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

What are Short-Term Rental (Airbnb, VRBO) Regulations in Nanaimo, British Columbia?

Short-term rentals, such as those listed on Airbnb and VRBO, have become increasingly popular in Nanaimo, British Columbia. However, the city has implemented regulations to ensure these rentals are operated responsibly and do not negatively impact long-term housing availability. Here's what you need to know about short-term rental regulations in Nanaimo.

Starting a Short-Term Rental Business in Nanaimo

To operate a short-term rental in Nanaimo, you must obtain a business license from the city. The annual fee for a short-term rental business license is currently $165. In addition to the business license, you must ensure your property meets the following requirements:

• The property must be your primary residence, where you live for at least eight months of the year.
• You can rent out a maximum of two guest rooms and host up to four guests in most residential zones, or four guest rooms and six guests in commercial and multi-family zones.
• You must provide one off-street parking space per guest booking.

If you're renting a secondary suite, it must be a legally constructed suite with a building permit. For strata properties or condos, check your strata bylaws to ensure short-term rentals are allowed.

As of May 1, 2024, new provincial regulations also require hosts to display a valid City of Nanaimo business license number on their listing across all platforms (Airbnb, VRBO, Booking.com, etc.). Later in 2024, the province will create a short-term rental registry, and hosts will need to register, provide proof of primary residency, and display their registration number in addition to their business license number.

The City of Nanaimo has increased fines for violating the short-term rental bylaw from $250 to $500 per infraction, per day. Since the bylaw was adopted in 2022, there have been 62 complaints about short-term rentals, with 67% related to unlicensed rentals.

Mayor Leonard Krog stated that the new regulations are a response to the impact short-term rentals were having on certain neighborhoods, such as "party houses" and excessive vehicles parked in residential areas. The goal is to limit negative impacts on neighborhoods while ensuring fair competition among short-term rental providers.

By licensing your short-term rental and following the regulations outlined in the Short-Term Rental Operator's Guidebook, you can help minimize the impact on long-term rental availability and local neighborhoods while supporting fair competition in the short-term accommodation market.

Short-Term Rental Licensing Requirement in Nanaimo

To legally operate a short-term rental in Nanaimo, you must obtain a business license from the city. The annual fee for a STR business license is currently $165. To apply for a license, you can:

1. Visit the City of Nanaimo Service and Resource Centre in person at 411 Dunsmuir Street
2. Apply online through the city's website
3. Mail your application to Business Licensing, 455 Wallace Street, Nanaimo, BC, V9R 5J6

When applying for a STR business license, you must provide:

1. Proof of primary residence, such as a BC Driver's License or BC Services Card showing the same address as the proposed STR, plus one of the following:
2. Home owner's grant declaration
3. Recent piece of mail
4. Voter identification card
5. Income tax form

A parking plan that includes one designated parking space per guest booking, in addition to parking requirements for other uses. If the unit is a strata and the required parking involves common property, the parking plan must be approved by the Strata Council or President.

The city began accepting STR business license applications on April 1, 2022, to give operators time to familiarize themselves with the new regulations. The process typically takes a few weeks, depending on the completeness of the application and any necessary inspections.

Fines for violating the STR bylaw have increased from $250 to $500 per infraction, per day, as of March 2024. Since the bylaw was adopted in 2022, there have been 62 complaints about STRs, with 67% related to unlicensed rentals.

It's important to note that if your STR is located in a secondary suite, it must be a legally constructed suite with a building permit. For strata properties or condos, check your strata bylaws to ensure STRs are allowed.

By obtaining a business license and following the city's regulations, you can help minimize the impact of STRs on long-term rental availability and local neighborhoods while supporting fair competition in the short-term accommodation market.

Required Documents for Nanaimo Short-Term Rentals

To apply for a short-term rental business license in Nanaimo, you must provide the following documents:

1. Proof of primary residence: This can be a British Columbia Driver's License or BC Services Card showing the same address as the proposed short-term rental, plus one of the following:

1. Home owner's grant declaration
2. Recent piece of mail
3. Voter identification card
4. Income tax form

The purpose is to ensure the short-term rental is operated out of the applicant's primary residence, where they live for at least eight months of the year.

2. Parking plan: The plan must include one designated off-street parking space per guest booking, in addition to the parking requirements for other uses. If the unit is a strata and the required parking involves common property, the parking plan must be approved by the Strata Council or President.

3. Strata authorization form: If the short-term rental is located within a strata development, a completed Strata Authorization Form must be submitted with the application.

4. Property owner authorization form: If the applicant is not the property owner, a completed Property Owner Authorization Form is required.

These documents must be submitted along with the short-term rental business license application, which can be done:

1. In person at the City of Nanaimo Service and Resource Centre located at 411 Dunsmuir Street
2. Online through the city's website
3. By mail to: Business Licensing, 455 Wallace Street, Nanaimo, BC, V9R 5J6

The annual business license fee for a short-term rental in Nanaimo is currently $165. Fines for operating without a valid license have increased from $250 to $500 per infraction, per day, as of March 2024.

It's important to note that short-term rentals must be located in legally constructed dwelling units or secondary suites with a valid building permit. For strata properties, ensure short-term rentals are permitted under the strata bylaws before applying.

Nanaimo Short-Term Rental Taxes

As a short-term rental operator in Nanaimo, it's important to understand the various taxes that apply to your business. Here's a breakdown of the taxes you'll need to collect and remit:

Provincial Sales Tax (PST): In British Columbia, an 8% PST is charged on all short-term room rentals by hotels, motels, cottages, inns, resorts, and other roofed accommodations. This tax is collected by the operator and remitted to the provincial government.

Municipal and Regional District Tax (MRDT): Nanaimo charges a 3% MRDT on short-term rentals, which is used to fund local tourism marketing, projects, and programs. This tax is collected by the operator and remitted to the provincial government, which then distributes the funds to the municipality.

Goods and Services Tax (GST): The federal GST is a value-added tax of 5% that applies to most purchased goods and services, including short-term rentals. As an operator, you must collect this tax from your guests and remit it to the Canada Revenue Agency.

In total, guests in Nanaimo can expect to pay an additional 16% in taxes on top of their short-term rental accommodation costs (8% PST + 3% MRDT + 5% GST).

Tax Deductions and Write-Offs

As a short-term rental operator, you may be eligible for certain tax deductions and write-offs to help offset your tax liability. Some common deductions include:

1. Property taxes
2. Insurance premiums
3. Utility fees (if paid by the landlord)
4. Property management fees
5. Advertising costs
6. Maintenance and repair expenses

It's important to keep accurate records of all your expenses and consult with a tax professional to ensure you're claiming all eligible deductions.

By understanding the tax requirements and potential deductions for your short-term rental business in Nanaimo, you can ensure compliance with local regulations and maximize your profitability.

British Columbia Wide Short-Term Rental Rules

In addition to Nanaimo's specific short-term rental regulations, hosts must also comply with provincial rules set forth in the Short-Term Rental Accommodations Act. Key provincial requirements include:

1. Principal Residence Requirement (effective May 1, 2024): Short-term rentals are limited to a host's principal residence, plus one additional unit, such as a secondary suite or accessory dwelling unit on the same property. This applies to communities with a population over 10,000 or those within 15km of a larger municipality.
2. Business License Display (effective May 1, 2024): Hosts must display a valid business license number on their listings in areas where a business license is required by the local government. Platforms must remove listings without valid license numbers upon request from the local government.
3. Increased Fines: As of October 2023, the maximum fine for bylaw offenses increased from $2,000 to $50,000. The maximum municipal ticketing fine also increased from $1,000 to $3,000 per infraction, per day.
4. Data Sharing: Starting in the summer of 2024, short-term rental platforms like Airbnb and Vrbo must share listing data with the provincial government monthly to aid in enforcement.
5. Provincial Registry (late 2024/early 2025): The province aims to establish a short-term rental registry. Hosts will need to include their provincial registration number on listings, and platforms must validate these numbers against the registry.
6. Compliance and Enforcement: A new provincial compliance and enforcement unit will be established to ensure provincial rules are followed. They may issue compliance orders to remove listings violating the regulations.

It's important to note that these provincial rules serve as a baseline, and municipalities like Nanaimo may have stricter regulations in place. Hosts are responsible for ensuring they comply with both provincial and local requirements to avoid fines and other penalties.

Does Nanaimo Strictly Enforce STR Rules?

Nanaimo has taken a proactive approach to regulating short-term rentals, but enforcement can be challenging. The city relies primarily on a complaint-driven process to identify non-compliant listings. Mayor Leonard Krog stated, "If you're doing something that may breach a bylaw on your property if your neighbors don't complain, and they're okay with it, we're not going to be sending people around to investigate."

However, the city has increased fines for violating the short-term rental bylaw from $250 to $500 per infraction, per day, as of March 2024. Since the bylaw was adopted in 2022, there have been 62 complaints about short-term rentals, with 67% related to unlicensed rentals.

Compared to other cities, Nanaimo could be considered somewhat Airbnb-friendly, as it allows short-term rentals in a host's primary residence, plus one additional unit, subject to obtaining a business license and following regulations. However, the city is taking steps to limit the negative impacts of short-term rentals on housing availability and neighborhoods.

On real estate investing forums like BiggerPockets, hosts have expressed mixed opinions about operating short-term rentals in Nanaimo. Some have successfully run Airbnbs in compliance with the rules, while others have faced challenges navigating the regulations and obtaining the necessary permits.

In conclusion, while Nanaimo does enforce its short-term rental rules, the city primarily relies on complaints to identify non-compliant listings. Despite the regulations, many hosts continue to operate short-term rentals in Nanaimo, though they may face fines if found in violation of the bylaws. The city strikes a balance between allowing short-term rentals and mitigating their impact on the community.

How to Start a Short-Term Rental Business in Nanaimo

Starting a short-term rental business in Nanaimo can be a rewarding venture, but it's important to follow the proper steps to ensure compliance with local regulations. Here's a step-by-step guide to help you get started:

1. Determine if your property is eligible: Your short-term rental must be your primary residence, where you live for at least eight months of the year. You can rent out a maximum of two guest rooms and host up to four guests in most residential zones, or four guest rooms and six guests in commercial and multi-family zones. If you're renting a secondary suite, it must be a legally constructed suite with a building permit.
2. Obtain a business license: Apply for a short-term rental business license from the City of Nanaimo. The annual fee is currently $165. You can apply in person at the City of Nanaimo Service and Resource Centre, online through the city's website, or by mail. Provide proof of primary residence, a parking plan, and any necessary strata or property owner authorization forms. Start the licensing process early to allow time for application processing and any necessary inspections.
3. Prepare your space: Ensure your rental space is clean, well-maintained, and equipped with essential amenities like bedding, towels, and kitchen supplies. Consider hiring a professional photographer to capture high-quality images of your rental for your listings. Provide a welcome guide with house rules, local recommendations, and emergency contact information to help guests feel at home.
4. Create your listing: Choose a short-term rental platform like Airbnb or Vrbo to list your property. Craft an engaging description, upload high-quality photos, and set competitive rates. Be sure to include your business license number in your listing to comply with provincial regulations. Research similar listings in your area to ensure your pricing and amenities are competitive.
5. Manage your bookings: Respond promptly to guest inquiries and maintain a high level of communication throughout the booking process. Use a calendar system to keep track of reservations and avoid double bookings. Consider using a property management software or hiring a property manager to streamline the booking and communication process.
6. Comply with tax requirements: Collect and remit the 8% Provincial Sales Tax (PST), 3% Municipal and Regional District Tax (MRDT), and 5% Goods and Services Tax (GST) on your short-term rental income. Keep accurate records of your income and expenses for tax purposes. Consult with a tax professional to ensure you're claiming all eligible deductions and maximizing your tax benefits.
7. Be a responsible host: Ensure your guests follow noise and parking regulations to minimize the impact on your neighbors. Regularly maintain and inspect your rental to ensure it remains in good condition. Provide a contact number for guests to reach you or a property manager in case of emergencies or issues during their stay.

By following these steps and staying informed about Nanaimo's short-term rental regulations, you can successfully launch and operate a compliant and profitable short-term rental business in the city.

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

If you have questions about short-term rental regulations or zoning in Nanaimo, there are several resources available:

City of Nanaimo Business Licensing: For inquiries related to obtaining a short-term rental business license, contact the Business Licensing team at 250-755-4482 or via email at business.licence@nanaimo.ca.

City of Nanaimo Planning Department: For questions about zoning and land use regulations, contact the Planning Department at 250-755-4429 or by email at planning.info@nanaimo.ca.

Short-Term Rental & Bed and Breakfast Review: Visit the City of Nanaimo's webpage dedicated to the Short-Term Rental and Bed & Breakfast Review at https://www.nanaimo.ca/your-government/projects/short-term-rental-and-bed-breakfast-review for comprehensive information and resources.

Regional District of Nanaimo (RDN) Planning Department: If your property is located within the RDN but outside the City of Nanaimo, contact the RDN Planning Department at 250-390-6510, toll-free at 1-877-607-4111, or by email at askplanning@rdn.bc.ca.

In addition to these official resources, you may find it helpful to connect with other short-term rental hosts in Nanaimo through online communities and forums:

1. BiggerPockets Nanaimo Real Estate Investors Group: Join the discussion and connect with local investors at https://www.biggerpockets.com/forums/785/topics/626831-nanaimo-meetup-anyone-interested.
2. Nanaimo Short-Term Rental Operators Facebook Group: While not an official resource, this Facebook group provides a platform for Nanaimo short-term rental hosts to share experiences, ask questions, and stay informed about local regulations.

By reaching out to the appropriate city departments and engaging with the local short-term rental community, you can ensure you have the most up-to-date information on regulations and zoning in Nanaimo.

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

Airbnb hosts in Nanaimo have mixed opinions about the local short-term rental regulations, as evidenced by discussions on Reddit and BiggerPockets forums. Here are a few real-life experiences and stories from verified Nanaimo threads:

On the Nanaimo subreddit, one host shared their experience trying to start an Airbnb: "Hi, thanks I have checked with the city and their website, and it states you are allowed a short term rental 120 days of the year but you have to apply for a licence from them. If you are renting out your basement as an Airbnb then you are exempt." This suggests some hosts are navigating the licensing process and understanding the specific requirements for different types of rentals.

Another Redditor pointed out the potential impact of strata rules on short-term rentals: "Depends on the strata. Each will have their own individual rules. My strata only allows semi-short term rentals (must be at least 28 days) or long term rentals, specifically due to Airbnb." This highlights the importance of considering strata bylaws in addition to city regulations.

On BiggerPockets, a user posted about organizing a meetup for real estate investors in Nanaimo, mentioning they are the new organizer for the Nanaimo Real Estate Investors Group on Meetup.com. While not directly related to short-term rentals, this suggests there is an active community of real estate investors in Nanaimo who may be navigating local regulations.

In a Reddit thread about a petition to ban Airbnb in BC, one user commented: "Virtually all of the AirBnB hosts I've met (as a guest) have seemed really nice, so personally I'm happy funding their retirement (or whatever)." This perspective suggests some residents see value in short-term rentals and the income they provide for hosts.

Another Redditor expressed frustration with the impact of short-term rentals on housing availability: "The housing shortage is caused by greed and airbnb." This sentiment reflects concerns about the potential negative effects of short-term rentals on the long-term rental market.

Overall, these discussions indicate that Airbnb hosts in Nanaimo have diverse opinions and experiences related to local short-term rental regulations. While some are successfully navigating the licensing process, others face challenges with strata rules or concerns about the impact on housing availability. As the city continues to refine its short-term rental policies, it will be important to consider the perspectives of both hosts and the broader community.

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.