Cowichan Bay, Canada Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Cowichan Bay

Short-term rentals like Airbnb and VRBO have become a popular way for property owners in Cowichan Bay to earn extra income. However, it's important to understand the local regulations before starting an STR business.

In the Cowichan Valley Regional District (CVRD), which includes Cowichan Bay, most residentially zoned parcels do not currently permit short-term rentals. Fewer than 100 parcels throughout the CVRD allow STRs, including the W-8 Zone in Cowichan Bay Village (the Cowichan Bay stilt homes).

Traditional bed and breakfasts (B&Bs) are generally permitted in most residential zones as long as the owner or operator resides within the dwelling and serves breakfast to guests. However, full-unit STRs are typically not allowed.

In April 2024, the CVRD Board of Directors decided to request to opt-in to B.C.'s new principal residence requirement for six electoral areas, which will further restrict STRs. This means STRs will only be allowed in a host's principal residence, plus one secondary suite or accessory dwelling on the same property.

The CVRD is also exploring additional strategies like business licensing to more efficiently regulate STRs in order to "support the tourism economy and avoid negative impacts of transient tourist activity on established neighborhoods." Enforcement of illegal STRs is expected to increase, as the province's new rules will prevent non-compliant listings on platforms like Airbnb.

Local STR operators have expressed concerns about the tightening regulations. On the Canada real estate subreddit, one user shared: "I bought [a condo] that was being used as a vacation rental, but it looks like it will have to go back to being a long-term rental with these new rules." Others argue that restrictions are needed to combat the housing crisis.

To legally operate a short-term rental in Cowichan Bay, carefully review the CVRD's zoning bylaws for your property. If STRs are not permitted, you may need to apply for a zoning amendment or only rent to long-term tenants. With the changing landscape of STR regulations, it's wise to stay informed of any updates from the CVRD and province.

Short-Term Rental Licensing Requirement in Cowichan Bay

Currently, the Cowichan Valley Regional District (CVRD) does not have a specific short-term rental licensing program. However, they are exploring implementing a business licensing system in the future to more effectively regulate STRs.

Property owners must first ensure their property is zoned to allow short-term rentals before operating one. In most residential zones, STRs are not permitted, with the exception of the W-8 Zone in Cowichan Bay Village which allows them in the iconic stilt homes.

If a property is not zoned for STRs, owners can apply for a zoning amendment through the CVRD's development application process. This involves submitting an application form, paying a fee (varies depending on the type of amendment), and going through a review and approval process that includes public consultation. The timeline can vary but typically takes several months.

The CVRD's bylaw enforcement team investigates complaints about illegal short-term rentals. If an STR is found to be operating without proper zoning, the owner may be subject to fines or legal action. With the new provincial restrictions coming into effect in 2024, STR platforms like Airbnb will also be required to remove non-compliant listings.

As the CVRD works on developing a business licensing program for STRs, additional requirements, fees, and processes will likely be put in place for STR operators. It's important for owners to monitor updates from the regional district and ensure they are in compliance with any new licensing rules to avoid penalties. Signing up for the CVRD's PlaceSpeak platform is one way to stay informed on any regulatory changes.

Required Documents for Cowichan Bay Short-Term Rentals

Currently, the Cowichan Valley Regional District (CVRD) does not have a specific licensing program for short-term rentals. The primary requirement is that the property must be zoned to allow STRs, which are limited to a small number of parcels in the region.

To determine if a property is zoned for STRs, owners should:

• Review the CVRD Zoning Bylaws: Consult the zoning bylaw for your electoral area to see if your property's zone permits short-term rentals. Most residential zones do not allow STRs, with some exceptions like the W-8 Zone in Cowichan Bay Village.
• Check the CVRD Web Map: Use the CVRD Web Map to look up your property's zoning information. Enter your address or click on your parcel to view the zoning details.
• Contact CVRD Development Services: If you're unsure about your zoning, email Development Services at ds@cvrd.bc.ca to inquire if your property allows STRs.

If your property is not zoned for short-term rentals, you would need to apply for a zoning amendment through the CVRD's development application process. This involves:

1. Zoning Amendment Application: Submit a completed application form to the CVRD, which can be found on their Development Applications page.
2. Application Fee: Pay the required fee for the zoning amendment. The amount varies depending on the type of amendment requested.
3. Supporting Documents: Provide any necessary supporting information or documents as part of your application, which may include site plans, project descriptions, etc.

The zoning amendment process includes a review by CVRD staff, public consultation, and ultimately requires approval by the CVRD Board through an amending bylaw.

As the CVRD works on implementing a business licensing system for STRs in the future, additional documentation requirements will likely come into effect. STR operators should monitor updates from the regional district to ensure they have all necessary permits and licenses.

It's important to note that operating a short-term rental without proper zoning could result in fines or legal action from the CVRD's bylaw enforcement team. With the new provincial restrictions taking effect, STR platforms like Airbnb will also be required to remove non-compliant listings.

Cowichan Bay Short-Term Rental Taxes

When operating a short-term rental business in Cowichan Bay, it's important to understand the various taxes that apply and their rates. Here's a breakdown of the key taxes to be aware of:

Goods and Services Tax (GST): Short-term rentals (less than 30 consecutive days) are subject to GST, which is currently 5% federally. This tax applies to the rental price, cleaning fees, and any other mandatory charges. As a host, you are required to register for and collect GST if your total annual revenue from short-term rentals exceeds $30,000 in a 12-month period. Even if you don't meet this threshold, voluntarily registering can provide benefits like claiming input tax credits.

Provincial Sales Tax (PST): British Columbia charges 8% PST on short-term accommodations for periods of 26 nights or less. This tax is applied to the listing price, cleaning fees, and guest fees. PST also applies to the service fees charged by platforms like Airbnb, at a rate of 7%.

Municipal and Regional District Tax (MRDT): The MRDT is a tax of 2-3% applied to short-term rentals of 26 nights or less in British Columbia. This tax is levied on the listing price, cleaning fees, and guest fees. The specific rate varies by municipality.

It's the responsibility of short-term rental hosts to register for, collect, and remit these taxes to the appropriate authorities. Failure to do so can result in penalties and legal action.

Potential Write-Offs and Deductions

To help offset the taxes and other costs of running a short-term rental business, there are several expenses you may be able to deduct:

1. Advertising costs
2. Mortgage interest
3. Insurance premiums
4. Interest and bank charges
5. Office expenses
6. Professional fees (legal and accounting)
7. Property management fees
8. Repairs and maintenance
9. Salaries, wages, and benefits for employees
10. Property taxes
11. Travel expenses for rental-related purposes
12. Utilities
13. Motor vehicle expenses
14. Prepaid expenses (prorated)

Keeping detailed records of all your rental income and expenses is crucial for claiming deductions and preparing your tax returns. Consult with a qualified tax professional to ensure you are optimizing your write-offs and maintaining compliance with all tax regulations.

British Columbia Wide Short-Term Rental Rules

In addition to any local regulations in Cowichan Bay, short-term rental hosts must also comply with provincial rules that came into effect on May 1, 2024, under the Short-Term Rental Accommodations Act.

The most significant change is the principal residence requirement. Hosts can only offer short-term rentals (defined as stays under 90 consecutive days) in their principal residence, plus one additional unit like a secondary suite or accessory dwelling on the same property. This rule applies automatically to communities with populations over 10,000.

Cowichan Bay itself is not directly subject to the principal residence requirement based on its population. However, the Cowichan Valley Regional District (CVRD) has opted into this rule effective November 1, 2024. This means STRs in Cowichan Bay will be restricted to principal residences by late 2024.

Other key elements of the province-wide STR regulations include:

1. Requirement for hosts to display a valid business license number on listings, if a license is required by their local government
2. Increased fines for hosts violating local bylaws, up to $3,000 per infraction per day
3. Authority for regional districts like the CVRD to regulate and license STRs similar to municipalities
4. Removal of legal non-conforming use protections for STRs as of May 1, 2024
5. Requirement for short-term rental platforms to share data with the province and remove non-compliant listings starting summer 2024
6. Establishment of a provincial STR registry by early 2025 that hosts must participate in

The province has set up a compliance and enforcement unit to investigate STR violations, with the ability to issue fines ranging from $500-$5,000 per day for hosts and up to $10,000 per day for corporations. However, guests staying in STRs will not face any penalties.

Overall, the combination of provincial and regional district rules will significantly restrict short-term rentals in Cowichan Bay to primary residences only by late 2024. Hosts must carefully review both sets of regulations to avoid costly fines and removal of their listings. The province's goal is to return more STR properties to the long-term rental market to help address the housing crisis.

Does Cowichan Bay Strictly Enforce STR Rules?

Based on discussions from real estate forums like BiggerPockets and Reddit, it appears that Cowichan Bay and the broader Cowichan Valley Regional District (CVRD) are starting to crack down more strictly on illegal short-term rentals, but enforcement has been somewhat limited so far.

As of 2023, most residential zones in the CVRD electoral areas do not permit short-term rentals, with only around 83 parcels having the legal ability to operate STRs. However, hundreds of illegal listings have still been active on platforms like Airbnb and VRBO.

In April 2024, six of the nine CVRD electoral areas, including those near Cowichan Bay, opted into BC's new "principal residence requirement" that will restrict STRs to an operator's primary home starting November 1, 2024. The CVRD is also exploring implementing STR business licenses and increasing bylaw enforcement.

On Reddit, residents have expressed frustration that the crackdown is slow and many illegal STRs are still operating. The CVRD bylaw enforcement team investigates complaints but has not yet imposed major fines or forced widespread removals.

Compared to cities like Vancouver and Victoria, which have had STR restrictions and enforcement for years, the Cowichan region seems to be in earlier stages of reining in the illegal market. But with the new provincial and regional rules taking effect, Cowichan Bay is poised to become much less Airbnb-friendly by late 2024.

In summary, while enforcement has been limited to date, Cowichan Bay and the surrounding CVRD are on a clear trajectory to strictly regulate STRs and eliminate the "mini-hotel" model. Hosts should not expect to be able to operate STRs long-term unless they are in one of the small number of legally zoned properties. The region's priority appears to be cracking down on STRs to help ease the housing crisis.

How to Start a Short-Term Rental Business in Cowichan Bay

Starting a short-term rental business in Cowichan Bay requires careful planning and compliance with local regulations. Here are the key steps to get started:

Determine if your property is zoned for STRs: Most residential zones in the Cowichan Valley Regional District (CVRD) do not allow short-term rentals. Check the zoning for your property using the CVRD Web Map or by contacting CVRD Development Services at ds@cvrd.bc.ca. Only around 83 parcels in the CVRD electoral areas currently permit STRs, including the W-8 Zone in Cowichan Bay Village (the stilt homes). Traditional bed and breakfasts (B&Bs) where the owner lives on-site and provides breakfast are generally allowed in most residential zones. Consider this option if your property isn't zoned for STRs.

Comply with the new principal residence requirement: Starting November 1, 2024, STRs in Cowichan Bay will be restricted to a host's principal residence, plus one additional unit on the same property, due to the CVRD opting into the province's new regulations. Ensure your STR plans align with this rule.

Apply for a zoning amendment if needed: If your property isn't zoned for STRs, you can apply for a zoning amendment through the CVRD's development application process. This involves submitting an application, paying a fee, and going through a review and approval process. Be aware that approval is not guaranteed.

Obtain a business license: Although the CVRD doesn't currently require a specific STR license, they are exploring implementing a business licensing system in the future. Monitor updates from the CVRD and be prepared to obtain a license once this requirement takes effect. You may also need to register your business with the province.

Prepare your property for guests: Ensure your space is clean, well-maintained, and equipped with necessary amenities. Consider hiring a professional photographer to showcase your property in its best light. Develop a comprehensive listing description that highlights your property's unique features and location. Provide a welcome book with house rules, local recommendations, and emergency contact info to help guests feel at home and minimize issues.

Implement a robust guest screening process: Carefully review potential guest profiles and communication before accepting bookings. Consider requiring a security deposit to protect against damages. Clearly communicate house rules and expectations upfront.

Comply with health and safety regulations: Ensure your property meets all building codes, fire safety requirements, and health standards. Provide functioning smoke and carbon monoxide detectors, fire extinguishers, and first-aid kits. Regularly clean and disinfect the space between guests.

Collect and remit applicable taxes: STRs are subject to 8% PST and 5% GST in BC. You may also need to collect the 2-3% Municipal and Regional District Tax (MRDT). Register to collect these taxes and remit them to the appropriate authorities.

Maintain positive relationships with neighbors: Inform adjacent neighbors of your STR plans and provide contact information in case of any issues. Encourage guests to be respectful of noise levels and parking to minimize community impact.

Stay informed of regulatory changes: The STR landscape in Cowichan Bay is evolving rapidly due to new provincial and regional district rules. Regularly check for updates from the CVRD and province to ensure ongoing compliance. Join local STR host groups or forums to stay connected to the community.

By following these steps and prioritizing compliance and responsible hosting, you can launch a successful short-term rental business in Cowichan Bay while contributing positively to the community. However, be aware that regulations are becoming increasingly restrictive, so it's crucial to have contingency plans and be prepared to adapt as needed.

Who to Contact in Cowichan Bay about Short-Term Rental Regulations and Zoning?

For questions about short-term rental regulations and zoning in Cowichan Bay and the surrounding Cowichan Valley Regional District (CVRD), contact the CVRD's Development Services Division:

1. Email: ds@cvrd.bc.ca
2. Phone: 250-746-2620
3. Address: 175 Ingram Street, Duncan, BC V9L 1N8

The Development Services team can help you determine if your property is zoned to allow short-term rentals and guide you through the process of applying for a zoning amendment if needed.

For general inquiries about the CVRD's building permit and inspection process, contact the Building Inspection Division:

1. Email: inspections@cvrd.bc.ca
2. Phone: 250-746-2610

To report a suspected illegal short-term rental or other bylaw infraction, contact the CVRD's Bylaw Enforcement Division:

1. Phone: 250-746-2620
2. Email: bylawenforcement@cvrd.bc.ca
3. Online Complaint Form: https://www.cvrd.ca/FormCenter/Bylaw-Enforcement-6/Bylaw-Complaint-Form-50

For updates on the CVRD's implementation of new provincial short-term rental legislation, visit their dedicated webpage: https://www.planyourcowichan.ca/new-provincial-housing-short-term-rental-legislation

Some additional resources and communities that may be helpful for short-term rental hosts in Cowichan Bay include:

1. Tourism Cowichan: https://www.tourismcowichan.com/ - Provides information and support for tourism businesses in the Cowichan region.
2. Vancouver Island Short-Term Rental Association: https://www.vistra.ca/ - An association representing short-term rental owners and property managers on Vancouver Island. Offers education, advocacy, and networking opportunities.
3. Airbnb Host Community - Vancouver Island: https://community.withairbnb.com/t5/Vancouver-Island-Hosts/bd-p/en-ca-vancouver-island-hosts - An online forum where Airbnb hosts on Vancouver Island can connect, share experiences and ask questions.

By staying connected with these local government contacts and host communities, short-term rental operators in Cowichan Bay can navigate the evolving regulatory landscape and work to ensure the sustainability of their businesses.

What Do Airbnb Hosts in Cowichan Bay on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions in local Reddit and BiggerPockets forums, short-term rental hosts in Cowichan Bay have mixed feelings about the tightening regulations:

Frustration with New Principal Residence Requirement: In the r/VancouverIsland subreddit, one host expressed disappointment that the Cowichan Valley Regional District opted into BC's new rule restricting STRs to principal residences starting November 2024. They shared, "I bought [a condo] that was being used as a vacation rental, but it looks like it will have to go back to being a long-term rental with these new rules."

Concerns About Enforcement: While the CVRD is increasing enforcement of illegal STRs, some hosts on Reddit feel it's been limited so far. One commenter noted, "The CVRD bylaw enforcement team investigates complaints but has not yet imposed major fines or forced widespread removals." However, they expect this to change as the new provincial and regional rules take effect.

Debates on STR Impact: In threads about the housing crisis, opinions are divided on STRs. Some argue they are a key contributor, with one Redditor stating, "converting Airbnb's back to 'homes' for people is an important way to improve affordable housing." Others defend their STR businesses, with a host on BiggerPockets sharing, "I operate a few small services in the gulf islands and slap an additional 20-30% onto the bill when I know they're b&b's. We're all in this together."

Pushback Against Regulations: Some hosts are fighting the new rules, with one posting on r/legaladvicecanada about "Suing gov of BC for Airbnb rules?" However, most commenters felt a lawsuit would be expensive and unlikely to succeed, with one advising, "There's nothing illegal about the government banning short-term rentals."

Considering Other Options: With the writing on the wall, some STR owners are adapting. On the r/VictoriaBC subreddit, a host shared their "minor win" of moving into a condo they previously used as a vacation rental. "Hopefully people feeling pressure from interest rates will sell more of their vacation rentals," they noted.

Overall, while many STR hosts are frustrated by Cowichan Bay's increasing restrictions, there seems to be a growing recognition that the tide is turning against using homes primarily as vacation rentals. As one Redditor put it, "We're never going to curtail these existing short-term rentals if they're allowed to just exist in perpetuity forever."

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.