Posted: 2026 (Airbnb rules are constantly evolving, reach out for up-to-date advice).
Quick answer: Yes, in Ontario it’s legal, but there are significant restrictions on it based on your city.
If you’re picturing buying a second property purely to run it as an Airbnb, that plan doesn’t work in Toronto, Mississauga, Oakville, or Burlington under current bylaws. This catches a lot of prospective investors off guard, since short-term rentals was once hailed as the perfect alternative to a tenant (short-term, low risk, and quick turnover, so you never get stuck with a low-paying, long-term tenant).
Here’s what’s actually allowed, city-by-city, and what it means if short-term rental income is part of your investment plan.
The One Rule That Applies Almost Everywhere
Across nearly every GTA municipality, short-term rental bylaws hinge on one central requirement: the property has to be your principal residence… That’s the home where you actually live, sleep, and receive mail for most of the year. Investment properties, second homes, and units you don’t personally live in generally don’t qualify as short-term rentals.
This single rule is the biggest thing that’s changed since the early days of Airbnb in the GTA, when investors could buy a condo purely to run as a short-term rental with far less oversight. That strategy is largely closed off now.
City-by-City Breakdown
(There’s a consistent pattern here. Properties must be your principal residence, there’s a licensing fee, and there is a cap on how many days it can be rented out).
Toronto:
- Principal residence only
- Annual registration fee: $375 (new), $390 (renewal)
- Entire-home rentals capped at 180 nights per year; renting up to 3 private rooms in your own home has no night cap
- Municipal Accommodation Tax: 6%
- Registration number must be displayed on every listing
- You need your Airbnb-activity included on your insurance policy
Mississauga:
- Principal residence only
- Annual licence fee: roughly $283
- Entire-home rentals capped at 180 nights per year; stays of 30+ days fall outside the short-term rental rules entirely
- Municipal Accommodation Tax: 6%, on top of HST
- You need your Airbnb-activity included on your insurance policy
Oakville:
- Principal residence only
- Annual licence fee: roughly $250
- Requires proof of at least $2 million in commercial general liability insurance covering short-term rental use
- Municipal Accommodation Tax: 4%
- Demerit point system, after 7 demerit points, a licence can be suspended for 6 months.
- You need your Airbnb-activity included on your insurance policy
Burlington:
- Principal residence only
- Anual licence fee: roughly $300
- Uses a demerit-point system, like Oakville. After enough points are accumulated, you lose your ability to rent for a specified amount of time.
- Entire-home rentals capped at roughly 183 nights per year
- You need your Airbnb-activity included on your insurance policy
Your Condo Board Can Override the Local Bylaws
Your condo has the right to restrict rentals, and that doesn’t just apply to condo apartments. If you have a condominium townhome, the board can prohibit short-term rentals (like Airbnb) through the bylaws or through the condo rules.
If Airbnb is part of your homeownership plans, and you want to live in a condo, it’s very important to purchase a condo that allows Airbnb and other short-term leases.
Inside Tip: There is no list of Airbnb approved buildings… there’s over 3000 condos in Toronto alone, if you include the GTA, that will climb by a few thousand more. These condos are constantly changing their rules around rentals too. But, savvy agents figured out a quick way to see what buildings might be allowing Airbnb… by looking at your municipalities short-term rental licensing directory, you can see what buildings have residents with short-term rental licences. It is not a guarantee that the building allows STRs, but it’s a good first step. After finding properties on the SRT licence directory, you can then confirm with the building management directly.
Short-Term Rental Taxes
On top of licensing, every city listed above charges a Municipal Accommodation Tax (MAT) on short-term stays. Major platforms like Airbnb often collect and remit this tax automatically through agreements with individual cities, but hosts are typically still required to file their own periodic MAT reports regardless of whether the platform handled collection.
Separately, once your rental revenue crosses $30,000 in any 12-month period, you’re required to register for and remit GST/HST directly to the CRA, on top of any MAT obligations.
And finally, income tax is payable on the income earned on your Airbnb, since it is income.
What Happens If You Don’t Comply
Enforcement has genuinely tightened across the region. Operating without registration, renting a non-principal-residence property, or failing to remit required taxes can result in fines starting in the hundreds of dollars for a first offence, scaling up to $100,000 or more for serious or repeated violations. Non-compliant listings also risk being de-listed directly by the platform itself.
What This Means If You’re Buying for Airbnb Income
If short-term rental income is part of your investment plan, the principal residence requirement changes the math significantly. A property you don’t personally live in generally can’t be legally operated as a short-term rental in any of these municipalities, meaning the realistic options are:
- Live in the property yourself and rent out spare rooms or the whole home while you’re away, within your city’s night cap.
- Plan for a traditional long-term rental instead, and evaluate the property on that basis rather than assuming short-term income is available.
- Confirm your condo or municipality’s specific exceptions, since some allow secondary suites or laneway units to qualify as part of your principal residence if you genuinely live in the main unit.
We cover the broader investment property picture — financing, cap rates, and other strategies that don’t depend on short-term rental income — in our: Complete guide to buying an investment property.
Final Thoughts
Short-term rentals are still legal across the GTA, but the days of buying a second property purely to run as an Airbnb are largely over in Toronto, Mississauga, Oakville, and Burlington alike. If short-term rental income is part of your plan for a property you’re considering, contact us today, we can help you figure out what’s actually achievable before you buy, not after.
