Ottawa Short Term Rental Regulation: A Guide For Airbnb Hosts

What are short term rental (Airbnb, VRBO) regulations in Ottawa,Canada?

Permit Requirements:

• Short-term rental hosts must obtain a permit from the City of Ottawa to list their property on platforms like Airbnb and VRBO. The permit costs $110 and is valid for 2 years.123591116
• To apply for a permit, hosts must submit an application form, floor plans, proof of ownership/lease, proof it is their primary residence, and sign a declaration agreeing to comply with the Short-Term Rental By-law.12914
• Permits are non-transferable. New owners must apply for their own permit if purchasing a property previously used as a short-term rental.11

Eligibility:

• Hosts can only offer short-term rentals in their primary residence (where they ordinarily live). This applies to homeowners and renters in urban areas and rural villages.12349111416
• Renters must obtain written permission from their landlord to host short-term rentals.12491114
• Condo owners can list their unit as a short-term rental unless prohibited by the condo corporation's rules.123914
• Rural homeowners and cottage owners outside of villages can get a separate $110 "cottage rental" permit to list a secondary property like a vacation home or coach house.1239111416

Listing Requirements:

• Listings can only be posted on short-term rental platforms registered with the City of Ottawa.1416
• All listings must prominently include the City-issued host permit number and the maximum number of allowed overnight guests as per the permit.1251416
• Hosts must provide guests with their contact information, details on the city's noise/parking/smoking regulations, waste disposal instructions, and emergency contact info.1714

Occupancy Limits:

• A maximum of 2 guests per bedroom are permitted per night, up to a maximum of 10 guests total.171016
• In a regular house or condo, the maximum is 8 guests (4 bedrooms x 2 guests each).110
• In a large house with 8 bedrooms, up to 10 guests are allowed.1016

Safety Requirements:

• Short-term rentals must meet building code and fire code requirements. This includes having interconnected smoke alarms, carbon monoxide detectors, and fire extinguishers.1714

Insurance:

• Hosts must have liability insurance coverage of at least $1 million that specifically allows for short-term rental commercial activity.17914

Taxes:

• Short-term rental hosts must collect the 4% Municipal Accommodation Tax (MAT) from guests and remit it to the City monthly or quarterly.16914

Fines & Penalties:

• Hosts or property managers found to be violating the Short-Term Rental By-law can face fines ranging from $500 to $100,000.125716
• The city has a team of 6 bylaw enforcement officers dedicated to monitoring short-term rental activity and cracking down on non-compliant hosts.4

Prohibitions:

• Landlords, condo corporations, and housing co-ops can apply to the City to prohibit short-term rentals in their buildings. If prohibited, no host permits will be issued or renewed for that property.12491416

The regulations aim to balance the benefits of short-term rentals with the need to protect long-term housing supply and limit impacts on residential neighborhoods. Hosts must carefully follow all rules and operate transparently to avoid penalties and maintain a license to operate legally in Ottawa.

Starting a Short Term Rental Business in Ottawa

Ottawa, the capital city of Canada, is a popular tourist destination attracting millions of visitors each year for its rich history, cultural attractions, and scenic beauty. Starting a short-term rental business, such as through platforms like Airbnb or VRBO, can be a profitable venture in Ottawa. The city's strong tourism industry and high demand for accommodations make it an attractive market for short-term rental hosts. However, it's crucial to understand and comply with the city's regulations governing short-term rentals to operate legally and avoid potential fines or penalties.

Ottawa's short-term rental market has grown significantly in recent years, with over 3,000 active listings on Airbnb alone as of 2019. The city's popular tourist attractions, such as Parliament Hill, the Rideau Canal, and the ByWard Market, drive demand for short-term rentals throughout the year. Additionally, Ottawa's status as the national capital means that it hosts many government and business travelers who may prefer the amenities and flexibility of short-term rentals over traditional hotels.

However, the growth of short-term rentals in Ottawa has not been without controversy. Some residents and housing advocates have raised concerns about the impact of short-term rentals on housing affordability and neighborhood character, arguing that they can reduce the supply of long-term rental housing and contribute to noise and safety issues. In response to these concerns, the City of Ottawa has implemented a regulatory framework for short-term rentals that aims to balance the benefits of home-sharing with the need to protect public interests.

Short Term Rental Licensing Requirement in Ottawa

As of April 1, 2021, the City of Ottawa requires all short-term rental hosts to obtain a permit to legally operate their business. The permit requirement applies to any rental of a residential property or part of a property for a period of less than 30 consecutive days. This includes rentals through online platforms like Airbnb and VRBO, as well as those arranged directly between hosts and guests.

The short-term rental permit costs $110 for a two-year period and must be renewed before expiration. Hosts must apply for the permit online through the city's website or in-person at the Business Licensing Centre located at 735 Industrial Avenue. The permit application requires hosts to provide various documents and information, which are detailed in the next section.

In addition to the standard short-term rental permit, hosts who wish to rent out a cottage or home in rural areas of Ottawa must obtain a separate $110 permit. This is because rural properties are subject to different zoning requirements and may have unique safety and environmental considerations.

Failure to obtain a short-term rental permit can result in significant penalties, including fines of up to $100,000 per day of non-compliance. The city has the authority to issue fines and revoke permits for hosts who violate the short-term rental by-law or operate without a valid permit.

The licensing requirement is a key component of Ottawa's short-term rental regulations, as it allows the city to track and monitor the industry, ensure compliance with safety and zoning standards, and collect data on the impact of short-term rentals on the housing market and local communities. The permit fees also help to offset the costs of administering and enforcing the regulations.

Required Documents for Ottawa Short Term Rentals

To apply for a short-term rental permit in Ottawa, hosts must provide the following documents:

Proof of principal residence: Hosts must demonstrate that the short-term rental property is their primary residence by providing a valid Ontario driver's license or identification card showing the address of the property. This requirement is designed to prevent investors from buying up properties solely for short-term rental use and to ensure that hosts have a stake in the well-being of the neighborhood.

Written consent from the property owner: If the host is a renter rather than the owner of the property, they must provide written consent from the owner confirming that short-term rentals are allowed. This ensures that landlords are aware of and approve of their tenants' short-term rental activities.

Floor plan of the property: Hosts must submit a floor plan showing the layout and dimensions of the short-term rental unit, including the number and location of bedrooms. This information is used to verify compliance with occupancy limits and fire safety requirements.

Proof of insurance: Hosts must provide evidence of liability insurance coverage for their short-term rental property. This can be through a platform-provided policy, such as Airbnb's Host Liability Insurance which provides up to $1 million in coverage, or a separate short-term rental insurance policy purchased by the host.

Signed declaration: Hosts must sign a declaration confirming that they will comply with all provisions of the short-term rental by-law, including occupancy limits, parking requirements, and safety standards. The declaration also requires hosts to acknowledge their responsibility to collect and remit all applicable taxes.

These document requirements are designed to ensure that short-term rental hosts are operating transparently and responsibly, with the necessary permissions and safeguards in place. The city may request additional information or documentation as part of the permit application process, and has the authority to deny or revoke permits for hosts who provide false or incomplete information.

Ottawa Short Term Rental Taxes

Short-term rental hosts in Ottawa are required to collect and remit two types of taxes: the Municipal Accommodation Tax (MAT) and the Goods and Services Tax/Harmonized Sales Tax (GST/HST).

The MAT is a 4% tax on the rental price of all short-term accommodations in Ottawa, including those booked through online platforms like Airbnb and VRBO. The tax applies to rentals of less than 30 consecutive days and is collected by the host at the time of booking. Hosts must file quarterly MAT returns and remit the collected taxes to the city, even if the property was not rented during that period.

Failure to collect and remit the MAT can result in fines, penalties, and legal action by the city. The MAT revenue is used to fund tourism promotion and development initiatives in Ottawa, as well as to offset the costs of regulating and supporting the short-term rental industry.

In addition to the MAT, hosts may also be required to register for and collect the GST/HST, which is a federal tax on goods and services. The GST/HST applies to short-term rentals if the host meets certain criteria, such as earning more than $30,000 per year from their rental activities or operating multiple properties.Hosts who are required to collect the GST/HST must register for a business number with the Canada Revenue Agency and file regular tax returns. The current GST/HST rate in Ontario is 13%, which includes a 5% federal portion and an 8% provincial portion.

Compliance with tax obligations is a critical responsibility for short-term rental hosts in Ottawa. Hosts should carefully review the MAT and GST/HST requirements and seek guidance from a tax professional if needed. Platforms like Airbnb and VRBO may offer some assistance with tax collection and remittance, but ultimately it is the host's responsibility to ensure full compliance with all applicable tax laws.

Ottawa-wide Short Term Rental Rules

In addition to the licensing and tax requirements, Ottawa's Short-Term Rental By-law sets out several operational rules and restrictions for hosts. These rules are designed to minimize the negative impacts of short-term rentals on neighborhoods and to ensure the safety and well-being of guests.

Principal residence requirement: Short-term rentals are only permitted in the host's principal residence, meaning the property where the host lives for at least 50% of the year. This rule is intended to prevent investors from buying up properties solely for short-term rental use and to ensure that hosts have a stake in the well-being of the neighborhood.

Occupancy limits: Hosts can rent out up to 3 bedrooms in their principal residence, with a maximum of 2 guests per bedroom. This means that the total number of guests per property is capped at 6, regardless of the size of the property. The occupancy limits are designed to prevent overcrowding and to ensure that short-term rentals do not place undue strain on neighborhood infrastructure and services.

Entire home rental cap: Hosts who wish to rent out their entire principal residence (i.e., not just individual bedrooms) are limited to a maximum of 180 nights per year. This rule is intended to prevent properties from being used exclusively for short-term rentals and to ensure that they remain available for long-term housing.

Guest information and amenities: Hosts must provide guests with certain information and amenities, including emergency contact information, instructions for waste disposal and parking, and rules regarding smoking and vaping. Hosts must also ensure that their properties meet all applicable safety standards, such as having working smoke and carbon monoxide detectors and fire extinguishers.

Condominium and co-operative restrictions: Hosts who live in condominiums or housing co-operatives may be subject to additional restrictions on short-term rentals, even if they meet all of the city's requirements. Many condo boards and co-ops have bylaws that prohibit or limit short-term rentals, citing concerns about security, noise, and wear and tear on common areas. Hosts should carefully review their building's rules before applying for a short-term rental permit.

These operational rules and restrictions are enforced through a combination of proactive inspections, complaint-based investigations, and data analysis by city staff. Hosts who violate the rules can face fines, permit revocation, and other penalties.

The rules strike a balance between the rights of hosts to use their properties for short-term rentals and the need to protect the quality of life in Ottawa's neighborhoods. By limiting the scale and intensity of short-term rental activity, the rules aim to prevent the negative impacts seen in some other cities, such as housing shortages, noise and safety issues, and the proliferation of "ghost hotels" owned by investors.

Does Ottawa strictly enforce STR rules?

Ottawa's approach to enforcing its short-term rental regulations can be described as moderate compared to some other cities, but still proactive and comprehensive. The city has dedicated resources to monitoring compliance and investigating complaints, but also recognizes the value of short-term rentals to the local economy and aims to strike a balance between regulation and support for the industry.

One of the key enforcement mechanisms is the requirement for hosts to obtain a permit and display their permit number on all online listings. This allows city staff to easily identify and track properties that are being used for short-term rentals, and to ensure that they are operating in compliance with the by-law.

The city also operates a 24/7 hotline for neighbors to report issues related to short-term rentals, such as noise, parking violations, or suspected illegal activity. Complaints are investigated by bylaw enforcement officers, who have the authority to issue fines, revoke permits, and take other enforcement actions as needed.

In addition to complaint-based investigations, the city conducts proactive inspections of short-term rental properties to ensure compliance with safety standards and occupancy limits. These inspections may be triggered by data analysis that identifies properties with a high number of bookings or other risk factors, or by random selection.

However, some hosts on online forums like Reddit and Bigger Pockets have reported operating without permits or facing minimal enforcement, suggesting that the city's approach may be somewhat inconsistent or complaint-driven. This may be due to resource constraints or the challenges of monitoring a rapidly growing and evolving industry.

Overall, Ottawa's enforcement approach seems to be aimed at encouraging compliance and responsible hosting, rather than cracking down on all violations. The city provides education and outreach to hosts to help them understand and comply with the rules, and offers a grace period for hosts to obtain permits and make necessary changes to their properties.

At the same time, the city has shown a willingness to take strong enforcement action against hosts who flagrantly violate the rules or pose a threat to public safety. In 2019, for example, the city revoked the permit of a host who was found to be operating a "party house" that generated numerous complaints from neighbors.

Compared to some other Canadian cities, such as Vancouver and Toronto, Ottawa's short-term rental regulations are generally seen as more permissive and host-friendly. While those cities have implemented strict limits on the types of properties that can be used for short-term rentals and the number of nights they can be rented, Ottawa has taken a more flexible approach that allows for a wider range of hosting arrangements.

This has made Ottawa a relatively attractive market for short-term rental hosts, even as the industry has faced increasing regulation and scrutiny in other jurisdictions. However, it has also led to some concerns about the city's ability to effectively enforce its rules and prevent the negative impacts of short-term rentals on housing affordability and neighborhood livability.

How to Start a Short Term Rental Business in Ottawa

Determine if your property is eligible for short-term rentals under Ottawa's regulations, including zoning requirements and the principal residence rule.

Obtain written consent from your landlord or condominium board, if applicable, confirming that short-term rentals are allowed in your unit.

Apply for a short-term rental permit with the City of Ottawa, either online or in-person at the Business Licensing Centre. Provide all required documents and pay the $110 fee.

Register for and collect the Municipal Accommodation Tax (MAT) and GST/HST, if required based on your rental income and business status.

Create a listing on platforms like Airbnb or VRBO, including your permit number and all required information about the property, such as the number of bedrooms and parking availability.

Prepare your property for guests, ensuring compliance with safety and cleanliness standards. This may include installing smoke and carbon monoxide detectors, providing fire extinguishers, and creating a guest manual with emergency contact information and house rules.

Manage bookings, guest communication, and property maintenance. Respond promptly to guest inquiries, provide check-in instructions, and arrange for cleaning and repairs as needed.

Who to contact in Ottawa about Short Term Rental Regulations and Zoning?

For questions or concerns regarding short-term rental regulations and zoning in Ottawa, contact:

• City of Ottawa's Short-Term Rental Information Line: 613-580-2424 ext. 12735. This line is staffed Monday to Friday from 8:00 am to 5:00 pm and can provide information on permit requirements, zoning, and enforcement.
• Email: str_lcd@ottawa.ca. This email address is monitored by the city's Business Licensing department and can be used for general inquiries or to report suspected violations of the short-term rental by-law.

What do Airbnb hosts in Ottawa on Reddit and Bigger Pockets think about local regulations?

• A Reddit user reports difficulty obtaining a short-term rental permit in Ottawa, citing slow response times from the city and confusion over the required documents. They suggest starting the application process well in advance of the planned rental start date.
• Another Reddit user shares their experience successfully obtaining a permit after providing all required documents, including proof of insurance. They recommend carefully reading the by-law and application instructions to avoid delays.
• Bigger Pockets forum members discuss the challenges of operating short-term rentals in Ottawa, particularly in condominiums with restrictive bylaws. Some hosts have had to cancel reservations or sell their properties due to condo board rules prohibiting short-term rentals.
• Some hosts on Reddit express frustration with the city's enforcement of short-term rental regulations, arguing that the rules are too restrictive and favor large hotel chains over individual hosts. Others appreciate the balance struck between regulation and allowing the industry to operate, noting that Ottawa's rules are more lenient than those in some other Canadian cities.

In summary, Ottawa has implemented a regulatory framework for short-term rentals that aims to enable home-sharing while mitigating potential negative impacts on housing affordability, neighborhood character, and public safety. Hosts must obtain permits, pay taxes, and follow operational rules such as occupancy limits and the principal residence requirement.

While enforcement appears moderate compared to some cities, Ottawa dedicates resources to monitoring compliance and investigating complaints. Prospective hosts should carefully review the requirements and restrictions before starting an Airbnb business in Ottawa, and be prepared to navigate the permit application process and engage with city staff and community stakeholders.

Overall, Ottawa's short-term rental regulations strike a balance between the interests of hosts, guests, and residents, reflecting the city's goal of promoting responsible home-sharing while preserving the quality of life in its neighborhoods.