Across Canada in 2025, short-term rental (STR) regulations have become stricter, more detailed, and harder to ignore. Provinces like British Columbia and cities including Toronto, Montreal, Vancouver, and Kelowna have introduced or reinforced licensing systems, registration requirements, principal residence rules, and platform-level enforcement. These rules directly impact how investor clients can use and profit from residential properties. If you’re advising investor clients, it is critical to be aware of the regulations.

British Columbia: Province-Wide Rules Introduced in 2025

B.C.’s new provincial framework came into effect on May 1, 2025. All hosts in communities with more than 10,000 people must register with the provincial STR Registry. This registration requirement applies to any property used for short-term rental, including secondary suites and laneway houses.

The province also enforces a principal residence requirement in these communities, meaning an STR can only be operated from a host’s primary home and, in some cases, a single secondary suite on the same property. Hosts who failed to register had their listings removed starting June 2, 2025, and all noncompliant future bookings were cancelled by June 23. B.C. also introduced a dedicated Compliance and Enforcement Unit, which works with local governments to issue daily fines and seek injunctions where needed. Platforms that fail to delist unregistered properties can be fined up to $10,000 per day.

Montreal: Seasonal Rental Window Introduced in 2025

Montreal added a major restriction in 2025 that significantly impacts short-term rental activity. Hosts can now only operate between June 10 and September 10 each year. Even properties that meet the province’s existing principal residence rule are prohibited from STR use outside that window. This means that STRs in Montreal are now legally limited to just three months per year. Quebec’s broader regime still applies: all hosts must have a government-issued certificate, which must be visible in the listing. Fines for noncompliance are steep, with maximum penalties of $50,000 for hosts and $100,000 for platforms that allow unregistered listings to remain online. The city and province both take an active role in enforcement.

Toronto: 180-Night Cap and Principal Residence Rule

In Toronto, the city requires that all short-term rentals be located in a host’s principal residence. If a host rents out their entire home, they are capped at 180 nights per year. Renting individual rooms does not carry a nightly limit, but the principal residence restriction still applies. All STR operators must obtain and display a valid City of Toronto license in any listing. Failing to comply with these rules can lead to delisting by platforms and enforcement from the city’s municipal licensing team. Platforms like Airbnb and Expedia are required to enforce these rules on the city’s behalf.

Vancouver: Multi-Layered Requirements with Platform Enforcement

Vancouver operates under both city and provincial regulations. At the city level, all STRs must be located in a host’s principal residence and must be registered with a valid business license. As of 2025, that license number must also be paired with the province’s new STR registration number. Most strata buildings in Vancouver also prohibit STRs, meaning hosts need explicit strata permission before operating. Failing to comply with any one of these layers (city, province, or strata) can result in listings being removed. The city continues to issue fines and conduct enforcement through its bylaw officers. Listings without a valid license have been increasingly flagged and removed by platforms.

Calgary: Tiered Licensing and Vacancy-Triggered Limits

On April 1, 2025, Calgary implemented a new set of short-term rental rules under its updated Business Licence Bylaw. The city now differentiates between primary and non-primary residence rentals, with higher licensing fees and stricter oversight for non-primary listings. If Calgary’s rental vacancy rate falls below 2.5%, a moratorium on new non-primary STR licenses will automatically take effect. Unlike previous rules, condo board approval is no longer required to operate, but STR use is explicitly prohibited in designated affordable housing units.

Waterloo: Restriction of STRs to Principal Residences Only

Effective January 21, 2025, Waterloo updated its rental licensing bylaw to restrict short-term rentals to a host’s principal residence. This change applies to low-rise residential zones and prohibits the use of investment or secondary properties for STR purposes. Operators must obtain a residential rental license, and enforcement of the new rules began on April 30. Fines for noncompliance start at $400 for a first offence and rise to $800 for repeat violations, with the city actively monitoring platforms for unlicensed listings.

Kelowna: Local Rules Reinforced by New Provincial System

Kelowna requires all STRs to be operated from a principal residence, which includes secondary suites or carriage homes located on the same property. Hosts must live in the home at least 240 days per year. A local business license is required, and as of May 2025, a provincial registration number must also be obtained and displayed. Kelowna has confirmed that the city will enforce both its own licensing rules and the provincial registry requirements, including sharing enforcement data with the province and working with booking platforms to ensure compliance. The maximum stay per guest is capped at 90 days, and operators must meet safety and zoning standards in order to qualify.

Canmore: Tightened Zoning and Licensing to Limit STR Expansion

Canmore introduced stricter short-term rental rules in April 2025 in response to worsening housing pressures and resident concerns. The town now requires that all STRs be located within designated tourist zoning areas and prohibits new STR licenses in most residential zones. Existing operators outside these zones may continue only if they held valid licenses before the new rules took effect. Canmore has also increased fines for noncompliance and expanded its enforcement staff, with a focus on preserving long-term housing stock and curbing investor-driven STR growth in residential neighbourhoods.

Other Key Municipalities

Several other Canadian municipalities have also moved to significantly restrict short-term rentals in 2024 and 2025.

In Ottawa, new rules came into effect in April 2024 that limit STRs to a host’s principal residence and require registration with the city. Secondary properties can no longer be used for STRs, and platforms must remove noncompliant listings or face fines.

Banff, which faces intense tourism pressure and a limited housing supply, introduced some of the country’s most aggressive reforms in 2024. As of November that year, all new short-term rental licenses were frozen, and only existing operators with principal residence status and valid town permits were allowed to continue. Banff is actively phasing out commercial conversions of residential units into STRs.

Tofino implemented an updated business licensing bylaw in January 2025 that caps the number of active short-term rentals in the town and limits STR use to owner-occupied principal residences. The town has also reduced the total number of allowable licenses and expanded enforcement resources to target unlicensed or noncompliant operators.

The Federal Layer: CRA Denies Deductions for Illegal STRs

In January 2025, the Canada Revenue Agency implemented a tax rule that disallows deductions for expenses related to illegal or noncompliant STR activity. If a host operates without a license, beyond legal limits, or during restricted timeframes, they cannot claim any expenses tied to that activity, such as mortgage interest, insurance, utilities, or cleaning. This applies even if part of the property is compliant and part is not. Investors who ignore municipal or provincial rules risk not only fines and delisting, but also being denied tax deductions and CRA audits.

Why Real Estate Professionals Need to Stay Updated, and What They Can Do

The complexity of STR regulation in Canada is growing, and these changes affect the potential profitability and desirability of properties. Provincial rules now interact directly with municipal systems, and platforms are being forced to enforce registration and license requirements. As a result, any professional advising a buyer on STR potential must be fully up to date with the law in that jurisdiction. It is not enough to say a unit has been rented on Airbnb before. You need to know whether it qualifies under current zoning, whether it is eligible for a license, whether it meets residency requirements, and whether that income will stand up under CRA scrutiny.

Preparing investor clients means verifying eligibility, calculating returns based on legal limits, collecting and organizing all license documentation, and updating listing language to clearly reflect compliance. STR is still a viable model in parts of Canada, but rentals need to be compliant.

Keeping up with constant regulatory changes can be challenging, but joining a professional community like the Broker’s Playbook free community makes it easier. It offers a space to exchange insights with peers facing similar issues, while also providing access to shared knowledge and updates that help members stay informed and ahead of the curve.