Toronto to Place New Rules on Short-Term Rentals: Licensing Fee

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The City of Toronto could soon make it more expensive – and more complicated – for property owners to rent out their spare rooms or homes while on holiday.

A recent report from the city outlines a new bylaw that would regulate short-term rentals, such as those listed on websites like Airbnb and VRBO. This is in response to a lack of affordable housing options in the city and are similar to the recommendations recently made by the City of Vancouver.

This is the first out of three reports regarding short-term rentals that the city intends on releasing, following public consultations, online input, and meetings with stakeholders. The city believes the final recommendations will address the concerns on housing affordability and availability, as well as create “regulations that are fair and easy for people and companies to follow.”

New fees for property renters and businesses

The report suggests homeowners pay an annual $50 fee if they want to rent their property. They would also need to register with the city, and keep a detailed log of those who stay with them.

If the suggestions are approved, a property owner could still rent out their entire primary residence, but only for a maximum of 180 nights. The hope is this would crack down on those who have multiple listings or “ghost hotels”.

The city is also suggesting more regulations on short-term rental businesses. These companies would be required to pay a one-time licence application fee of $5,000 in order to stay in business, and pay the city $1 per night of every booking. Last year alone, the report claims there were almost 1,000,000 nights booked through these businesses, and the money recuperated from this fee would go towards funding the new city program.

Those who break the new bylaw could be fined up to $100,000, or a maximum of $10,000 per day. The homeowner’s short-term rental registration could also be revoked and, once cancelled, he or she would not be able to apply for another licence for up to a year.

New rules not strict enough, say some groups

Some advocacy groups, such as Fairbnb, told the CBC they want the city of Toronto to introduce stricter regulations, similar to those in Vancouver. Under the new rules, Torontonians would still be able to list up to three rooms in their primary residence and/or a secondary suite for rent for as many nights as they wish. However, advocacy groups worry that this greatly reduces the number of available rentals for students and low-income workers.

Meanwhile, as cited by the CBC, Airbnb says it accepts the new regulations, but worries about the limitations put on families who use short-term rentals as an extra source of income, as they’ll only be able to rent out their homes for 180 days out of the year.

The city’s next report is due for release on November 29. That report is expected to cover a potential 10 per cent tax on short-term rentals, similar to hotel taxes. If the council ultimately approves this new bylaw, the regulations would come into effect on June 1, 2018, or the closest available date.

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