Colwood, Canada Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Colwood

As of May 1, 2024, the province of British Columbia has implemented new rules that restrict short-term rentals to principal residences in many communities, including Colwood. The principal residence requirement applies across B.C. in municipalities with a population of 10,000 and over and smaller neighbouring communities.

Under the new provincial rules, short-term rentals in Colwood are limited to:

• The host's principal residence
• Plus one secondary suite or accessory dwelling unit on the same property

There are some exemptions from the principal residence requirement, such as for certain strata-titled hotels/motels, fractional ownership properties, lodges, and student/employee housing.

Currently, the City of Colwood does not require a business license specifically for short-term rentals. However, the city is investigating the status of short-term rentals and may make changes to its bylaws in the future.

On Reddit, some users have reported seeing an increase in listings for former short-term rentals in the Victoria area, including larger properties outside of downtown that look like they were previously used as Airbnbs. One user noted seeing 3-bedroom apartments in Colwood listed for close to the price of a 3-bedroom house just a few weeks prior, with prices now "falling off a cliff".

The Colwood Official Community Plan, approved in 2018, guides development in the city. It does not appear to specifically address short-term rentals. However, the plan does state goals of providing housing choices in family-friendly neighborhoods.

Some have raised concerns that short-term rental hosts renting fewer than four rooms do not have to collect provincial sales taxes, creating an unfair business environment compared to hotels. This is an issue the city may examine more closely as it reviews its short-term rental policies.

In summary, short-term rentals in Colwood are currently allowed only in principal residences under provincial rules that took effect in May 2024. The city does not have additional licensing requirements at this time but is studying the issue. Prospective short-term rental operators should monitor for any future changes to Colwood's bylaws and ensure they are complying with the provincial principal residence requirement.

Short-Term Rental Licensing Requirement in Colwood

Currently, the City of Colwood does not require a specific business license for operating a short-term rental (STR). The city's website states:

"New Provincial Government legislation has indicated that short-term rental hosts must display a valid business license number on their platform/web listing in areas where a business license is required by the local government.

Currently, the City of Colwood does not require a business license for short term rentals."

However, the city is investigating potential changes to its short-term rental policies. At a Council meeting on May 8, 2023, "Council received an overview of the status of short-term rentals in Colwood. Council directed staff to investigate the parameters around instituting a short-term rental regulation bylaw including the possibility of applying a municipal tax specifically dedicated to the Affordable Housing Reserve Fund."

While Colwood does not have its own STR licensing requirements at this time, short-term rental operators in the city must still comply with the new provincial rules that took effect on May 1, 2024. These rules limit short-term rentals to the host's principal residence, plus one additional unit on the same property. STR hosts must also display a valid business license number on their listings in areas where the local government requires a business license.

Fines for non-compliance with the provincial STR regulations can range from $500 to $5,000. Additionally, the province has increased the maximum fine that regional districts can set for prosecutions of bylaw offenses from $2,000 to $50,000, consistent with the maximum fines for municipalities.

As the City of Colwood is currently reviewing its approach to short-term rentals, prospective STR operators should monitor the city's website and communications for any updates on new licensing requirements, fees, or penalties that may be implemented in the future. In the meantime, hosts must ensure they are following the provincial principal residence requirement and all other applicable regulations.

Required Documents for Colwood Short-Term Rentals

As of May 2024, the City of Colwood does not have its own short-term rental licensing requirements. The city's website states:

"Currently the City of Colwood does not require a business license for short-term rentals."

However, Colwood is investigating potential changes to its short-term rental policies. At a Council meeting on May 8, 2023, "Council directed staff to investigate the parameters around instituting a short-term rental regulation bylaw including the possibility of applying a municipal tax specifically dedicated to the Affordable Housing Reserve Fund."

While Colwood does not have specific STR licensing requirements at this time, short-term rental operators in the city must still comply with the new provincial rules that took effect on May 1, 2024. These rules limit short-term rentals to the host's principal residence, plus one additional unit on the same property.

Under the provincial regulations, STR hosts must display a valid business license number on their listings in areas where the local government requires a business license. Since Colwood does not currently require business licenses for short-term rentals, hosts in Colwood would not need to display a license number at this time.

However, hosts should be prepared to provide documentation showing their short-term rental is their principal residence if requested. Acceptable documentation may include:

1. Government-issued photo ID with address
2. Recent utility bills
3. Property tax statements
4. Tenancy agreements

Prospective STR operators in Colwood should monitor the city's website and communications for any updates on new licensing requirements that may be implemented in the future. In the meantime, hosts must ensure they are following the provincial principal residence requirement and all other applicable regulations to avoid potential fines of up to $5,000.

Colwood Short-Term Rental Taxes

When operating a short-term rental business in Colwood, British Columbia, there are several taxes to be aware of:

1. Provincial Sales Tax (PST): An 8% PST applies to sales of short-term accommodation provided in B.C., unless a specific exemption applies. This tax is charged on the total purchase price of the accommodation.
2. Municipal and Regional District Tax (MRDT): In addition to the 8% PST, Colwood may charge up to 3% MRDT on sales of short-term accommodation if the city decides to participate in the MRDT program. This tax would apply in the same manner as the PST. As of May 2024, it does not appear Colwood has implemented an MRDT.
3. Goods and Services Tax (GST): GST applies to short-term housing rentals for periods less than 30 consecutive days, while long-term residential rentals are exempt. If your total annual revenue from short-term rental activities exceeds $30,000 in a 12-month period, you are required to register for and collect GST at 5% from your guests.

It's important to note that the combined PST and MRDT rate can exceed 12% in some areas, which would make the accommodation subject to GST on top of the provincial taxes. However, this is not currently the case in Colwood with just the 8% PST.

As for potential deductions, you can deduct reasonable expenses incurred to earn rental income. Some examples of deductible expenses include:

1. Advertising costs
2. Insurance premiums
3. Property taxes
4. Utilities
5. Repairs and maintenance
6. Supplies
7. Travel expenses to manage the property

Keeping detailed records of all revenue and expenses is crucial for accurately reporting rental income and claiming deductions. Consult with a tax professional to ensure you are meeting all tax obligations and optimizing deductions for your short-term rental business in Colwood.

British Columbia Wide Short-Term Rental Rules

In addition to any local regulations in Colwood, short-term rental hosts must also comply with provincial rules that took effect on May 1, 2024. The key provincial requirements include:

1. Principal Residence Requirement: In communities with populations over 10,000, including Colwood, short-term rentals are limited to the host's principal residence, plus one additional unit on the same property such as a secondary suite or accessory dwelling. There are some exemptions for certain types of accommodations like strata-titled hotels.
2. Business License Display: Where required by local governments, short-term rental listings must display a valid business license number. Platforms must remove listings without valid license numbers upon request from the local government.
3. Removal of Legal Non-Conforming Use Protections: As of May 1, 2024, legal non-conforming use protections no longer apply to short-term rentals. This means pre-existing STRs that don't conform to new local bylaws are no longer grandfathered in.
4. Data Sharing: Short-term rental platforms are required to share data on listings with the provincial government on a monthly basis starting in summer 2024.
5. Provincial Compliance and Enforcement Unit: The province has established a new enforcement unit to investigate alleged non-compliance with provincial STR rules. Hosts found in violation may face fines ranging from $500 to $5,000.
6. Provincial Registration: By early 2025, the province plans to launch a provincial short-term rental registry. Hosts will need to include their provincial registration number on listings, and platforms will need to remove listings without valid registration.

The provincial government implemented these regulations with the goal of returning more short-term rentals to the long-term housing market amidst BC's housing crisis. Over 19,000 entire homes in BC were being used as STRs for most of the year as of March 2024.

Short-term rental hosts in Colwood must ensure they are complying with both provincial rules and any additional requirements set by the City of Colwood. With the city currently reviewing its approach to short-term rental regulations, operators should stay informed of any new local policies that may be introduced.

Does Colwood Strictly Enforce STR Rules?

Based on discussions from Reddit and Bigger Pockets, it appears that Colwood is fairly lax in enforcing short-term rental regulations compared to neighboring cities like Victoria. As of May 2024, Colwood does not require a specific business license for operating a short-term rental, while Victoria has implemented licensing requirements and is actively enforcing them.

One Reddit user noted, "Langford doesn't currently have any licensing system in place for short-term rentals. Stew Young and previous council would have been opposed to doing so." Another commented, "No 'specific' bylaw/licensing for STR. They may have just considered it like any other business that is subject to zoning, residency, and business bylaws, and not required anything specific to STR."

This hands-off approach has likely made Colwood more appealing for short-term rental operators compared to stricter jurisdictions. However, with Colwood City Council now investigating potential changes to its STR policies, this Airbnb-friendly environment may not last forever.

It's worth noting that even without strict local enforcement, hosts in Colwood must still comply with the province-wide rules that took effect in May 2024, including the principal residence requirement. Failure to do so could result in fines from the provincial compliance unit.

Overall, Colwood seems to be one of the more lenient cities in the region when it comes to short-term rental operations currently. But hosts should be prepared for potential policy changes down the line as the city evaluates its approach to regulating the industry.

How to Start a Short-Term Rental Business in Colwood

Starting a short-term rental business in Colwood, British Columbia involves several key steps to ensure compliance with local and provincial regulations. Here's a step-by-step guide to get you started:

1. Verify your property meets the principal residence requirement

1. As of May 1, 2024, short-term rentals in Colwood are limited to the host's principal residence, plus one additional unit on the same property like a secondary suite or accessory dwelling.
2. Ensure your property qualifies before proceeding with your STR business plan.

2. Review Colwood's zoning and business license requirements

1. Currently, the City of Colwood does not require a specific business license for operating a short-term rental.
2. However, Colwood City Council is investigating potential changes to its STR policies, so monitor the city's website for any updates on new licensing requirements.

3. Obtain necessary permits and inspections

1. While Colwood doesn't have STR-specific licensing currently, you may still need permits or inspections related to general business operations or property upgrades.
2. Contact the city to determine any applicable requirements, such as a fire inspection if operating out of a commercial space.

4. Register with the provincial government (coming soon)

1. By early 2025, British Columbia plans to launch a provincial short-term rental registry.
2. Once available, you'll need to register and include your provincial registration number on STR listings.

5. Set up your rental property

• Furnish and equip your space to create an inviting and functional STR.
• Consider hiring a professional photographer to showcase your property in its best light for online listings.

6. Create a detailed listing on popular STR platforms

• List your property on sites like Airbnb and VRBO, crafting an enticing description that highlights your space's best features and amenities.
• Be transparent about any quirks or limitations to manage guest expectations.

7. Establish house rules and rental agreement terms

• Clearly communicate your expectations for guest behavior, maximum occupancy, parking, etc.
• Consider requiring guests to sign a rental agreement to protect yourself and your property.

8. Implement a pricing strategy

• Research comparable STRs in your area to determine competitive nightly rates.
• Adjust pricing based on seasonal demand, special events, and other factors to optimize revenue.

9. Arrange for cleaning and maintenance

• Develop a reliable system for thoroughly cleaning your rental between guests, either DIY or by hiring a professional service.
• Have a plan for promptly addressing any maintenance issues that may arise during guest stays.

10. Comply with tax requirements

• In Colwood, short-term rentals are subject to the 8% Provincial Sales Tax (PST) on accommodation.
• If your annual STR revenue exceeds $30,000, you must register to collect the 5% Goods and Services Tax (GST) as well.

By following these steps and staying informed of any regulatory changes, you'll be well on your way to launching a successful short-term rental business in Colwood. Focus on creating a standout guest experience and maintaining compliance to set yourself up for STR success.

Who to Contact in Colwood about Short-Term Rental Regulations and Zoning?

If you have questions about short-term rental regulations and zoning in Colwood, here are some key contacts and resources:

1. City of Colwood Community Planning Department

• Phone: 250-478-5999
• Email: info@colwood.ca
• Key staff:
  Iain Bourhill, Director of Community Planning
  Yazmin Hernandez, Director of Development Services

2. City of Colwood Bylaw Services

• Phone: 250-478-5999 (ext. 146)
• Email: info@colwood.ca
• Contact for questions about business licensing and bylaw enforcement

3. Subscribe for City of Colwood news and updates at www.colwood.ca/subscribe to stay informed of any changes to STR policies.

4. Join community conversations and provide input on Colwood issues at LetsTalkColwood.ca.

For broader discussions and insights from other short-term rental hosts, consider joining online communities such as:

Reddit:

• r/airbnb_hosts - Subreddit for Airbnb hosts with over 85,000 members
• r/AirBNB - Subreddit used by both hosts and guests with over 280,000 members
• r/LangfordBC - Local subreddit where STR discussions sometimes arise

Facebook Groups:

• Airbnb Superhosts (https://www.facebook.com/groups/airbnbsuperhostsclub/)
• Airbnb Masterminds (https://www.facebook.com/groups/airbnbmasterminds/)
• Airbnb/VRBO/Homeaway STR Discussion

These online forums allow you to connect with experienced hosts, ask questions, and gather insights as you navigate the evolving world of short-term rental regulations in Colwood and beyond. Be sure to review each group's rules before posting.

What Do Airbnb Hosts in Colwood on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions in online forums, it appears that short-term rental hosts in Colwood and the surrounding Victoria area have mixed feelings about the local regulations:

In a Reddit thread about the new provincial short-term rental rules that took effect in May 2024, one user commented that Colwood does not currently require a specific business license for STRs. However, they noted the city is investigating potential changes to its policies, so this may not last.

Another Reddit user mentioned that their Airbnb host in Victoria requested they cancel their reservation after the new provincial rules took effect, as the property was no longer compliant. This suggests some hosts are having to adapt or cease operations due to the regulations.

In a thread about millennials' experiences living in Victoria, one commenter said they live in a suite in Colwood and spend about 3/7 of their income on rent. They noted this was before the new zoning changes that restrict short-term rentals.

A petition was posted on the r/VictoriaBC subreddit in October 2023 calling for a ban on Airbnb and similar short-term rentals in BC. Commenters noted the high number of active listings in Victoria and supported restricting STRs to rooms in primary residences only.

In July 2022, a news article was shared on r/VictoriaBC about a property owner in nearby Metchosin who was ordered to evict tenants living in tiny homes and RVs on her land, as it violated bylaws. Commenters noted these setups are common in rural areas but often get shut down once reported.

While there are no Colwood-specific threads on BiggerPockets, hosts on the forums often advise each other to thoroughly research local regulations before starting a short-term rental. Many emphasize the importance of ensuring the property is zoned and licensed correctly to avoid fines or shutdowns.

Overall, it seems STR hosts in the Colwood and Greater Victoria area are grappling with an evolving regulatory landscape. Some are having to make changes to comply with new rules, while others hope the city maintains its current hands-off approach. Staying informed of any policy updates will be key for hosts to adapt their business models as needed.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.