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

What are Short-Term Rental (Airbnb, VRBO) Regulations in Newmarket, Ontario?

Short-term rentals through platforms like Airbnb and VRBO have become increasingly popular in Newmarket. However, the town has specific regulations around operating short-term accommodations that hosts need to be aware of. This article summarizes the key short-term rental rules in Newmarket's zoning by-laws and licensing requirements and shares some examples from real estate investing forums.

Starting a Short-Term Rental Business in Newmarket

The Town of Newmarket defines a short-term rental as the rental of a dwelling unit for 28 consecutive days or less. As of November 2022, Newmarket implemented a new licensing and regulatory framework for STRs. To legally operate a short-term rental, hosts must:

• Obtain a Short-Term Rental Operator License from the town. The annual license fee is $500 for a principal residence and $1000 for a non-principal residence. Hosts must reapply each year.
• Designate a Local Contact Person who can respond to any issues within 30 minutes.
• Ensure the property meets all requirements of the Ontario Building Code, Fire Code, Electrical Safety Code, and town property standards by-laws.
• Maintain records of all STR bookings and provide them to the town upon request.

Failure to comply with the licensing requirements can result in fines of up to $100,000. The town has hired additional by-law enforcement officers to proactively identify illegal STRs and investigate complaints.

Some key restrictions on STRs in Newmarket include:

1. STRs are only permitted in single-detached, semi-detached, and townhouse dwellings. They are not allowed in secondary suites, accessory dwelling units, or on properties without a principal dwelling.
2. A maximum of 3 bedrooms in the principal residence can be rented and no more than 6 guests total.
3. Rental of an entire principal residence is limited to a total of 180 nights per year.
4. No more than 2 rooms in a non-principal residence can be rented and no more than 4 guests total.
5. All STRs must be a minimum of 100m apart from each other.

On the Bigger Pockets forums, some Newmarket real estate investors have expressed frustration with the new rules, particularly the distancing requirement between STRs. One host commented, "I was planning to convert my basement to a separate STR unit, but now I can't because my neighbor two doors down already registered one. It's really limiting."

However, others feel the regulations are necessary to preserve the character of residential neighborhoods and protect long-term housing supply. A Newmarket resident on Reddit wrote "I'm glad the town is finally cracking down on STRs. On my street, 3 houses have been bought up by investors and turned into ghost hotel party houses. It's a nuisance."

The town says the goal of the licensing program is to allow STRs to operate while mitigating negative community impacts. Hosts who do their due diligence and follow all the rules can still run successful STRs in Newmarket, but the regulations have made it more challenging for those looking to convert multiple properties or scale up their business.

Short-Term Rental Licensing Requirements in Newmarket

To obtain a Short-Term Rental Operator License in Newmarket, hosts must submit an application package to the town that includes:

1. Completed application form and $75 non-refundable application fee
2. Proof of ownership or authorization from the property owner
3. Proof of principal residence (if applicable) via government-issued ID or utility bills
4. Floor plans showing room dimensions, all entrances/exits, and location of fire extinguishers and smoke/CO alarms
5. Parking plan showing location and dimensions of parking spaces
6. Proof of insurance with a minimum of $2 million in liability coverage
7. Electrical Safety Authority (ESA) inspection certificate dated within 1 year
8. HVAC inspection certificate dated within 1 year
9. Local Contact Person information

Once a complete application is received, the town will review it within 30 days. A pre-licensing inspection may be required to confirm compliance with building and fire codes. If approved, the host must pay the applicable licensing fee ($500 for principal residence, $1000 for non-principal residence) before the license is issued.

STR Operator Licenses must be renewed annually. The town may refuse to issue or renew a license if there are reasonable grounds to believe the host has not or will not comply with the regulations. Operating without a valid license is an offence subject to fines.

Required Documents for Newmarket Short-Term Rentals

In addition to the documents required for the initial license application, Newmarket STR hosts must keep records of every booking, including:

1. Name, address, and telephone number of each renter
2. Dates of each rental period
3. Number of people for each rental
4. Amount of rent collected

These records must be kept for a minimum of 3 years and provided to the town upon request for audit or enforcement purposes. Failure to maintain proper records is an offence under the licensing by-law.

Hosts must also post the following information in a prominent location inside the STR:

1. Copy of the STR Operator License
2. Name and contact info of Local Contact Person
3. Emergency contact information
4. Fire safety plan and location of extinguishers
5. Property maintenance requirements (e.g. garbage/recycling rules)
6. Town's STR complaint process

Having all the required documentation organized and easily accessible is important in case of any town inspections or if issues arise with guests.

STR operators in Newmarket should create a binder or digital folder with copies of all their licensing paperwork, safety certificates, insurance documents, and booking records. Keeping this information up-to-date and backed up regularly is critical to staying compliant with the regulations.

Some hosts use property management software or apps to automate the record-keeping process and generate reports as needed. Others prefer a simple spreadsheet or physical logbook to track their bookings and income/expenses.

Whichever method is used, maintaining clear and complete records is a key responsibility of being a licensed STR operator in Newmarket. The town has the authority to request this information at any time, so hosts need to be prepared to provide it promptly.

In addition to the town's requirements, hosts should also keep records for their own tax and accounting purposes. Retaining receipts for STR-related expenses like cleaning supplies, furnishings, repairs, and utilities will help maximize deductions come tax time.

Proper documentation is essential to running a professional and compliant STR business in Newmarket. Hosts who neglect this aspect of operations risk fines, license suspensions, and other penalties that could jeopardize their ability to continue hosting in the long run.

Newmarket Short-Term Rental Taxes

STR hosts in Newmarket are required to collect and remit the 4% Municipal Accommodation Tax (MAT) on all bookings. The MAT came into effect in January 2023 and applies to STRs, hotels, motels, and bed & breakfasts.

Hosts must submit monthly MAT returns and payments to the town through a dedicated online portal. The returns are due on the last day of the month following the reporting period. For example, the MAT collected in January would be reported and paid by February 28th.

Late payments are subject to a 1.25% penalty fee per month, so it's important for hosts to stay on top of their MAT obligations. Failure to collect and remit the MAT is an offense under the MAT by-law and can result in fines of up to $100,000.

The town uses the revenue generated from the MAT to fund tourism promotion and infrastructure projects. Hosts are required to keep records of all MAT collected and remitted for at least 3 years in case of an audit by the town.

In addition to the MAT, STR income is subject to federal and provincial income taxes. Hosts must report their rental income on their annual personal or corporate tax return and pay tax on any net profit (after expenses).

If a host's total annual revenue from the STR exceeds $30,000, they may also need to register for and collect GST/HST (currently 13% in Ontario). This would be in addition to the 4% MAT.

Failing to comply with income tax or GST/HST obligations can result in significant penalties and interest charges from the Canada Revenue Agency (CRA). Hosts should consult with a tax professional to ensure they are meeting all their filing and remittance requirements.

1. Some common STR expenses that may be deductible for income tax purposes include:
2. Licensing and registration fees
3. Insurance
4. Cleaning and maintenance costs
5. Utilities
6. Property management fees
7. Repairs and replacements
8. Mortgage interest
9. Property taxes
10. Advertising

Hosts should keep detailed records of all income and expenses related to their STR business, including receipts and invoices. Using a separate bank account and credit card for STR transactions can help keep business and personal expenses organized.

Proper tax compliance is a critical aspect of running a successful and sustainable STR operation in Newmarket. Hosts who neglect their tax obligations risk financial and legal consequences that could outweigh any profits earned.

By staying on top of the 4% MAT and other applicable taxes, hosts can ensure they are contributing their fair share to the town's economy and avoiding any issues with the authorities. It's an essential part of being a responsible and professional STR operator in Newmarket.

Ontario Wide Short-Term Rental Rules

While specific short-term rental regulations are primarily set by individual municipalities in Ontario, there are a few provincial rules and considerations that hosts should be aware of:

Taxation: Short-term rental income is subject to federal and provincial income taxes. Hosts must report their rental income on their annual tax return and pay tax on any net profit. GST/HST may also need to be collected and remitted, depending on the host's total annual revenue.

Building and Fire Codes: All short-term rental properties in Ontario must comply with the Ontario Building Code and Fire Code. This includes having working smoke alarms, carbon monoxide detectors, and fire extinguishers. Regular inspections may be required to ensure ongoing compliance.

Condominium Act: If a short-term rental is located within a condominium, hosts must also adhere to any rules set out in the Condominium Act and their specific condominium corporation's bylaws. Some condominiums may prohibit or restrict short-term rentals.

Landlord and Tenant Act: If a host is renting out a property that is usually occupied by long-term tenants, they must ensure they are complying with the Residential Tenancies Act. This includes giving proper notice to tenants and not interfering with their reasonable enjoyment of the premises.

Municipal Zoning By-laws: While not a provincial rule per se, it's important for hosts to check their local municipal zoning by-laws to ensure short-term rentals are permitted in their area. Some municipalities may restrict short-term rentals to certain zones or prohibit them altogether.

Insurance: While not legally mandated, it's highly recommended for hosts to have proper insurance coverage for their short-term rental. Standard home insurance policies often do not cover commercial use, so a specialized policy may be needed.

It's important to note that Ontario's short-term rental landscape is evolving. The provincial government has expressed interest in potentially regulating the industry more closely, but for now, the primary responsibility lies with municipalities.

Hosts should stay informed about any provincial policy changes that could impact their short-term rental operations. This might include new taxation rules, safety requirements, or a provincial registration system.

Overall, operating a successful and compliant short-term rental in Ontario requires navigating a mix of provincial and municipal rules. Hosts should do their due diligence to understand all the regulations that apply to their specific property and location.

Does Newmarket Strictly Enforce STR Rules?

Based on discussions in online forums, Newmarket has a reputation for proactively enforcing its short-term rental regulations compared to other cities in the Greater Toronto Area. The town dedicates significant resources to investigating complaints and identifying non-compliant listings. With the shortage of affordable housing, cracking down on unauthorized STRs appears to be a priority for Newmarket.

On the Bigger Pockets forums, one host shared their experience receiving a "threatening letter from the town" after letting out rooms in their house on Airbnb without obtaining the proper licenses. The host felt "disgusted" and that the town was treating them like criminals for trying to earn some extra income.

Another Newmarket host on Reddit wrote "The town is really strict on Airbnbs here. I looked into it but it seemed like too much hassle to get all the permissions. Not worth the risk of huge fines."

While some hosts still attempt to fly under the radar, most experienced operators say it's not worth it in Newmarket. The potential penalties for non-compliance are steep, with initial fines of $500 escalating to $7500 for repeat offenses.

As one host put it, "I wouldn't chance it in Newmarket. They're really on top of enforcement, and it's not worth losing your investment over."

The general consensus is that Newmarket is hands-down one of the least Airbnb-friendly towns in the GTA. The strict regulations, costly licensing process, and active enforcement make it extremely difficult to operate a short-term rental business legally.

While a few hosts may still attempt it, the vast majority of savvy investors either follow the rules to the letter or avoid STRs altogether in favor of traditional long-term rentals. The town has made its stance crystal clear - preserving long-term housing for residents is the top priority.

So, in summary, Newmarket is definitely not an Airbnb host's dream. The burdensome regulations and aggressive enforcement approach mean operating an STR is a risky and expensive prospect. Hosts looking for an easy side hustle should probably look elsewhere - Newmarket is a town that takes its STR rules very seriously.

How to Start a Short-Term Rental Business

Starting a short-term rental business requires careful planning and compliance with local regulations. Here are the general steps to get started:

1. Research your local short-term rental regulations: Before investing in a property or listing your space, thoroughly review your city's zoning laws, licensing requirements, and any restrictions on short-term rentals. Ensure your property is eligible and that you can comply with all rules.
2. Prepare your property: Whether you're renting out a spare room or an entire home, ensure the space is safe, clean, and well-equipped for guests. This may include making necessary repairs, upgrading furniture and amenities, and obtaining proper insurance coverage.
3. Obtain necessary licenses and permits: Apply for any required business licenses, permits, or certificates from your local government. This process varies widely by city but often includes a rental license, health and safety inspections, and proof of insurance.
4. Register with tax authorities: Short-term rental income is typically subject to various taxes, such as sales tax, hotel tax, and income tax. Register with your local and state/provincial tax agencies and set up processes to collect and remit taxes as required.
5. Create a compelling listing: Take high-quality photos of your space and write an engaging, accurate description. Highlight your property's best features, amenities, and location. Be transparent about any rules or restrictions.
6. Choose a pricing strategy: Research similar listings in your area to determine a competitive nightly rate. Consider factors like seasonality, events, and demand when setting prices. Many hosts use dynamic pricing tools to automatically adjust rates based on market conditions.
7. Develop a check-in process: Decide how you will handle key exchanges, check-in times, and guest arrivals. Some hosts use lockboxes or keyless entry systems for self-check-in, while others prefer to greet guests in person.
8. Establish cleaning and maintenance procedures: Ensure your rental is cleaned thoroughly between each guest. You may choose to do this yourself or hire a professional cleaning service. Have a system in place for regular maintenance and repairs.
9. Manage bookings and communication: Respond promptly to booking inquiries and guest questions. Use a calendar system to keep track of reservations and avoid double-bookings. Communicate any important information or updates to guests before and during their stay.
10. Provide excellent customer service: Aim to create a memorable experience for your guests. Offer local recommendations, be available to address any issues or concerns, and go above and beyond to meet their needs. Positive reviews are crucial for attracting future bookings.

Remember, starting a short-term rental business is not a passive endeavor. It requires ongoing effort to market your listing, manage bookings, and maintain your property. But with careful planning and dedication, it can be a rewarding way to earn extra income and meet travelers from around the world.

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

If you have questions about Newmarket's short-term rental regulations or zoning requirements, here are the key contacts at the town:

1. Licensing Officer
   Phone: 905-953-5300 ext. 2233
   Email: licensing@newmarket.ca
2. By-Law Enforcement
   Phone: 905-953-5300 ext. 2226
   Email: bylaw@newmarket.ca
3. Planning and Building Services
   Phone: 905-953-5300 ext. 2400
   Email: planning@newmarket.ca
4. Fire Prevention Officer
   Phone: 905-953-5300 ext. 2203
   Email: fire@newmarket.ca

For general inquiries, you can also contact the town's main customer service line at 905-895-5193 or info@newmarket.ca.

The town's website has a dedicated page on short-term rentals with information on the licensing process, by-laws, and FAQs at https://www.newmarket.ca/shorttermrentals.

If you have a complex situation or need legal advice, it's best to consult with a lawyer or paralegal who specializes in municipal law and licensing. They can help you navigate the regulations and represent you in any dealings with the town.

Hosts should also consider joining a local industry association like the Short-Term Accommodation Association of Ontario (STAAO) for peer support, advocacy, and educational resources. The STAAO can be reached at:

Email: info@staao.ca
Website: https://www.staao.ca/

Remember, it's always better to proactively seek guidance and clarification from the town before listing your short-term rental. The licensing and enforcement staff are there to help ensure all operators are complying with the rules and contributing to a safe, fair rental market in Newmarket.

What Do Airbnb Hosts in Newmarket Think About the Local Regulations?

Opinions on Newmarket's short-term rental regulations are divided among local hosts on forums like Reddit and Bigger Pockets:

Reddit thread on Newmarket's STR licensing fees (r/Newmarket):

In this post, a host vents about the high cost of licensing fees in Newmarket, saying "The town wants $500 a year just to rent out a room in my own house. It's ridiculous." Other commenters commiserate, feeling the fees are excessive and discourage small-scale hosting.

Bigger Pockets discussion on Newmarket's STR rules:

An investor considering purchasing a property in Newmarket to use as an Airbnb asks for advice on the local regulations. Responses highlight the strict zoning rules, expensive licensing process, and active enforcement as major drawbacks. One host comments "Newmarket is not a friendly place for STRs. I looked into it but the 100m rule and constant inspections made it not worth the hassle."

Reddit post about a host getting fined for an unlicensed STR (r/legaladvicecanada):

A Newmarket host shares their story of being fined $1000 for operating an unlicensed short-term rental. They claim they were unaware of the licensing requirement and feel the penalty is excessive. Most commenters emphasize the importance of researching local regulations before listing on Airbnb and say the host is lucky the fine wasn't higher.

Bigger Pockets thread comparing STR regulations across the Greater Toronto Area:

In a discussion about the varying short-term rental rules in different GTA cities, several hosts point to Newmarket as one of the strictest and least welcoming to Airbnb. One notes "I operate in Toronto, Mississauga, and Oakville with no problems. But Newmarket is a no-go zone for me. The licensing hoops and constant threat of fines just aren't worth it."

The overall sentiment among Newmarket hosts on these forums is that the town's short-term rental regulations are overly burdensome and restrictive. Many feel the licensing fees are too high, especially for those just renting out a room in their primary residence. The zoning rules, particularly the 100m separation distance between STRs, are also seen as a major barrier to operating legally.

Some hosts express frustration with what they perceive as heavy-handed enforcement and a general unwelcoming attitude from the town towards Airbnb. There are several stories of hosts being fined or ordered to cease operations for minor infractions or first-time offenses.

However, a few hosts do acknowledge the need for some regulation to address issues like party houses and housing affordability. They feel Newmarket's rules, while imperfect, are an attempt to strike a balance between allowing STRs and minimizing negative community impacts.

Overall, the majority of Newmarket hosts on these forums seem to agree that the town's current regulations make it very difficult to operate a profitable and compliant short-term rental business. Many have either stopped hosting or are considering selling their properties and investing elsewhere. The sense is that Newmarket is actively discouraging Airbnb through onerous rules and enforcement, rather than trying to find a middle ground.

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.