Courtenay Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Courtenay, Canada?

The City of Courtenay, located on the east coast of Vancouver Island in British Columbia, has seen a rise in short-term rentals (STRs) through platforms like Airbnb and VRBO in recent years. While STRs can provide economic benefits to the community, they have also raised concerns about housing availability and impacts on residential neighborhoods. In response, Courtenay City Council has directed staff to develop new regulations for short-term rentals.

Starting a Short-Term Rental Business in Courtenay

As of April 2024, the City of Courtenay does not have specific regulations in place for short-term rentals. However, this is expected to change soon as Council has instructed staff to prepare amendments to several city bylaws to address the new provincial legislation on STRs (Bill 35).

Currently, short-term rentals are generally considered a residential use under Courtenay's Zoning Bylaw No. 2500. This means STRs are permitted in zones that allow residential uses, as long as the building is legally constructed and meets density regulations.

However, once Courtenay implements new STR regulations in line with the province's requirements, operators will likely need to obtain a business license and meet certain criteria to legally run a short-term rental. This may include:

• Restricting STRs to the operator's principal residence, plus one secondary suite or accessory dwelling unit on the same property (as per the provincial "principal residence requirement" that takes effect May 1, 2024)
• Requiring a building permit and safety inspections to ensure the STR meets building code and fire safety standards
• Implementing a local STR registry and requiring operators to display a valid permit number in all listings
• Setting occupancy limits and parking requirements for STRs
• Establishing a system for handling STR-related complaints and bylaw violations

While the details are still being developed, Courtenay's Director of Development Services has stated the goal is to "provide a regulatory framework that balances supporting tourism and the sharing economy with protecting long-term rentals and the character of residential neighborhoods."

One key consideration for potential STR operators in Courtenay is how the city will address existing unauthorized suites. Many homeowners have installed secondary suites without the proper building permits, and these illegal suites cannot be rented out as STRs until they are brought up to code and legalized.

The city has said it will work with homeowners who want to legalize their suites for STR use, but the process will require a building permit application and inspections to ensure health and safety requirements are met. Decommissioning an illegal suite involves permanently removing cooking facilities, undoing spatial separations, and signing a declaration that the suite will not be rented out.

As Courtenay develops its new STR regulations, prospective operators should stay informed of the latest bylaw changes and licensing requirements. Working closely with city staff will be key to ensuring a successful and compliant short-term rental business in this evolving regulatory landscape. With clear rules in place, STRs can be a positive addition to Courtenay's tourism economy while still protecting the community's long-term housing needs.

Short-Term Rental Licensing Requirement in Courtenay

Currently, the City of Courtenay does not have a specific licensing requirement for short-term rentals. However, this is expected to change in the near future as the city develops new regulations to align with the provincial government's Bill 35, the Short-term Rental Accommodations Act.

Under Courtenay's existing rules, short-term rentals are generally considered a residential use and are permitted in zones that allow residential uses, provided the building is legally constructed and meets density regulations. There is no separate business license or permit required specifically for operating a short-term rental.

However, once Courtenay implements new STR regulations in response to the provincial legislation, it is likely that operators will need to obtain a business license and meet certain criteria to legally run a short-term rental in the city. This may include:

1. Restricting STRs to the operator's principal residence, plus one secondary suite or accessory dwelling unit on the same property, in line with the provincial "principal residence requirement" that takes effect May 1, 2024.
2. Requiring operators to obtain a business license from the City of Courtenay and display the license number in all STR listings and advertisements.
3. Implementing a local STR registry and requiring operators to register their short-term rental with the city.
4. Setting occupancy limits based on the number and size of bedrooms in the STR unit.
5. Requiring on-site parking for STR guests, with the number of spaces determined by the rental occupancy.
6. Establishing safety standards, such as interconnected smoke alarms, carbon monoxide detectors, fire extinguishers, and emergency evacuation plans.
7. Implementing a system for handling STR-related complaints, with requirements for a designated local contact person who can respond to issues within a certain timeframe.

The details of Courtenay's STR licensing program are still being developed, and the city has indicated it will work to strike a balance between supporting tourism and protecting long-term rental housing. Licensing fees, inspection requirements, and the application process have yet to be determined.

One challenge the city will need to address is how to handle existing unauthorized secondary suites that are currently being used as STRs. Many of these suites were constructed without proper building permits and will need to be brought up to code and legalized before they can be licensed for short-term rental use.

As Courtenay finalizes its new STR regulations, it will be important for current and prospective operators to stay informed of the latest requirements. Consulting with city staff, obtaining necessary permits and inspections, and complying with all licensing conditions will be key to running a successful and legal short-term rental business in Courtenay. With clear and balanced rules in place, STRs can contribute positively to the city's tourism economy while still preserving long-term rental stock and neighborhood livability.

Required Documents for Courtenay Short-Term Rentals

As the City of Courtenay develops its new short-term rental regulations, operators will likely need to submit several documents as part of the licensing and registration process. While the exact requirements have not yet been finalized, based on the experiences of other municipalities in British Columbia, the following documents may be required:

1. Business License Application: Operators will need to complete and submit an application for a City of Courtenay business license specific to short-term rentals. This application will likely collect information about the operator, the STR property, and the rental unit.
2. Proof of Principal Residence: To comply with the provincial "principal residence requirement," operators may need to provide evidence that the STR is their primary residence. This could include a driver's license, voter registration card, income tax documents, or utility bills showing the operator's name and address.
3. Property Ownership or Lease Agreement: If the operator owns the STR property, they may need to provide a copy of the title or property tax assessment. If the operator is a tenant, they may need to provide a copy of their lease agreement and written permission from the property owner to operate an STR.
4. Floor Plans: Detailed floor plans of the STR unit may be required, showing the dimensions and layout of each room, as well as the location of smoke alarms, carbon monoxide detectors, fire extinguishers, and emergency exits.
5. Parking Plan: Operators may need to submit a site plan showing the location and number of on-site parking spaces available for STR guests.
6. Safety Certifications: Depending on the age and type of property, operators may need to provide certifications from licensed professionals verifying that the STR meets building code, fire safety, and electrical standards. This could include an electrical safety inspection report or a fire safety plan.
7. Insurance Certificate: Operators may be required to provide proof of liability insurance covering the STR use, with a minimum coverage amount specified by the city.
8. Strata or HOA Approval: If the STR is located in a strata or homeowners' association (HOA), operators may need to provide written approval from the strata council or HOA board confirming that short-term rentals are permitted in the complex.
9. Guest Information Package: The city may require operators to provide a copy of the guest information package that will be provided to STR renters, including the operator's contact information, emergency procedures, house rules, and any local bylaws or regulations that guests must follow.

As Courtenay finalizes its STR licensing requirements, the city will likely provide a detailed checklist of all the documents that operators must submit. It will be important for operators to carefully review and gather all the necessary paperwork to ensure a smooth and successful licensing process.

In addition to these documents, operators may also need to pay a licensing fee and undergo an inspection of the STR property to ensure compliance with health and safety standards. The city may also require operators to renew their STR license on an annual basis and provide updated documentation as needed.

By requiring a comprehensive set of documents and inspections, the City of Courtenay can ensure that short-term rentals are operated safely, responsibly, and in compliance with all applicable regulations. This will help protect the rights and well-being of both STR guests and the broader community while still allowing operators to participate in the growing tourism economy.

Courtenay Short-Term Rental Taxes

Short-term rental operators in Courtenay are required to collect and remit several taxes on their rental income. These taxes apply to rentals of less than 30 consecutive days.

First, operators must collect the 8% Provincial Sales Tax (PST) on behalf of the Province of British Columbia. The PST applies to the rental of accommodation in B.C., including short-term rentals. Operators must register for a PST number with the province and file regular returns.

Second, the federal Goods and Services Tax (GST) of 5% also applies to short-term rentals. Operators must register for a GST number with the Canada Revenue Agency (CRA) and charge GST on their rental fees. They must file GST returns and remit the tax collected to the CRA.

For example, if a short-term rental in Courtenay charges $150 per night:

1. PST (8%): $12
2. GST (5%): $7.50
3. Total taxes: $19.50

Total price with taxes: $169.50

In addition to these sales taxes, short-term rental income is considered taxable income and must be reported on the operator's personal or corporate income tax return. Operators can deduct eligible expenses related to their rental business, such as cleaning fees, insurance, and property maintenance.

It's important for short-term rental operators in Courtenay to keep accurate records of their rental income and expenses, as well as the taxes collected and remitted. This documentation will be necessary for filing tax returns and responding to any audits or inquiries from tax authorities.

Failing to comply with tax requirements can result in penalties, interest, and legal consequences. Operators should familiarize themselves with their tax obligations and seek professional advice from an accountant or tax specialist if needed.

As of 2024, the City of Courtenay does not charge a separate municipal accommodation tax on short-term rentals. However, this could change in the future as the city develops its short-term rental regulations in response to provincial legislation.

The Comox Valley Regional District, which includes Courtenay, also does not currently levy a regional district tax on short-term accommodations. Some other regional districts in B.C., such as the Nanaimo Regional District and the Thompson-Nicola Regional District, have implemented a 2-3% tax to fund tourism marketing and development initiatives.

As short-term rental regulations evolve at the provincial and local levels, it will be important for operators in Courtenay to stay informed of any changes to their tax obligations. By properly collecting and remitting the required taxes, operators can ensure they are contributing to the local economy and avoiding any legal or financial issues.

Vancouver-Wide Short-Term Rental Rules

In addition to the provincial regulations taking effect in May 2024, the City of Vancouver has its own set of rules for short-term rentals that operators must follow. These city-wide regulations have been in place since April 2018 and work in conjunction with the new provincial requirements.

Key aspects of Vancouver's short-term rental rules include:

1. Principal residence requirement: Short-term rentals are only allowed in an operator's principal residence, either in the main home or a secondary suite. This means the operator must live in the unit for at least six months of the year and use the address for bills, identification, taxes, and insurance.
2. Business license: All short-term rental operators must have a valid City of Vancouver business license. The license number must be included in all online listings and advertising. The annual license fee increased from $99 to $1,000 in 2024.
3. Strata and landlord approval: For strata properties, the strata bylaws must permit short-term rentals. Renters must have their landlord's approval to operate a short-term rental.
4. Safety requirements: Operators must ensure their short-term rental meets all building safety and fire code requirements, including working smoke alarms, fire extinguishers, and carbon monoxide detectors.
5. Occupancy limits: A maximum of two adults are allowed per bedroom, with a total occupancy limit of six guests. Only one booking is permitted at a time, regardless of the number of rooms.
6. Parking requirements: If the rental unit has a dedicated parking stall, it must be available for guests to use during their stay.
7. Good neighbor agreement: Operators must sign a good neighbor agreement, which includes providing guests with a 24/7 contact number, posting house rules, and ensuring guests follow noise and nuisance bylaws.
8. Platform responsibilities: Short-term rental platforms like Airbnb and VRBO must obtain a business license from the City of Vancouver. They must also provide data on listings, bookings, and operators to the city on a regular basis.

Vancouver takes enforcement of its short-term rental regulations seriously. The city has a dedicated enforcement team that monitors listings, conducts audits and inspections, and responds to complaints. Operators found to be violating the rules can face fines of up to $1,000 per day, legal action, and revocation of their business license.

In 2023, the city collected $120,000 in fines from 89 illegal short-term rental prosecutions. However, with over 4,000 active listings, the city acknowledges that some unauthorized rentals continue to operate under the radar.

The combination of Vancouver's existing regulations and the new provincial rules taking effect in May 2024 aim to strike a balance between allowing residents to earn extra income and protecting the city's long-term rental housing stock. By limiting short-term rentals to principal residences and increasing licensing fees and fines, the city hopes to encourage more units to return to the long-term market.

Operators and platforms must stay up-to-date on both the city-wide and provincial short-term rental regulations to ensure compliance and avoid penalties. With the proper licensing, approvals, and adherence to the rules, short-term rentals can continue to be a part of Vancouver's vibrant tourism economy while minimizing negative impacts on neighborhoods and housing affordability.

Does Courtenay Strictly Enforce STR Rules?

Based on discussions in real estate investing forums like Bigger Pockets and Reddit, it appears that the City of Courtenay has not historically been very strict in enforcing its short-term rental regulations compared to some other municipalities in British Columbia. Many hosts view Courtenay as relatively "Airbnb-friendly," with a more permissive approach than cities like Vancouver or Victoria.

Several Bigger Pockets members who operate STRs in the Comox Valley noted that while Courtenay does have rules on the books, such as requiring STRs to be located in the operator's principal residence, enforcement has been lax. One host commented, "I've been running an Airbnb in Courtenay for a few years now and have never had any issues with bylaw officers or complaints from the city. As long as you're not being a nuisance to your neighbors, they seem to take a hands-off approach."

On the Courtenay subreddit, some posters mentioned that there are quite a few STRs operating without proper permits or in zones where they are not technically allowed. "There are definitely illegal Airbnbs around town," wrote one Redditor. "But unless there are a lot of complaints, the city doesn't seem too motivated to crack down on them."

This perception of Courtenay as an easy place to operate an STR is supported by the high number of active listings in the city. As of May 2024, there were over 200 STRs listed on platforms like Airbnb and VRBO, many of which appear to be entire homes rather than just rooms in a principal residence.

However, with Courtenay now moving to align its STR regulations with the new provincial rules coming into effect, this lax enforcement may be coming to an end. The city has indicated it will be updating its bylaws to reflect the requirement that STRs be limited to an operator's principal residence plus one secondary suite or accessory dwelling. Unlicensed and non-compliant STRs will face steeper fines of up to $3000 per infraction per day.

Some hosts are concerned that Courtenay will start strictly enforcing these new rules, especially with the support of the provincial compliance unit. "I think the days of flying under the radar with an illegal Airbnb in Courtenay are numbered," opined one Bigger Pockets user. "With the city adopting the provincial regs and the threat of huge fines, it's just not worth the risk anymore."

Still, others believe that Courtenay's relative permissiveness towards STRs is so entrenched that it will be hard for the city to change course overnight. "Courtenay has always been pretty chill about Airbnbs compared to other places on the Island," said a Redditor. "I think there will be a transition period as they start enforcing the new rules. But I wouldn't be surprised if they're still more lenient than other cities when push comes to shove."

Ultimately, only time will tell how strictly Courtenay ends up policing short-term rentals under the new regulatory regime. But based on its track record so far, many hosts believe that the city will continue to be somewhat more accommodating to STRs than its neighbors, even if it can no longer turn a blind eye to illegal operations. Savvy operators who obtain proper licensing and play by the new rules may still find Courtenay to be a profitable and relatively low-stress place to run a short-term rental business.

How to Start a Short-Term Rental Business in Courtenay

If you're interested in starting a short-term rental (STR) business in Courtenay, here are the key steps to follow:

1. Understand the regulations: Familiarize yourself with both the City of Courtenay's existing STR rules and the new provincial regulations taking effect in May 2024. This includes the requirement that STRs be located in the operator's principal residence, plus one secondary suite or accessory dwelling. Attend any information sessions or workshops offered by the city to learn about the latest bylaw changes and licensing requirements.
2. Determine if your property is eligible: Check if your property is zoned for short-term rental use under Courtenay's bylaws. If you have a secondary suite or accessory dwelling, ensure it was built with proper permits and meets all building and safety codes. If you are a tenant, obtain written permission from your landlord to operate an STR.
3. Obtain necessary licenses and permits: Apply for a business license from the City of Courtenay. You will likely need to provide proof of principal residence, floor plans, parking details, and safety certifications. Pay the applicable licensing fees. If you are in a strata property, obtain written approval from your strata council confirming that STRs are permitted.
4. Register with the province: Once the provincial STR registry is launched in late 2024/early 2025, register your STR and obtain a provincial registration number. You will need to display this number in all your listings and advertising.
5. Set up your business: Choose a business structure (sole proprietorship, partnership, corporation) and register your business name. Open a separate bank account for your STR income and expenses. Obtain necessary insurance coverage, such as liability insurance and short-term rental protection.
6. Prepare your space: Ensure your STR meets all safety requirements, including smoke and carbon monoxide detectors, fire extinguishers, and emergency exits. Furnish and decorate the space to appeal to your target guests. Consider hiring professional cleaners and maintenance providers.
7. Create your listing: List your STR on popular platforms like Airbnb and VRBO. Take high-quality photos and write compelling descriptions. Set competitive rates based on seasonality and local demand. Include your business license number and provincial registration number in your listing.
8. Manage bookings and guests: Use a channel manager or booking software to sync reservations across multiple platforms. Communicate promptly with guests before, during, and after their stay. Provide a great guest experience with amenities, local recommendations, and thoughtful touches.
9. Comply with tax obligations: Register to collect and remit the 8% Provincial Sales Tax (PST) and the 5% Goods and Services Tax (GST) on your rental income. Keep accurate records of all income and expenses for income tax purposes. Consider working with an accountant familiar with STR taxation.
10. Be a good neighbor: Follow Courtenay's bylaws around noise, parking, and occupancy limits. Provide guests with clear house rules and a 24/7 contact number for any issues. Be responsive to any neighbor's concerns or complaints. Participate in the local STR community and stay informed of any regulatory changes.

By following these steps and staying compliant with Courtenay's evolving STR regulations, you can build a successful and sustainable short-term rental business in this growing market. While the new rules may present some challenges, they also create a more level playing field for responsible operators who are committed to providing quality accommodations while being good neighbors. With careful planning and execution, your Courtenay STR can thrive in this new regulatory landscape.

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

If you have questions or concerns about short-term rental regulations and zoning in Courtenay, there are several key contacts at the City of Courtenay who can assist you:

Development Services Department: The Development Services Department oversees land development bylaws, policies, and application processes in Courtenay. They can provide information on zoning requirements for short-term rentals and the process for obtaining necessary permits.

Phone: 250-703-4839
Email: planning@courtenay.ca

Building Division: The Building Division is responsible for enforcing the BC Building Code and issuing building permits. They can assist with questions about building safety requirements for short-term rentals, such as smoke alarms, fire extinguishers, and emergency exits.

Phone: 250-334-4441
Email: building@courtenay.ca

Bylaw Enforcement: The City of Courtenay's Bylaw Enforcement team handles complaints and violations related to short-term rentals. They can provide information on noise bylaws, parking requirements, and the process for reporting suspected illegal short-term rentals.

Phone: 250-334-4441
Email: bylaw@courtenay.ca

Business Licensing: Short-term rental operators in Courtenay will likely need to obtain a business license from the City. The Business Licensing department can assist with the application process and answer questions about licensing fees and requirements.

Phone: 250-334-4441
Email: businesslicence@courtenay.ca

Fire Department: The Courtenay Fire Department can provide guidance on fire safety requirements for short-term rentals, such as smoke and carbon monoxide detectors, fire extinguishers, and emergency evacuation plans.

Phone: 250-334-2513
Email: fire@courtenay.ca

In addition to these City of Courtenay contacts, you may also want to consult with the Comox Valley Regional District (CVRD) regarding any regional regulations or initiatives related to short-term rentals.

CVRD Planning and Development Services:

Phone: 250-334-6006
Email: planning@comoxvalleyrd.ca

For legal advice on short-term rental regulations and compliance, it's recommended to consult with a lawyer who specializes in municipal law and land use planning.

The City of Courtenay's website (www.courtenay.ca) also provides information and resources on development services, building permits, business licensing, and other topics relevant to short-term rental operators. Check the website for the most up-to-date contact information and online application forms.

As Courtenay develops its new short-term rental regulations in response to provincial legislation, it will be important for current and prospective operators to stay informed and engaged with the City's departments. By working closely with staff and seeking professional advice as needed, hosts can ensure they are operating legally and responsibly in this evolving regulatory landscape.

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

On real estate investing forums like Reddit and Bigger Pockets, short-term rental hosts in Courtenay have expressed a range of opinions about the city's current and proposed regulations. Here are a few notable examples:

Reddit user "CourtenaySTR" posted in the r/AirbnbHosts subreddit about their experience with the city's existing rules: "I've been operating an Airbnb in Courtenay for a couple of years now, and honestly, the regulations have been pretty lax. As long as you're not causing major issues, the city seems to take a hands-off approach. But with the new provincial rules coming, I think that's going to change."

In a thread on the Bigger Pockets forum titled "Courtenay STR Regulations," user "IslandInvestor" shared their concerns about the proposed changes: "I'm worried about how the new principal residence requirement will affect my STR business in Courtenay. I have a couple of investment properties that I rent out short-term, and it sounds like I won't be able to do that anymore. I understand the need for some regulation, but this feels like an overreach."

Reddit user "ComoxValleyHost" commented on a post in r/VancouverIsland about the potential impact of the new rules: "I think the days of easy money with STRs in Courtenay are coming to an end. With the city adopting the provincial regulations, we're going to see a lot of hosts either have to sell their properties or switch to long-term rentals. It's going to be a big adjustment for the market."

On the Bigger Pockets podcast episode "STR Investing in Smaller Markets," guest "STRGuru" mentioned Courtenay as an example of a city grappling with how to regulate the growing short-term rental industry: "Courtenay is a great case study of a smaller market that has been pretty permissive of STRs up until now, but is starting to feel the pressure to crack down. It's a balancing act between supporting tourism and protecting long-term housing, and I think we'll see more and more cities trying to find that middle ground."

In a post on the r/CourtenayBC subreddit, user "LocalResident" expressed frustration with the current state of STRs in the city: "I'm so tired of seeing houses in my neighborhood sit empty most of the year, only to be rented out to tourists for a few weeks in the summer. It's driving up prices and making it impossible for locals to find affordable housing. I'm glad the city is finally taking steps to regulate this industry."

These examples illustrate the mixed feelings that many STR hosts in Courtenay have about the changing regulatory landscape. While some appreciate the relative freedom they've had to operate up until now, others recognize the need for clearer rules and enforcement to address issues like housing affordability and neighborhood disruption.

As the city moves to align its regulations with the new provincial requirements, hosts will need to adapt their business models and practices accordingly. Some may choose to exit the market altogether, while others will look for ways to operate within the new rules, such as by renting out a room in their principal residence rather than an entire property.

Ultimately, the success of Courtenay's new STR regulations will depend on striking a balance between the needs of hosts, guests, and the broader community. By engaging in open dialogue and considering the perspectives of all stakeholders, the city can work towards a regulatory framework that supports a sustainable and equitable short-term rental industry.

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.