Updated October 3, 2026 · DF Property Management
What counts as a short-term rental
In Toronto, a short-term rental is all or part of a dwelling unit rented for less than 28 consecutive days in exchange for payment. Platforms like Airbnb and Vrbo are the usual channel. The rules are in Municipal Code Chapter 547, together with zoning by-law amendments upheld in 2019.
Rentals of 28 days or more are not short-term rentals under the by-law. They are usually tenancies under the Residential Tenancies Act, furnished or not.
The core rule: principal residence only
You can only host a short-term rental in your principal residence — the place you live and use for bills, ID, taxes and insurance. Each person has one. In practice:
- You cannot run a short-term rental in an investment condo you don't live in.
- You can rent out your own home while you travel, within the night cap.
- A basement suite, laneway suite or garden suite can be a short-term rental only if it is the host's principal residence.
- Tenants can register in their own principal residence. The City doesn't require the landlord's consent, though it recommends getting it — and the lease may restrict subletting.
Registration, caps and records
| Requirement | Detail |
|---|---|
| Registration | $390, valid for one year; fee increases annually |
| Registration number | Must appear in every listing |
| Entire home | Maximum 180 nights per calendar year |
| Rooms only | Up to three bedrooms, no annual night cap |
| Records | Nights rented, prices charged and rental type, kept for three years |
| Proof of residence | Government ID plus at least two supporting documents |
Operators register either as entire-unit or partial-unit hosts for the term of their registration. You must be 18 or older and provide an emergency contact.
The Municipal Accommodation Tax
Short-term rentals in Toronto are subject to the Municipal Accommodation Tax (MAT). The rate was temporarily raised to 8.5% from June 1, 2025 to July 31, 2026, and returned to 6% from August 1, 2026. Registered operators must file a MAT report every quarter, within 30 days of the quarter's end — even if the platform collected the tax, and even if nothing was collected. HST may also apply depending on the operator's revenue.
Fines
- Operating without registration: $1,000
- Advertising without a registration number: $1,000
- Renting an entire home for more than 180 nights: $700
- On conviction in court: up to $100,000, or up to $10,000 a day
The federal tax rule
Since January 1, 2024, the Income Tax Act denies deductions for expenses incurred to earn short-term rental income from a property that doesn't comply with provincial or municipal short-term rental rules. In Toronto, an unregistered or non-principal-residence short-term rental could mean paying tax on gross revenue — no deductions for interest, condo fees or cleaning.
Condo rules
Even a compliant host can be stopped by the condominium. Many Toronto condo declarations and rules restrict short-term occupancy — through single-family residential use clauses, minimum lease terms, or bans on hotel-style use. Condo corporations can enforce these through the Condominium Act, 1998, and through the courts. Before relying on short-term income in CityPlace or the Entertainment District, read the declaration, by-laws and rules, and ask management for any enforcement history.
Insurance is the other gap. A standard homeowner or condo unit-owner policy may not cover paying guests, and a claim arising from an undisclosed short-term rental can be denied. Tell your insurer what you are doing, in writing, before the first booking.
Short-term vs long-term: the real comparison
| Short-term (legal, own home) | Long-term lease | |
|---|---|---|
| Who can do it | Hosts in their principal residence | Any owner |
| Nights | 180 a year for an entire home | No limit |
| Taxes and fees | Registration, MAT, quarterly reporting | No MAT; normal rental income tax |
| Work | Turnovers, cleaning, guest messaging, reviews | One tenant, periodic inspections |
| Legal framework | Chapter 547, condo rules | Residential Tenancies Act, LTB |
| Vacant Home Tax | Nightly stays don't count as occupancy | Leases of 30+ days count |
For an investment property you don't live in, the long-term lease isn't just the safer option. It's the only lawful one.
Mid-term furnished rentals
Rentals of a month or more to visiting professionals, students or families between homes fall outside the short-term rules. They are usually tenancies under the RTA, with all that implies: the tenant may be entitled to stay past the "end date", and you need the LTB to end the tenancy. Write the lease with that in mind and screen the tenant as carefully as you would for a year-long lease.
If your tenant is listing your unit
It happens: a landlord finds their rental unit on a short-term platform with a host they've never met. A tenant can only register a unit that is their own principal residence, so a tenant who has moved out and is renting nightly is breaking the by-law. They may also be breaching the lease and the condo rules, and exposing you to insurance problems. Your options depend on the facts and the lease — unauthorized subletting, interference with other residents and condo fines can all be relevant at the Landlord and Tenant Board. Document the listings with dated screenshots, check the City's registration status, notify the condo corporation if applicable, and get advice before serving any notice. Clear lease terms on subletting and occupancy, plus periodic inspections, prevent most of these cases.
Converting from short-term to long-term
- Close out the old listing — cancel future bookings, file the last MAT report, and keep three years of records.
- Prepare the unit — decide what furniture stays, deep-clean, and fix the wear that guests leave.
- Price it properly — long-term rents in condo-heavy areas track building, view, parking and locker more than nightly comparables.
- Screen and sign — credit, income, references, the Ontario Standard Lease and clear additional terms.
- Keep the paperwork — the lease is also your Vacant Home Tax evidence.
How we help
We don't run short-term rentals. We help owners move investment units onto compliant long-term leases through tenant placement and condo rental management, with the condo corporation, the LTB paperwork and the tax records handled.
General information, not legal advice. Short-term rental, tax and condominium rules change; confirm current requirements with the City of Toronto, the CRA and your condominium corporation.