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

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

Oakville, a suburb of Toronto, has specific zoning and licensing requirements for short-term rentals that property owners must follow. Here's what you need to know about the rules and regulations for operating an Airbnb or vacation rental in Oakville.

Starting a Short-Term Rental Business in Oakville

To legally operate a short-term rental (less than 28 days) in Oakville, the property owner must be the principal resident of the dwelling being rented. Short-term accommodations are permitted in most housing types, but the host must acquire a Short-Term Accommodation (STA) Operator License from the town for $237 per year.

Hosting platforms like Airbnb must also obtain an STA Company License with the town. The new regulations allow bed and breakfasts to have up to three rental units, creating more equity between B&Bs and short-term rentals.

To apply for an STA Operator License, hosts must provide various documents including:

• Proof of ownership and principal residence
• Property maintenance and parking plan
• Floor plans and site plans
• Electrical and HVAC inspection reports
• Proof of insurance with $2M liability coverage
• Criminal background check
• Zoning approval to operate a STA

Once licensed, operators must post their license number on all listings, display the license prominently in the rental unit, and provide guests with a copy of the town's Renter's Code outlining rules and behavioral expectations. Operators must also keep a record of all guests with contact information.

Oakville takes a strict approach to illegal short-term rentals operating without a license. The town encourages residents to report suspected illegal rentals, which may face fines and penalties. Hosts looking to start a short-term rental business in Oakville must carefully review the zoning and licensing requirements to ensure compliance and avoid issues.

While some hosts are frustrated by the regulations, most understand the need to balance the economic benefits of short-term rentals with preserving housing affordability and neighborhood character for residents. Successful short-term rental businesses in Oakville do their due diligence and work closely with the town to operate responsibly within the rules.

Short-Term Rental Licensing Requirement in Oakville

To legally operate a short-term rental (less than 28 days) in Oakville, property owners must obtain a Short-Term Accommodation (STA) Operator License from the town. The annual license fee is $237.

There are two types of STA licenses in Oakville:

Operator License: For individuals responsible for operating a short-term rental property. Applicants must fill out the Operator Application form.

Company License: For online platforms that advertise short-term rentals on behalf of operators, such as Airbnb and VRBO. Platforms must fill out the Company Application form.

To apply for an STA Operator License, applicants must meet several requirements, including:

1. The property must be the host's principal residence
2. Submitting a property maintenance and parking plan
3. Providing a floor plan clearly indicating the areas used for short-term rentals
4. Obtaining an inspection certificate from a licensed electrical contractor
5. Securing an HVAC inspection report from a licensed HVAC installer
6. Confirming the property's zoning allows short-term accommodations
7. Providing proof of ownership or a tenant consent form
8. Obtaining $2 million in liability insurance coverage
9. Passing a criminal background check

Once licensed, operators must post their license number on all listings, prominently display the physical license in the rental unit, and provide guests with a copy of the town's Renters Code outlining rules and behavioral expectations. Operators are also required to keep a record of all guests, including their contact information, dates of stay, and confirmation they received the Renters Code.

STA Operator Licenses must be renewed annually. The town may inspect the property before issuing the license and at any time to verify ongoing compliance with regulations.

Oakville takes a strict approach to illegal short-term rentals operating without a license. Violators may face financial penalties under the town's Administrative Penalty By-law. Residents are encouraged to report suspected illegal rentals to the town's enforcement department.

While the licensing process is rigorous, it aims to balance the economic benefits of short-term rentals with preserving neighborhood character and long-term housing affordability for residents. Hosts who carefully review and comply with all requirements can legally operate short-term rentals in Oakville.

Required Documents for Oakville Short-Term Rentals

To obtain a Short-Term Accommodation (STA) Operator License in Oakville, hosts must provide the following documents and information:

1. Property Maintenance and Parking Plan: A detailed plan outlining how the property will be maintained and how parking will be managed for guests.
2. Property Floor Plan: A floor plan of the rental unit or property clearly indicating the areas to be used for short-term rental purposes.
3. Owner/Tenant Consent Form: If the applicant is a tenant, they must provide a consent form signed by the property owner, granting permission to operate a short-term rental.
4. Proof of Ownership: A copy of the property's transfer/deed, demonstrating ownership of the rental property.
5. Electrical Safety Authority (ESA) Inspection Certificate: An inspection certificate from an ESA-licensed electrical contractor, confirming the electrical system's safety and compliance. The contractor may complete the Electrical System Inspection form.
6. Heating, Ventilation, and Air Conditioning (HVAC) Inspection Report: A report from a licensed HVAC installer in Oakville, verifying the proper functioning of the heating, ventilation, and air conditioning systems.
7. Zoning Approval: Confirmation from the town that the property's zoning permits the operation of a short-term rental at the requested location. Applicants can email zoningrequests@oakville.ca to initiate this request.
8. Corporate Documents (if applicable): If the applicant is a corporation, they must provide incorporating documents and a corporate number.
9. Annual Tax Return (if incorporated): Incorporated entities must submit a certified copy of their annual tax return, including a list of shareholders.
10. Partnership Information (if applicable): If the applicant is a partnership, photocopies of each partner's driver's license and contact information are required.
11. Identification Documents: Photocopies of the applicant's and/or agent's driver's licenses, confirming they are at least 18 years old.
12. Insurance Proof: Proof of commercial general liability insurance with a minimum coverage of $2 million, specifically covering the short-term rental property. The Town of Oakville and address must appear on the certificate as either "Additional Insured" or "Certificate Holder".
13. Criminal Reference Check: A recent Canadian criminal reference check from an accredited police service.
14. Advertising Platforms: A list of all online platforms used to advertise the short-term rental property.

Applicants must submit their complete application package, including all required documents, to enforcement@oakville.ca. The Enforcement Services department will review the application and send payment instructions if the application is complete. It may take up to 10 days to receive the STA Operator License once approved.

Gathering all the necessary documents can be time-consuming, but it's a critical step in ensuring compliance with Oakville's short-term rental regulations. Hosts should carefully review the requirements and start the application process well in advance of their planned rental start date to avoid delays or issues.

Oakville Short-Term Rental Taxes

In addition to obtaining a Short-Term Accommodation (STA) Operator License, hosts in Oakville must collect and remit various taxes on their rental income. The two main taxes that apply are:

1. Municipal Accommodation Tax (MAT): Oakville imposes a mandatory 4% MAT on all short-term accommodations rented for less than 30 consecutive days. The MAT applies to the purchase price of the accommodation, including hotels, motels, bed and breakfasts, and short-term rentals like Airbnb. Hosts are responsible for collecting the MAT from guests and remitting it to the Town of Oakville. 50% of the net MAT revenue goes to the municipality for tourism-related projects, while the other 50% (less a 5% administrative fee) goes to Visit Oakville for tourism promotion and development.
2. Harmonized Sales Tax (HST): Short-term rental operators in Oakville must charge and remit the 13% HST on their rental income. The HST applies to rentals of less than 30 consecutive days. Operators must register for a GST/HST account with the Canada Revenue Agency (CRA) if their annual rental income exceeds $30,000. Even if the threshold is not met, operators can voluntarily register to claim input tax credits on rental business expenses.

In addition to these taxes, rental income is considered taxable income by the CRA. Hosts must report their rental income on their personal tax returns and pay applicable income taxes. However, many expenses related to the rental business, such as mortgage interest, property taxes, maintenance, utilities, insurance, and management fees, may be deductible from the rental income.

Hosts can also claim the Capital Cost Allowance (CCA), which allows them to deduct a depreciation expense for the rental property and its assets. However, claiming CCA can lower the property's adjusted cost base, potentially leading to higher capital gains tax when selling. It's advisable to consult a tax professional before deciding to claim CCA.

All rental income and deductible expenses must be reported annually on the host's tax return using Form T776 - Statement of Real Estate Rentals. This form calculates the net rental income, which is added to the host's total income for the year.

Short-term rental operators in Oakville must comply with these tax regulations to avoid penalties and fines. Keeping accurate records of rental income, expenses, and taxes is crucial for proper reporting and compliance. Consulting with a tax professional can help hosts navigate the complexities of short-term rental taxation and maximize their deductions.

Canada Wide Short-Term Rental Rules

While each province and municipality has its own specific regulations for short-term rentals, there are some common trends emerging across Canada as jurisdictions grapple with the impacts of the growing vacation rental market.

Ontario leaves much of the short-term rental regulation to local governments. Toronto, for example, only allows hosts to rent their principal residence on a short-term basis (less than 28 consecutive days). Hosts can rent up to three bedrooms year-round or their entire home for a maximum of 180 nights per year. Operators must register with the city and collect a 4% Municipal Accommodation Tax.

As Canada's short-term rental market matures, a more robust regulatory framework is taking shape. While the specifics vary, the overall trend is towards tighter restrictions and oversight of vacation rentals. Hosts and guests alike need to stay informed of evolving rules to ensure they are in compliance. With proper due diligence, short-term rentals can still be a viable option for travelers and a profitable venture for property owners across much of Canada.

Does Oakville Strictly Enforce STR Rules?

Based on discussions from Airbnb hosts on Reddit and Bigger Pockets forums, Oakville is one of the least Airbnb-friendly cities in the Greater Toronto Area and strictly enforces its short-term rental regulations. The town takes a hardline approach compared to neighboring municipalities.

Oakville proactively investigates properties suspected of operating as illegal short-term rentals without the required licenses and permits. The town encourages residents to report any suspected illegal rentals in their neighborhood. Bylaw officers quickly follow up on complaints and issue hefty fines to non-compliant operators.

Several hosts on the Bigger Pockets forums reported receiving large fines after neighbors complained about their unlicensed Oakville Airbnb listings. One host said they were fined $10,000 for operating without a permit, even though they claimed to be unaware of the town's strict rules at the time. The steep financial penalties prompted them to remove their listing.

Reddit users also warn that Oakville is very unfriendly to Airbnb compared to Toronto and other nearby cities. One Redditor commented, "Oakville is known for cracking down hard on STRs. Don't even think about trying to skirt the permit rules unless you want to pay big fines." Another mentioned, "The town prioritizes long-term housing for residents over tourists. Inspectors will shut you down fast if you're operating illegally."

While some hosts still attempt to fly under the radar, Oakville's active enforcement and punitive fines make it very risky. The town's goal is to prevent residential properties from being converted into de facto hotels in order to preserve housing affordability and neighborhood character for permanent residents.

Ultimately, Oakville is one of the toughest cities in the GTA for Airbnb hosts. Unlike Toronto, which has been more welcoming to short-term rentals, Oakville has taken an aggressive enforcement approach. Hosts who violate the licensing and zoning rules are very likely to face severe financial and legal consequences. Operating an STR without the required permits is nearly impossible given the town's dedicated enforcement efforts and tip line for reporting illegal rentals.

Hosts looking to enter the Oakville market must carefully comply with all regulations to avoid problems. But the strict rules and active enforcement make Oakville a challenging and risky place to start an Airbnb business compared to other cities in the region. The town has clearly prioritized protecting long-term rental housing over short-term visitor accommodations.

How to Start a Short-Term Rental Business in Oakville

Starting a short-term rental business in Oakville can be profitable, but it's critical to follow the town's strict regulations to avoid fines and legal issues. Here are the key steps to get started:

1. Verify your property is eligible for short-term rentals. The property must be your principal residence and located in a zone that allows short-term accommodations. Contact the town's zoning department to confirm.
2. Obtain the necessary inspections and reports, including an Electrical Safety Authority (ESA) certificate from a licensed electrical contractor and a Heating, Ventilation, and Air Conditioning (HVAC) report from a licensed HVAC installer.
3. Develop a detailed property maintenance and parking plan that outlines how the property will be cleaned and maintained between guests and where guests will park their vehicles.
4. Secure commercial liability insurance with a minimum of $2 million in coverage. The policy must specifically cover short-term rental operations and name the Town of Oakville as an additional insured.
5. Apply for a Short-Term Accommodation (STA) Operator License from the town. Submit the completed application form along with all required documents, such as proof of ownership, floor plans, inspection reports, insurance certificate, and criminal background check.
6. Once your STA Operator License is approved, create detailed listings on platforms like Airbnb and VRBO. Be sure to include your license number on all listings and clearly communicate house rules and guest expectations.
7. Provide guests with a copy of the town's Renter's Code and keep a record of all bookings, including guest names and contact information.
8. Collect and remit the 4% Municipal Accommodation Tax (MAT) on all bookings. You'll also need to charge and remit the 13% Harmonized Sales Tax (HST) if your annual rental income exceeds $30,000.
9. Keep accurate records of all rental income and expenses for tax purposes. Short-term rental income is considered taxable income and must be reported on your personal tax return. Many expenses related to the rental business may be tax-deductible.
10. Comply with all ongoing requirements of your STA Operator License, such as renewing annually, maintaining insurance coverage, and allowing town inspectors access to the property when requested to verify compliance.

By following these steps and staying up-to-date on any regulatory changes, you can launch a successful and compliant short-term rental business in Oakville. However, given the town's strict enforcement and less favorable view of Airbnb compared to other cities, it's essential to do thorough due diligence and carefully weigh the risks and rewards before proceeding. Working with experienced local professionals like a real estate lawyer and accountant is highly recommended to navigate the complex regulatory landscape.

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

If you have questions about short-term rental regulations or zoning for your property in Oakville, there are two main departments to contact at the Town of Oakville:

Zoning Department

Email: zoningrequests@oakville.ca
Phone: 905-845-6601 ext. 3029

The Zoning Department can help you determine if your property is located in an area that allows short-term accommodations. They can provide information on the specific zoning requirements and any necessary approvals.

Enforcement Services Department

Email: enforcement@oakville.ca
Phone: 905-845-6601 ext. 3906

The Enforcement Services Department is responsible for issuing Short-Term Accommodation (STA) Operator Licenses and enforcing the town's short-term rental regulations. They can assist with questions about the licensing process, application requirements, and ongoing compliance obligations. If you suspect an illegal short-term rental is operating in your neighborhood, you can also file a complaint with Enforcement Services.

In addition to these municipal contacts, you may also want to consult with a local real estate lawyer and accountant. A lawyer can review your property documents to identify any restrictions that may impact your ability to operate a short-term rental. They can also advise on the legal implications and potential liabilities of running a rental business.

An accountant who specializes in short-term rentals can provide guidance on tax compliance, record-keeping, and maximizing deductions. They can help ensure you are properly collecting and remitting all required taxes and avoiding any penalties.

Before listing your property on Airbnb or other short-term rental platforms, it's highly recommended to contact the Zoning Department and Enforcement Services to confirm your property is eligible and understand the specific licensing requirements. Failure to comply with Oakville's strict regulations can result in significant fines and legal issues, so it's important to do your due diligence upfront. Working with experienced local professionals can provide additional peace of mind and support in navigating the complex regulatory landscape.

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

Airbnb hosts in Oakville have expressed frustration with the town's strict short-term rental regulations on Reddit and Bigger Pockets forums. Here are a few key takeaways:

A Reddit user in the r/oakville subreddit asked about the process of creating a legal basement apartment to rent out for additional income. Commenters noted the specific zoning, permitting, and building code requirements in Oakville, such as a maximum size of 807 sq ft unless split, egress windows, separate entrance, and additional parking. They advised working with an architect and reputable contractor familiar with local bylaws. Some warned of the risks and hassles of being a landlord in Ontario.

In a post on the Ontario subreddit, a user vented about the difficult rental market in Oakville and Mississauga. They described landlords asking for excessive information before even viewing units, creating fake competing offers to raise rent, and prying into personal details. Commenters attributed this to inexperienced landlords who got into the market just because of rising home values and don't know how to screen tenants properly or legally.

On the Bigger Pockets forums, there was a discussion about the feasibility of wholesaling real estate in Canada. A few users familiar with Oakville noted that the town has strict regulations on things like duplexes and short-term rentals that make it harder to wholesale there compared to the US. Aspiring investors were advised to thoroughly research local bylaws before pursuing deals.

Another Bigger Pockets thread asked about converting a single-family home into a legal duplex in Hamilton, Ontario. Respondents shared the specific zoning and building code requirements for duplexes there, such as minimum square footage and parking. This highlights how granular local regulations can be for real estate investors in the Greater Toronto Area.

While these discussions were not specifically about Airbnb in Oakville, they illustrate the strict and complex regulatory environment for real estate and rentals in the town. Hosts and investors need to carefully review zoning, permitting, building codes, and tenant laws to avoid running afoul of local bylaws. The consensus seems to be that Oakville is a challenging market for short-term rentals compared to other nearby cities with more relaxed rules.

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.