Sun Peaks Short Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short Term Rental Business in Sun Peaks

Sun Peaks is a world-class ski resort municipality located in the interior of British Columbia, Canada. The picturesque mountain village attracts thousands of visitors each year for skiing, snowboarding, hiking, mountain biking and golf. Many of these tourists choose to stay in short-term vacation rentals listed on platforms like Airbnb and VRBO.

Renting out a property short-term can be a very profitable venture for homeowners in Sun Peaks. With strong year-round demand and high nightly rates, short-term rentals (STRs) often generate significantly more income compared to long-term tenancies.

A recent analysis found that the average Sun Peaks vacation rental earns between $29,000 to $59,000 per year depending on the size of the unit3. Studios and one-bedrooms average around $30,000 annually, while larger three-bedroom properties can bring in nearly $60,000.

However, the rapid growth of the STR market in recent years has also led to some challenges in the community. Concerns about noise, parking, housing availability and the character of residential neighborhoods have prompted Sun Peaks to introduce new regulations for short-term rentals.

As of 2023, anyone operating a short-term rental in Sun Peaks must obtain a business license from the municipality and meet certain criteria around parking, occupancy limits and garbage disposal5. There are also restrictions on which properties can be used as STRs based on zoning.

Short Term Rental Licensing Requirements in Sun Peaks

Short-term rental operators in Sun Peaks are required to have a valid business license issued by the Sun Peaks Mountain Resort Municipality (SPMRM). The licensing process involves submitting an application along with supporting documents and a $1000 refundable "good behavior bond"3.

To qualify for a license, STR properties must either be:

• Zoned for tourist accommodation use (R1-A or RS-1A zones)
• Zoned as commercial condo hotel (CC1) without a full-time front desk
• Granted a Temporary Use Permit (TUP) in a residential zone

Properties with a TUP are also required to have a long-term tenant living on-site to help address any guest issues that arise, although the tenant does not have to be the official property manager on record with the SPMRM1.

The municipality charges a $1500 fee for a 3-year TUP3. No new TUPs are being issued in established residential neighborhoods, only renewed for existing permit holders meeting the new conditions.In addition to zoning, STR license applications are evaluated based on:

• Proximity to the village core
• Ski-in/ski-out access
• On-site management
• Support of immediate neighbors

As of October 2022, there were 45 licensed STRs operating in residential areas of Sun Peaks - 35 on tourist accommodation zoned properties and 10 with TUPs1. However, an additional 11 properties were found to be operating without a proper license.

To increase enforcement, the SPMRM is investing in new monitoring software that will scan online listings to identify illegal or non-compliant STRs5. Violators may face fines of $500 per day for exceeding occupancy limits and other infractions.

Occupancy Limits for Sun Peaks Short Term Rentals

In June 2023, the SPMRM approved changes to the occupancy limits for licensed STRs in the community5. The new rules vary the maximum number of allowed guests by property type:

• Single-family homes with an auxiliary suite: up to 16 guests total
• Condos and townhomes: 2 people plus 2 per bedroom
• Studio apartments: 3 people total
• Auxiliary suites: 3 people per bedroom

The municipality increased the limits to help accommodate multi-generational family groups that want to vacation together in Sun Peaks5. However, some residents worry the higher caps could lead to more "party houses" and disruption in their neighborhoods.

To manage potential impacts, the SPMRM also introduced a 5 vehicle limit for STR parking and a requirement for operators to have a garbage disposal plan, since the local transfer station has limited hours5.

Zoning Restrictions for Sun Peaks Short Term Rentals

Under Sun Peaks' current zoning rules, nightly rentals are only permitted in the following areas3:

• Properties zoned Tourist Accommodation (R1-A)
• Properties zoned Residential/Tourist Accommodation (RS-1A)
• Properties zoned Commercial Condo Hotel (CC1) without a full-time front desk
• Residential properties with a valid Temporary Use Permit (TUP)

The tourist accommodation zones are mostly concentrated in the village core and surrounding ski-in/ski-out developments like Settlers Crossing, Stone's Throw, and Trails Edge3. Nightly rentals are not allowed in regular residential subdivisions unless the owner has a TUP.

The SPMRM has placed a 20-25% cap on the number of TUPs allowed on each residential street to limit STR proliferation1. Some high-demand areas like Burfield Drive have a complete moratorium on new vacation rental permits to preserve long-term housing for resort employees.

Moving forward, the municipality plans to zone new developments closer to the village core for tourist accommodation while keeping subdivisions further out as residential only1. This will allow the STR market to grow in a more managed way as the community expands.

Once several new tourist-zoned developments are completed, the SPMRM will stop issuing TUPs for STRs in existing residential neighborhoods altogether1. Owners with permits will likely be grandfathered but no new vacation rental licenses will be granted outside of the designated tourist areas.

Tax Implications for Sun Peaks Short Term Rentals

Short-term rentals in Sun Peaks are subject to several taxes that hosts need to collect and remit to the provincial and federal governments. These include:

• 8% Provincial Sales Tax (PST) on nightly rates
• Up to 3% Municipal and Regional District Tax (MRDT) on stays under 27 nights
• 5% Goods and Services Tax (GST) on stays under 27 nights for hosts earning over $30,000 annually

As of 2022, STR hosts may also be subject to the new federal Underused Housing Tax (UHT) if their property is not rented long-term for at least 6 months per year2. The UHT is an annual 1% tax on the assessed value of "vacant or underused" residential properties owned by non-Canadians or Canadian corporations and trusts.

While the UHT is intended to target foreign-owned homes in major urban centers left empty or used only occasionally, it may unintentionally impact vacation properties in small resort communities like Sun Peaks.

The municipality is seeking an exemption for Sun Peaks STR owners from the UHT, arguing the tax unfairly penalizes foreign owners who play a vital role in supporting the local tourism economy2. But currently, the tax applies for the 2022 year and must be paid by April 30, 2023.

Another federal policy affecting Sun Peaks is the two-year ban on non-Canadians buying residential properties, which took effect January 1, 20232. Sun Peaks is one of only three BC ski resorts where foreign buyers are prohibited from purchasing homes, along with Silver Star and Apex.

The municipality believes Sun Peaks' inclusion in the foreign buyer ban is an oversight, since recreational properties are supposed to be exempt2. They are lobbying the federal government to remove Sun Peaks from the list of affected communities.

Pros and Cons of Operating a Short Term Rental in Sun Peaks

Owning a vacation rental property in a world-class ski resort like Sun Peaks comes with both benefits and challenges. On the plus side:

• Strong year-round demand from tourists for nightly accommodations
• Significantly higher income potential compared to long-term tenancies
• Personal use of the property for family ski trips and summer getaways
• Relatively STR-friendly regulations compared to some other BC resort towns

However, there are also some drawbacks to consider:

• High upfront costs to purchase a suitable property in a prime location
• Ongoing expenses for maintenance, repairs, utilities and supplies
• Time commitment of managing bookings, turnovers and guest communications
• Potential for disruptive guests causing issues with neighbors
• Changing municipal and provincial regulations adding red tape and costs
• Taxation of STR income and possible exposure to new vacant home taxes

For most Sun Peaks STR owners, the revenue potential outweighs the hassles, especially if they hire a professional property manager to handle the day-to-day operations. But it's important to understand the full picture before jumping into the vacation rental business.

How to Launch a Short Term Rental in Sun Peaks

If you own a property in Sun Peaks that is eligible for nightly rentals, here are the key steps to get started:

• Confirm your property's zoning allows for legal STR use
• Complete any necessary upgrades for guest safety and comfort
• Obtain a business license from the SPMRM, including a TUP if required
• Find a reputable local property management company to work with
• Create an enticing listing with professional photos and descriptions
• Develop a dynamic pricing strategy to maximize bookings and revenue
• Implement guest screening and house rules to prevent disruptive stays
• Set up cleaning, maintenance and supply restocking between turnovers
• Register to collect and remit PST, MRDT and GST as needed

Many STR owners choose to partner with an experienced vacation rental management company to guide them through the startup process and handle the ongoing operations. Reputable managers can help with everything from licensing to listing optimization to guest support.

Look for a company that offers:

• In-depth knowledge of local regulations and best practices
• Dynamic pricing tools to adjust rates based on demand
• Professional photography and copywriting for your listing
• Full-service cleaning and maintenance between bookings
• 24/7 guest communication and issue resolution
• Detailed financial reporting and tax remittance

Expect to pay between 25-35% of your rental revenue in management fees3. But for most owners, the time savings and peace of mind are well worth the cost.

Who to Contact About STR Rules in Sun Peaks

For questions about zoning, business licenses, bylaws and enforcement related to operating a short-term rental in Sun Peaks, contact:

Sun Peaks Mountain Resort Municipality
106 - 3270 Village Way, Sun Peaks, BC V0E 5N0
Phone: 250-578-2020
Email: info@sunpeaksmunicipality.ca

What Hosts Are Saying About STR Rules

Sun Peaks' evolving STR regulations have generated some spirited discussions on forums like Reddit and BiggerPockets. Here's a sample of what hosts are saying:

• "Sun Peaks is way more reasonable than Whistler or Banff which have completely banned STRs in residential areas. At least here we can still get a license and rent legally, even if it costs more now." (Reddit)
• "The new fees seem like a cash grab. My place has never had a single bylaw complaint but I'm paying triple what I used to for a license. How is that fair?" (Reddit)
• "I get that full-time residents don't want to live next to a 'party house' but STRs are critical to the local economy. The municipality needs to find a balance that works for everyone." (BiggerPockets)
• "It's frustrating that we can't get clear answers on which properties will be grandfathered past 2024. I bought a condo last year planning to STR it and now I'm worried I won't be able to." (BiggerPockets)

The one thing most hosts seem to agree on is that Sun Peaks remains a very desirable location to own a vacation rental property. Despite some new red tape and costs, the fundamentals of strong demand and limited supply bode well for the STR market in the years ahead.