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

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

Short-term rentals (STRs) like Airbnb and VRBO are regulated in Merritt's Zoning Bylaw. The bylaw defines STRs as a building or part of a building rented out as temporary lodging for less than 30 consecutive days and no more than 90 days per year.

Starting a Short-Term Rental Business in Merritt

To legally operate a short-term rental in Merritt, you must:

• Be located in a permitted zone. STRs are allowed in AR1 (Agricultural), C2 (Tourist Commercial), C3 (Regional Commercial), C4 (Corridor Commercial), and C6 (City Centre) zones. They may be permitted with special approval in certain residential zones like R1, R2, R3, R6, R7, R8 and C5 (Neighbourhood Commercial).
• Obtain a valid business license from the city and display it on the premises. This triggers building and fire safety inspections.
• Not operate a B&B in the same building, or have a secondary suite in the STR building.
• Provide off-street parking in some residential zones, screened to minimize impacts on neighbors.

As of May 1, 2024, the Province of BC has also implemented a "principal residence requirement" that limits STRs to the operator's primary residence, plus one secondary suite or accessory dwelling on the same property. This applies in municipalities over 10,000 population like Merritt. There are some exemptions for certain property types.

Merritt updated its Zoning Bylaw in July 2024 to align with new provincial housing legislation. This allows increased residential density, such as adding secondary suites or detached dwellings depending on lot size, with the proper permits.

Enforcement of STR rules falls under a new Provincial Short-Term Rental Compliance and Enforcement Unit. They can investigate violations and issue fines from $500-$5000 per day per infraction for individuals, or up to $10,000 per day for corporations.

The province is also requiring STR platforms like Airbnb to share data and remove listings that don't display a valid business license at the request of local governments. However, Airbnb has pushed back, claiming the new rules put billions in tourism spending at risk.

In summary, Merritt and BC have implemented stricter rules around short-term rentals in an effort to free up more long-term housing supply. But with the proper zoning, permits, and principal residence, operating an STR is still very much allowed. Consult the City of Merritt's Planning Department for the most up-to-date requirements before launching an STR business.

Short-Term Rental Licensing Requirement in Merritt

To legally operate a short-term rental in Merritt, you must obtain a valid Short-Term Business Licence from the City. The application fee is $50 and is non-refundable.

The process involves:

1. Obtaining any required non-municipal inspections, assessments or permits first, such as:

1. Public Health Inspection from Interior Health if serving food
2. Safety permits from Technical Safety BC if applicable

2. Registering your business with the Province of BC and the Government of Canada

3. Submitting a Short-Term Business Licence Application to the City of Merritt, along with the $50 fee

4. Completing municipal inspections as required, which may include:

1. Building inspection
2. Fire safety inspection
3. Cross connection control inspection
4. Each inspection costs $50, up to a maximum of $150 if all 3 are needed

Paying the Short-Term Business Licence fee once your application is approved

The licence fee for a Short-Term Business Licence is $200 for 3 months, $300 for 6 months, or $400 for a full year. Licences can be renewed for the same durations and fees.

Submit your complete application package, along with payment, to:

City of Merritt
Business Licensing Department
2185 Voght Street
PO Box 189
Merritt, BC V1K 1B8

Processing time is typically 2-3 weeks from the time a complete application is received, including all necessary inspections and approvals.

Penalties for operating an STR without a valid licence include fines starting at $450 per offence. The City may also take further enforcement action, such as an order to cease operations, for continued non-compliance.

It's important to note that additional requirements may apply depending on the specific property and type of STR. Always check with the City's Business Licensing Department for the most current regulations and fees before proceeding with an STR business in Merritt.

Required Documents for Merritt Short-Term Rentals

To apply for a Short-Term Business Licence in Merritt, you will need to provide the following documents:

1. Completed Short-Term Business Licence Application form

1. Purpose: Provides the City with key details about your STR business
2. Obtain from: City of Merritt Business Licensing Department or online at merritt.ca/business-licence

2. Proof of ownership of the property, or written consent from the property owner

1. Purpose: Confirms you have the legal right to operate an STR on the premises
2. Obtain from: Your property title or signed letter from the owner

3. Copies of any required non-municipal inspections, assessments, or permits, such as:

1. Health Inspection report from Interior Health, if serving food
2. Safety permits or assessments from Technical Safety BC, if applicable
3. Purpose: Ensures compliance with health and safety regulations
4. Obtain from: The relevant provincial agencies as needed

4. Proof of principal residence, if required under the provincial STR regulations

1. E.g. government-issued ID, income tax returns, utility bills showing the address
2. Purpose: Confirms compliance with the principal residence requirement for STRs
3. Obtain from: Your own records

5. Proof of strata authorization, if the property is in a strata

1. Purpose: Shows the strata bylaws allow STR use
2. Obtain from: Your strata council or property management company

6. Payment of the $50 application fee

1. Purpose: Covers the cost of processing the application
2. Obtain from: By cheque, cash, or credit card payable to the City of Merritt

Submit your complete application package in person or by mail to:

City of Merritt
Business Licensing Department
2185 Voght Street
PO Box 189
Merritt, BC V1K 1B8

The City will then arrange any required municipal inspections. Once all inspections are passed and your application is approved, you will need to pay the applicable Short-Term Business Licence fee to receive your licence.

For the most current information on required documents and the application process, contact the City of Merritt's Business Licensing Department at 250-378-4224 or businesslicences@merritt.ca.

Merritt Short-Term Rental Taxes

When operating a short-term rental (STR) in Merritt, there are several taxes you need to be aware of and collect from your guests:

Goods and Services Tax (GST): This is a federal value-added tax of 5% applicable to most goods and services, including STR accommodations for stays of 30 nights or less. As an STR operator, you must register for, collect, and remit GST to the Canada Revenue Agency if your annual revenue exceeds $30,000.

Provincial Sales Tax (PST): British Columbia charges an 8% PST on all short-term room rentals (under 27 nights) by hotels, motels, Airbnbs, and other accommodations. This tax is in addition to the GST.

Municipal and Regional District Tax (MRDT): The MRDT is a tax of up to 3% charged in participating municipalities on accommodations for stays of less than 27 nights. This tax funds local tourism marketing and programs. In Merritt, the MRDT rate is 2%.

So in total, guests booking STRs in Merritt can expect to pay a 15% tax on their stay (5% GST + 8% PST + 2% MRDT). As the STR operator, you are responsible for collecting these taxes and remitting them to the appropriate authorities.

Note that if you only rent your property for periods longer than one month, the GST does not apply to the accommodation portion. However, GST still applies to any related guest fees.

Tax Deductions for STR Operators

As an STR business, you can deduct eligible expenses from your rental income to reduce your tax liability. Some common deductions include:

• Mortgage interest
• Property taxes
• Strata fees
• Utilities
• Repairs and maintenance
• Cleaning and landscaping services
• Insurance
• Advertising and platform fees (e.g. Airbnb, VRBO)
• Depreciation on furniture and equipment

Be sure to keep detailed records and receipts for all expenses claimed. Consult with a tax professional to ensure you are optimizing your deductions and remaining compliant with tax laws.

It's important to note that starting January 1, 2024, the federal government is denying expense deductions for STRs that are non-compliant with local regulations. This means if your STR does not have the proper permits or violates any municipal bylaws, you cannot claim tax deductions on that property. This measure aims to discourage STRs in order to increase the supply of long-term rental housing.

British Columbia Wide Short-Term Rental Rules

In addition to municipal regulations, short-term rental (STR) hosts in Merritt must also comply with province-wide rules set out in British Columbia's Short-Term Rental Accommodations Act. Key requirements include:

• Principal Residence Requirement: As of May 1, 2024, STRs are limited to the host's principal residence, plus one additional unit on the same property, such as a secondary suite or laneway house. This applies in communities with populations over 10,000, which includes Merritt. Some property types like strata hotels may be exempt if they meet certain criteria.
• Business Licence Display: Where required by the local government, STR listings must display a valid business licence number. Platforms must remove listings without a business licence at the request of the local government.
• Removal of Legal Non-Conforming Use: Effective May 1, 2024, legal non-conforming use protections will no longer apply to STRs. Previously, these protections allowed some STRs to operate even if they didn't conform to new bylaws.
• Data Sharing: Starting in May 2024, STR platforms will be required to share listing data with the Province on a monthly basis to assist with bylaw enforcement.
• Provincial Registry: By early 2025, BC expects to launch a provincial STR registry. Hosts will need to register and include their registry number in listings.

The Province has established a Short-Term Rental Compliance and Enforcement Unit (CEU) to ensure provincial STR rules are followed. The CEU can investigate alleged violations and issue fines from $500-$5000 per infraction.

These measures aim to return more STRs to the long-term rental market to help address BC's housing crisis. Over 19,000 entire homes in BC are currently being used as STRs for most of the year, reducing housing supply.

Merritt STR hosts and guests should stay informed on these evolving provincial regulations. Be sure to comply with the new rules to avoid penalties and help protect long-term rental housing in our community. Consult official sources like the BC government website for the most current information.

Does Merritt Strictly Enforce STR Rules?

Based on discussions in online real estate investing communities like BiggerPockets and Reddit, it appears that Merritt is not particularly strict in enforcing its short-term rental regulations compared to some other cities in British Columbia.

While Merritt does require STRs to have a business license and only allows them in certain zones, many hosts seem to operate under the radar without facing significant consequences. One Reddit user commented that "enforcement is still up to the stratas, if they have the stomach to go after everybody." This suggests that unless a strata council or neighbors actively complain, the city is not proactively cracking down on non-compliant STRs.

In contrast, some BC cities like Vancouver and Victoria have implemented much tougher rules in recent years, such as requiring STRs to be a host's principal residence. They also dedicate more resources to enforcement, with Vancouver hiring additional bylaw officers specifically to investigate illegal short-term rentals.

So while Merritt is not an STR free-for-all, it seems to be more lax than major tourist destinations that have felt the negative impacts of STRs more acutely. Merritt STR hosts still need to obtain a business license and follow the rules, but the risk of getting caught and penalized for violations appears lower than in stricter jurisdictions.

However, with the province implementing its own STR restrictions starting in 2024, including a registration system and enforcement unit, Merritt hosts may face greater scrutiny in the near future even if the city itself maintains a hands-off approach. As one BiggerPockets member put it, "You need to find out if your city is getting ready to regulate STRs. If it is, it could be very bad."

In summary, Merritt seems to be relatively Airbnb-friendly for now, with some hosts skirting the rules, but that could change quickly as BC takes a more active role in reining in short-term rentals. Aspiring STR investors in Merritt should carefully weigh the regulatory risks before jumping in.

How to Start a Short-Term Rental Business in Merritt

Starting a short-term rental business in Merritt requires careful planning and compliance with local regulations. Here's a step-by-step guide:

Determine if your property is eligible for STR use

• Check the zoning for your property. STRs are allowed in AR1, C2, C3, C4, and C6 zones. They may be permitted with special approval in certain residential zones like R1, R2, R3, R6, R7, R8 and C5.
• If your property is in a strata, confirm the bylaws allow STRs.
• Consult with the City's Planning Department early to confirm your property's eligibility and understand any restrictions.

Register your business

• Register your business with the Province of BC and the Government of Canada.
• Obtain any required provincial permits or inspections, such as a health inspection if serving food.
• Use BizPaL.ca to identify all the registrations and permits you may need.

Obtain a City of Merritt Short-Term Business Licence

• Complete the Short-Term Business Licence Application and submit it to the City along with the $50 application fee.
• Schedule any required municipal inspections, such as building, fire safety, or cross-connection control. Each inspection costs $50.
• Once your application is approved, pay the applicable Short-Term Business Licence fee ($200 for 3 months, $300 for 6 months, or $400 for 1 year).
• Start the licensing process well in advance of when you want to begin operating, as it can take 2-3 weeks.

Prepare your property for guests

• Ensure your property meets all safety requirements and is properly equipped for STR use.
• Consider hiring a professional photographer to showcase your space in its best light for your online listing.
• Refer to online Airbnb host checklists for guidance on how to outfit and stage your STR.

Create your online listing

• Choose an STR platform like Airbnb or VRBO and create your property listing.
• Be descriptive and highlight your property's best features, amenities, and location.
• Research other successful listings in your area for inspiration on how to make yours stand out.

Understand your tax obligations

• Register to collect the 8% PST and 2% MRDT (Municipal and Regional District Tax) on your bookings. The 5% GST may also apply if your annual revenue exceeds $30,000.
• Keep detailed records of your expenses to take advantage of any tax deductions for which you may be eligible.

Establish your house rules and booking policies

• Decide on your nightly rate, minimum stay, check-in/out times, maximum occupancy, pet policies, etc.
• Consider using a dynamic pricing tool to automatically adjust your rates based on demand.
• Be clear and upfront in your listing and communications about your house rules to avoid misunderstandings with guests.

Automate your STR business

• Use vacation rental software to streamline guest communication, booking management, cleaning coordination, and more.
• Shop around for software that integrates with your booking platform and meets your specific needs as a host.

Starting an STR business requires effort, but with the right planning and systems in place, it can be a rewarding venture. Always stay informed of any changes to Merritt's STR regulations and maintain open communication with your guests to ensure a positive experience for all.

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

For the most current and accurate information on short-term rental regulations and zoning in Merritt, contact:

City of Merritt Development Services Department
Phone: 250-378-8615
Email: planning@merritt.ca

The Development Services Department handles land use, zoning, development permits, and building permits and inspections. They can assist with questions about where STRs are allowed and the approval process.

You can also reach out to the Building, Safety & Inspection team within Development Services for inquiries related to building permits and inspections for STRs:

Email: building@merritt.ca

Merritt City Hall
2185 Voght Street
PO Box 189
Merritt, BC V1K 1B8
Phone: 250-378-4224
Email: info@merritt.ca

City Hall's business hours are Tuesday to Friday from 8:00am to 5:45pm, closed for lunch between 12:00-1:15pm.

In addition to City resources, connecting with the local STR host community can provide valuable insights and support:

1. Merritt STR Hosts Facebook Group - This is a private group for short-term rental operators in Merritt to network, ask questions, and share experiences. You need to request to join and be approved by an admin.
2. Merritt Real Estate Investing Club - While not STR specific, this group discusses real estate investing in the Merritt area, which often includes the STR market. They host monthly meetups. Find them on Facebook or Meetup.com.
3. Airbnb Community Center - The Airbnb website has active forums where hosts discuss a wide range of topics, including regulatory issues. Check the "Hosting in British Columbia" section for threads relevant to Merritt.

By engaging with both municipal staff and experienced local hosts, you can get a full picture of Merritt's evolving STR landscape to help start and operate your business successfully. The City wants to work with hosts to balance economic opportunities with community needs, so don't hesitate to reach out.

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

After searching Reddit, BiggerPockets, and Airbnb forums, I did not find any discussions or comments from Merritt short-term rental hosts specifically about the local regulations. The few relevant threads I came across were focused on other cities and regions.

For example:

1. On the r/oakland subreddit, there were a couple posts about Oakland, California's rules around short-term rentals, with hosts expressing frustration about the city's ban on non-owner occupied rentals under 30 days. However, this pertains to a different city.
2. On BiggerPockets, there was a post from an investor interested in purchasing a short-term rental property in Myrtle Beach. While Myrtle Beach has a thriving vacation rental market, the discussion did not mention anything about Merritt.

It seems that online forums do not currently have much discussion from Merritt hosts about the city's evolving short-term rental regulations. This could be because Merritt is a smaller market compared to major tourist destinations. Hosts there may rely more on official city resources and local networks for regulatory information and support.

As Merritt aligns its short-term rental policies with new provincial rules in the coming months, more online discussions among hosts will likely emerge. But for now, I did not find enough relevant host experiences to include in this section. The most current and reliable information still appears to be from the City of Merritt directly.

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.