Are you thinking of exploring the Airbnb market in Canada? You are at the right place. It’s a short-term rental market that can be a rewarding opportunity. But only if you do it in the right way. With the increasing demand for flexible living places and experiences. The Airbnb business could help you generate a solid income stream.
What Is Airbnb, and How Does It Work in Canada?
Airbnb is a global platform and online marketing opportunity. It allows individuals to rent out part or all of their property to travelers. It connects property owners with travelers for short-term accommodation. As an Airbnb host in Canada, you become a micro-hotel operator.
Guests book stays for their travel across the country through the platform. You provide accommodations, and Airbnb facilitates. The process for Airbnb is simple. The owner shows you the property pictures with a description and price. After that, the guest decides and books the desired dates and pays through Airbnb’s secure platform.
In Canada, Airbnb is responsible for collecting and remitting GST/HST and QST (in Quebec) on short-stay bookings unless the host registers themselves and provides their tax number to avoid duplicate collection.
Is Airbnb profitable in Canada?
Before starting any business, many people think about whether it’s profitable or not. So the answer is yes. Having an Airbnb business in Canada can be profitable. It depends on how you are operating, what the location is, the property type, and seasonal demand.
Profit is not just about revenue; it’s about your net income after expenses.. Many key factors can influence your total profit margin. Here at the following
- Your total occupancy rate. For example, the percentage of available nights that your property is reserved.
- The average daily rate. It means your typical rental income for each night is paid for.
- Total cost of your operation, including your utilities, insurance, supplies, cleaning costs, income tax, and rent or a mortgage.
- It also depends on local regulations, such as license fees and restrictions.
Airbnb Business Profitability in Canada: Is It Worth It?
| Factor | Consideration |
|---|---|
| Location | Urban centers like Toronto, Vancouver, Montreal = high demand |
| Occupancy | 70%+ is achievable with strong marketing and reviews |
| Costs | Taxes, maintenance, cleaning, utilities, licenses |
| Legal Limits | Caps on rental nights, registration delays |
| Revenue | $2,000–$6,000/month gross possible for downtown units |
How to Start an Airbnb Business in Canada
Here are the simple steps you can follow to start an Airbnb business in Canada.
1. Define Your Business Model
First, decide whether you will operate as a primary residence host or a multi-property manager. As a multi-property manager, you need more licenses and tax setup. However, you can also operate it as an investor. It may involve third-party co-hosting or Property Management.
If you want to set up your Airbnb legally and profitably. Our experts at Bestax Canada can help you choose the right structure. From individual to corporation.
2. Legal Requirements & Licensing
Regulations vary by province and municipality. A provincial registration is required by May 1, 2025, and your listing could be removed if not registered.
These include:
- Compliance with local short-term rental regulations
- Registration, licensing, or zoning requirements
- Safety requirements and inspections.
- Tax registrations (e.g., GST/HST)
- Insurance and liability coverage
- Business banking setup (if incorporated)
Ontario (e.g., Toronto):
- Only your principal residence is allowed for short-term rentals.
- Your property must register with the city (approx. $50 fee) and post the registration number on listings.
- There’s a 180-night annual cap for renting the entire home; private rooms have no limit.
- Mandatory 4% Municipal Accommodation Tax (MAT) is collected and remitted by Airbnb.
Quebec (especially Montreal):
- Hosts must register for tourist accommodation and display permit numbers; Airbnb cannot list unregistered properties
- Significant fines apply (up to $50,000 for individuals, $100,000 for platforms).
- In Montreal, you must register with CITQ and display your permit number. Short-term rentals are only allowed in specific zones, and fines for violations are high (up to $50,000 for individuals, $100,000 for platforms).
Alberta (e.g., Calgary):
- Operate under a business license framework (Tier 1 for 1–4 rooms, Tier 2 for 5+ rooms).
- Fire inspection required before approval.
Nova Scotia:
- STRs must register annually with the Tourist Accommodations Registry.
- New rules requiring documentation, fees ($50–$2,000 per unit), and heavy fines (up to $100,000) as of late 2024.
3. Tax Registration & Compliance
| Location | Key Rules | Fees / Limits |
|---|---|---|
| Toronto (ON) | Principal residence only, registration required | $50 fee, 180-night cap, 4% MAT |
| Montreal (QC) | CITQ registration, permit number mandatory | Summer only (June–Sept), fines up to $50K |
| Vancouver (BC) | Principal residence + 1 suite, registry ID needed | Business license, registry required by 2025 |
| Calgary (AB) | Business license + fire inspection | Tiered license fees by room count |
| Halifax (NS) | Provincial tourist registry required | $50–$2,000 fees, high fines for violations |
4. Insurance, Safety & Operational Setup
It’s important to comply with provincial/municipal safety standards. including smoke detectors, emergency exit plans, and emergency contact info. It’s also necessary to maintain records of night bookings, prices, rental type, and tax audits.
5. Listing & Operations
- Prepare your property: clean, photograph, furnish, and establish house rules.
- Create your Airbnb listing, clearly stating your principal residence status and registration number (where applicable).
- Set pricing strategy, accounting for fees, taxes, and local MAT.
- Track bookings, guest communication, and expenses carefully.
Ready to Launch or Grow Your Airbnb Business?
If you are considering launching your Airbnb business and you need expert guidance. Reach out to Bestax. Our professionals help you with tax planning, legal setup, and complex local regulations for your Airbnb business in Canada.
Quick FAQs
1. What do I need to start an Airbnb business in Canada?
Firstly, you need your principal residence, adherence to local licensing/regulations, tax compliance (GST/HST registration if needed), safety measures, insurance, and a quality listing.
2. Do I need a permit to operate an Airbnb in Ontario?
Yes, you must register your principal residence. Also, pay the fee (e.g., $50 in Toronto), and display the registration number for Airbnb.
3. Does Airbnb collect and remit taxes in Canada?
Yes, Airbnb collects and remits GST/HST and municipal accommodation taxes. Only for hosts who are not registered. However, if you are registered and provide your tax numbers, you manage the remittance.
4. Can I host Airbnb in multiple properties in Canada?
It depends on the location and rules. Like Ontario allows only your principal residence, B.C., Alberta, Quebec, and others may allow one additional suite. Separate business licensing is often required.
5. What safety standards must Airbnb hosts meet in Canada?
The safety standards include installing smoke/CO detectors, posting emergency exit plans and contacts, and complying with fire/building codes.
6. What records should Airbnb hosts keep for CRA audits?
You can keep records of booking dates and income, nightly rates, and Airbnb fees. Moreover, all receipts (utilities, supplies, maintenance) and tax remittance records.
7. What are the short-term rental rules in Toronto, Montreal, Vancouver, etc.?
Toronto: Principal residence only, registration, 180-night cap on whole-home, safety, and tax compliance.
Montreal (Quebec): Strong registration rules, a 3‑month annual rental limit, and high fines for non-compliance.
Vancouver/Metro: Principal residence + one suite; licensing required.
8. How do I prepare my property for Airbnb in Canada?
You need to ensure compliance (registrations, safety). Then, furnish and maintain cleanliness. Also, create compelling listings with accurate photos; price competitively while factoring in all associated costs.
Disclaimer: The information provided in this blog is for general informational purposes only. For professional assistance and advice, please contact experts.
