decides most plans, city and provincial registration in Toronto, Vancouver, BC, and Quebec, GST/HST at $30,000, insurance, and honest pricing.

Written October 25, 2026 · Edited November 7, 2026 · 14 min read

Applies in: across Canada

The short answer

There is no single Canadian short-term rental business. There are city rules, provincial rules, strata rules, and tax rules, and they stack. The rule that decides most plans is the principal-residence rule: in Toronto, Vancouver, and every BC municipality with a population over 10,000, you may only list the home you actually live in. If your plan is to buy a property you do not live in and rent it nightly, that plan fails in those cities before any application is filed. Everywhere else, the same question still applies at the city level, because cities, strata corporations, and landlords can all say no even when the province says yes.

This guide covers the Canada-wide shape: the definition problem, the four registration systems that matter most, business setup, tax, insurance, and pricing. It does not replace the city page for your address. Read the city and provincial pages for your exact property before you spend money on furniture.

Step 1: Learn your local definition first

Short-term rental means a different number of days in different places, and the number decides which rules apply:

Toronto: a stay of less than 28 consecutive days, under Municipal Code Chapter 547.
Vancouver and BC's provincial framework: a stay of fewer than 90 consecutive days, after Vancouver aligned its bylaws with the provincial Act in October 2024. Before that alignment, Vancouver used 30 days, so older guides quoting 30 days are out of date.
Quebec: a stay of 31 consecutive days or less, under the Tourist Accommodation Act.
Richmond, BC: a stay of less than 90 consecutive days, but only part of the home you live in — whole-home rental is not permitted there at all, as the Richmond guide on this site explains.

Do not carry one city's number into another city. A 40-day stay is a short-term rental in Vancouver and a long-term arrangement in Toronto. A 29-day stay is short-term in Quebec and outside the Toronto bylaw entirely.

Step 2: Test the plan against the principal-residence rule

In Toronto, only your principal residence qualifies, you are deemed to have only one at a time, and you may hold only one registration. The same shape holds in Vancouver: only your principal residence, one licence per person, and no licence for a corporation or society.

BC's provincial rule is slightly wider: in communities where it applies, it covers your principal residence plus at most one secondary suite or accessory dwelling unit on the same property. That provincial wording does not override a stricter city rule. Richmond bars its licence in a secondary suite, coach house, or granny flat. Vancouver's bylaw is tighter than the province's in the same way.

Some BC municipalities can opt out of the principal residence requirement where vacancy thresholds are met. Kelowna did so from June 1, 2026. An opt-out is a reason to check the city page, not a reason to assume your city opted out.

If the property is not your principal residence and your city has the rule, stop here. No licence choice, platform, or business structure fixes that. Your options are a genuinely long-term tenancy, a city without the rule, or a different property.

Step 3: Register in Toronto

Toronto registers operators, not properties. The steps that matter:

Register before listing. Registration is mandatory before any stay under 28 days is advertised.
Prove principal residence with government ID and supporting documents. The name and address on the application must match the ID exactly.
Choose entire-unit or partial-unit at registration. Entire-unit rentals are capped at 180 nights per calendar year. Partial-unit rentals, where you rent rooms while you live in the home, have no night cap and are limited to three bedrooms. You cannot switch types until renewal.
Display the registration number on every listing, invoice, contract, and receipt. The format starts with STR-.
Collect and remit Municipal Accommodation Tax on stays under 28 days. The rate is 6 percent. It was temporarily raised to 8.5 percent from June 2025 through July 31, 2026, then returned to 6 percent on August 1, 2026. Platforms usually collect and remit for platform bookings; direct bookings are your job, remitted quarterly.
Check the condo or strata rules separately. A condo board can prohibit short-term rental regardless of what the city permits, and that prohibition stands.

Toronto's registration fee is annual. This guide does not quote the amount, because third-party guides currently disagree on it. Confirm the current fee on the City of Toronto portal before you apply, and do not budget from a vendor site's figure.

Step 4: Register in Vancouver and BC

Vancouver and BC are two registrations, not one:

City of Vancouver business licence. Required before listing, one per person, principal residence only, licence number on every listing. Strata and landlord approval are required where they apply.
BC provincial registry registration. Required for every host who lists on a platform anywhere in BC, including hosts outside the principal residence areas. Apply online through a BC Registries account with a BC Services Card or BCeID. The registration number must appear on every listing from May 1, 2025, and platforms must validate numbers against registry data and remove listings without a valid number.
Fees are $100 per year plus a $1.50 service fee for a rental where you live, and $450 per year plus a $1.50 service fee where you do not live, such as a secondary suite or a secondary property in an area without the principal residence requirement. Registrations renew annually.
Proof of principal residence is required where the requirement applies. Expect to provide identity documents plus supporting documents showing the address, with names and addresses matching across all of them.

Work in this order: city licence first where the city requires one, then provincial registration with the city licence in hand where the registry asks for it. A provincial number alone does not cure a missing city licence.

Step 5: Register in Quebec

Quebec's system is the strictest on paper and the most uniform across the province:

Every tourist accommodation offer of 31 consecutive days or less requires registration with the Corporation de l'industrie touristique du Quebec (CITQ), whether it is a principal residence, a secondary residence, a room, or a chalet, and whether you rent it for a weekend or a month. There is no occasional-use exception.
Get municipal conformity first. The municipality confirms the use is allowed at that address, and CITQ will not process an application without that notice.
CITQ fees for 2026 are $54 per year for a principal-residence establishment, $156 per year for a general tourist accommodation establishment, and $131 per year for a youth accommodation establishment. The certificate is valid for 12 months and renews annually. Display it where guests can see it, and put the registration number and expiry date on every listing and advertisement.
Carry at least $2 million in civil liability insurance. This is a hard requirement of the tourist accommodation regime, not a recommendation, and a standard homeowner or condo policy usually does not cover commercial short-term rental activity.
Montreal layers its own permit on top of CITQ registration for principal-residence rentals, with its own application order: apply online, verify identity in person at an Acces Montreal office with photo ID and a printed provincial Notice of Assessment, register with CITQ, send the CITQ number to the city, then wait for the permit by email.

Fines for operating without CITQ registration run into the thousands for a first offence and higher for repeat offences. Platforms face their own fines for listing Quebec properties without a valid registration number, which is why listings disappear rather than merely being warned.

Step 6: Set up the business properly

Registration as a host is not the same as setting up a business. Do both:

Choose a structure. Most solo hosts start as a sole proprietorship and reconsider incorporation later, when income, liability, or a second property makes the extra paperwork worthwhile.
Register a business name with your province if you trade under a name other than your own legal name. Provinces set their own fees and renewal rules.
Get a Canada Revenue Agency business number through Business Registration Online. It is free, and you need it before you can open a GST/HST account.
Check the municipal business licence question separately from the short-term rental registration. Some cities treat the rental registration as the licence; others require a general business licence as well. The federal BizPaL tool lists permits by address and activity.
Open a separate bank account for rental money, even as a sole proprietor. Platform payouts, cleaning costs, tax, and damage deposits get tangled fast in a personal account, and clean records are what make the tax step survivable.

Step 7: Handle GST/HST and income tax from the first booking

Short-term accommodation is a taxable supply, so the small-supplier rule governs:

While taxable supplies are $30,000 or less in a single calendar quarter and over four consecutive calendar quarters, you are a small supplier and GST/HST registration is optional.
Pass $30,000 in a single calendar quarter and you stop being a small supplier with the sale that took you over. Register within 29 days and charge GST/HST on that sale and every sale after it.
Pass $30,000 over four consecutive quarters without passing it in any one quarter and you stop being a small supplier at the end of the month after that quarter.
Below the threshold, registering early is allowed, and it lets you claim input tax credits on business costs such as cleaning, platform fees, and furnishings.

Two traps sit beside the threshold. First, Municipal Accommodation Tax and GST/HST are different taxes with different collectors: Toronto's MAT, BC's accommodation taxes, and Quebec's lodging tax do not substitute for GST/HST, and platform collection of one does not guarantee collection of the other. Check each booking channel's tax handling line by line. Second, since 2024, federal law denies expense deductions for any day a short-term rental operated without the licence, registration, or permit the province or city required. An unlicensed day costs the fine risk and the write-off.

Keep records per property and per night: booking dates, amounts collected, taxes collected and remitted, platform fees, cleaning costs, and the registration numbers in force on each date. If a platform changes its tax collection, your records are the only proof of what was actually remitted.

Step 8: Fix insurance before the first guest

A standard homeowner or condo policy usually excludes paying guests, and a platform's host guarantee is not insurance. Before listing:

Tell your insurer, in writing, that the property will host paying short-term guests, and get the answer in writing. A verbal "you're probably covered" is worth nothing after a claim.
In Quebec, the $2 million civil liability floor is a registration requirement, so the policy must meet it before CITQ registration, not after.
Cover the gaps a property policy leaves: guest injury, guest property damage, damage guests cause to the property, and loss of rental income during repairs. Price the policy into the nightly rate rather than treating it as an optional extra.
Check the strata insurance position separately if the unit is in a strata or condo corporation. The corporation's policy and your unit policy answer different questions, and a strata bylaw breach can void cover.

If no insurer will cover the setup at a price the nightly rate supports, that is information, not a paperwork problem. A rental that cannot be insured at a viable price is not yet a viable rental.

Step 9: Price from your real costs

Short-term rental pricing fails in one predictable way: hosts copy a neighbour's nightly rate and forget the costs the neighbour is not showing. Build the rate from your own numbers:

Fixed monthly costs: mortgage or rent share, property tax share, insurance, platform subscriptions, and the registration and licence fees amortized over the year.
Per-stay costs: cleaning, laundry, restocking, platform service fees, and payment processing. A cleaning fee that does not cover the cleaner's actual charge is a loss on every booking.
Occupancy reality: a principal-residence rental in Toronto is capped at 180 entire-home nights, and a room rental depends on your own presence. Price for the nights you can actually sell, not 365 nights.
Tax on top: GST/HST once registered, plus MAT or lodging tax where it applies, plus income tax on net rental income. A rate that looks profitable before tax often is not after it.
Seasonality: peak-season rates subsidize shoulder-season vacancy. Set a floor rate below which you would rather leave the calendar closed, and hold it. Discounting into unprofitable nights to chase occupancy is how hosts work harder for less.

A simple test before listing: one month of realistic bookings, at realistic occupancy, minus every cost above, must leave a positive number after tax. If it does not, change the property, the city, or the plan — not the arithmetic.

Step 10: Run it like a small hotel, not a spare room

The operational habits that keep a rental legal and rated well are unglamorous:

One house manual in the unit: check-in and check-out times, wifi, waste and recycling rules, quiet hours, parking, emergency exits, and a 24-hour contact who actually answers.
A cleaning checklist per turnover, with photos before and after, so damage disputes have evidence instead of arguments.
Neighbour habits: introduce yourself before the first guest, share the contact number, and treat the first complaint as a warning, not an insult. Neighbour complaints drive enforcement in every regulated city.
A calendar discipline: block dates you cannot host, never double-book across platforms, and never let an entire-home booking push a Toronto registration past 180 nights. The cap counts calendar nights, not bookings.
An annual renewal diary: Toronto registration, Vancouver licence, BC registry, CITQ certificate, insurance, and strata approvals all renew on different cycles. A lapsed renewal is an unlicensed day, and an unlicensed day now costs the tax deduction too.

Mistakes that cost new short-term rental businesses

Buying an investment property for nightly rental in a principal-residence city, then discovering it cannot be registered.
Treating provincial registration as permission that overrides a city, strata, or landlord ban.
Listing before registration and assuming the platform checked. Platforms validate numbers in BC, but the legal duty is yours in every province.
Quoting a nightly rate without cleaning, platform fees, insurance, and tax in it.
Ignoring the GST/HST threshold until a strong quarter pushes past $30,000, then owing tax on bookings already priced without it.
Letting a registration lapse and operating unlicensed days, which now also lose their expense deductions.
Assuming a homeowner policy covers paying guests, then learning otherwise from a claim denial.
Splitting or shortening stays on paper to dodge a day threshold, which solves nothing and creates a record of the dodge.

The short-term rental startup path in six steps

Test the plan against the principal-residence ruleIn Toronto, Vancouver, and most large BC cities, only your principal residence can be listed short-term. An investment property you do not live in fails this test before any application is filed.
Check the city layerToronto registers operators under Chapter 547. Vancouver requires a city business licence. Montreal layers a city permit on top of Quebec registration. The city layer is where most plans are approved or refused.
Check the provincial layerBritish Columbia requires provincial registry registration for every host on a platform. Quebec requires CITQ registration for every tourist accommodation offer of 31 days or less. Ontario has no province-wide short-term rental registry, so the city layer carries the weight there.
Set up the business and tax accountsRegister a business name if you trade under a name other than your own, get a free Canada Revenue Agency business number, and track revenue against the GST/HST $30,000 small-supplier threshold from the first booking.
Fix insurance before the first guestA standard homeowner or condo policy usually does not cover paying guests. Quebec requires at least $2 million in civil liability insurance. Get short-term rental cover in writing from your insurer.
List with the numbers showingPut every required registration and licence number on every listing and advertisement. Platforms in BC validate registration numbers, and missing numbers are the easiest enforcement trigger to avoid.

What the registration paperwork costs

BC provincial registry, rental where you live	$100 per year plus a $1.50 service fee
BC provincial registry, rental where you do not live	$450 per year plus a $1.50 service fee
Quebec CITQ, principal-residence establishment	$54 per year
Quebec CITQ, general tourist accommodation establishment	$156 per year
Quebec CITQ, youth accommodation establishment	$131 per year
Toronto and Vancouver city registration and licence fees	Varies — confirm the current amount on the city portal before applying

Toronto and Vancouver fees are left out of this table on purpose: third-party guides quote different current amounts, and the city portal is the only reliable figure. Do not budget from a fee quoted on a vendor site.

Questions people ask

Can I buy a condo as an investment and rent it out short-term in Canada?

In Toronto and Vancouver, no. Both cities limit short-term rentals to the operator's principal residence, and each operator may hold only one registration or licence. An investment property you do not live in cannot be registered in either city. In Quebec, an investment property can be registered with CITQ as a general tourist accommodation establishment, but zoning and municipal rules still decide whether that address qualifies. In smaller BC communities without the principal residence requirement, a secondary property can be registered at the higher $450 fee, but the city and strata rules still apply.

How many nights a year can I rent my whole home in Toronto?

180 nights per calendar year for an entire-unit registration. If you rent rooms in the home while you continue living there, that is a partial-unit registration, which has no night cap but is limited to three bedrooms. You choose one type at registration and cannot switch until renewal. Every short-term night counts, including nights rented earlier in the year as rooms under an entire-unit registration.

Do I need both a city licence and a provincial registration in BC?

Yes, where both apply. Vancouver requires a city business licence and BC provincial registry registration, and both numbers go on every listing. The provincial registry covers every host who lists on a platform anywhere in BC, including places without a principal residence requirement. Provincial registration does not override a city or strata rule that is stricter, as the Richmond guide on this site shows for whole-home rentals.

Do I need CITQ registration in Quebec if I only rent a few days a year?

Yes. Under Quebec's Tourist Accommodation Act, any offer of tourist accommodation for 31 consecutive days or less, for payment, requires registration, even for a principal residence, even for a single room, and even for a few days a year. The law provides no occasional-use exception. You need municipal conformity first, then [CITQ registration](https://citq.qc.ca/en/foireauxquestions.php), and the certificate is valid for 12 months.

When do I have to register for GST/HST on short-term rental income?

Short-term accommodation is a taxable supply, so the normal small-supplier rule applies. You do not have to register while your taxable supplies are $30,000 or less in a single calendar quarter and over four consecutive calendar quarters. Pass $30,000 in a single quarter and you stop being a small supplier with the sale that took you over, and you register within 29 days. Pass it over four quarters without passing it in any one quarter and you stop being a small supplier at the end of the month after that quarter. Below the threshold, registration is optional, and registering early lets you claim input tax credits on business costs.

What happens if I operate without the required licence or registration?

Three consequences stack. The city or province can fine you and remove the listing: BC platforms must validate registration numbers and take down listings without one, and Quebec fines for operating without CITQ registration run into the thousands. Since 2024, section 67.7 of the federal Income Tax Act denies the deduction of expenses for any day a short-term rental operated without the licence, registration, or permit the province or city required. And a strata corporation or landlord can still prohibit the rental even when the city allows it.

How is a short-term rental different from a mid-term furnished rental?

By the local day threshold, and the threshold differs by place: under 28 consecutive days in Toronto, under 90 consecutive days in Vancouver and under BC's provincial framework, and 31 consecutive days or less in Quebec. A stay at or above the local threshold falls outside that place's short-term rental rules. That only helps if the stay is genuinely that long and properly documented. Structuring short stays to look long, or splitting one stay across bookings, is evasion, not a loophole, and it still leaves the tax and insurance questions unanswered.

How to Start a Short-Term Rental Business in Canada

The short answer

Step 1: Learn your local definition first

Step 2: Test the plan against the principal-residence rule

Step 3: Register in Toronto

Step 4: Register in Vancouver and BC

Step 5: Register in Quebec

Step 6: Set up the business properly

Step 7: Handle GST/HST and income tax from the first booking

Step 8: Fix insurance before the first guest

Step 9: Price from your real costs

Step 10: Run it like a small hotel, not a spare room

Mistakes that cost new short-term rental businesses

The short-term rental startup path in six steps

What the registration paperwork costs

Questions people ask

Keep going

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Sources

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