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

Starting a Short-Term Rental Business in Tofino

Starting a short-term rental (STR) business in Tofino, Canada requires navigating a complex set of regulations that have recently undergone significant changes. As of March 2024, Tofino's district council voted to opt-in to British Columbia's new STR restrictions, despite previously being exempt as a resort community.

Under the new rules, which will take effect on November 1, 2024 in Tofino, STRs will be limited to a host's principal residence plus either a secondary suite or accessory dwelling unit on the same property. This means investment properties can no longer be operated as STRs in Tofino.

The decision to opt-in to these restrictions came after heated debate in the community. Proponents argued it was necessary to protect Tofino's limited housing stock for long-term residents and workers. However, some STR operators pushed back, saying it would hurt the tourism economy and unfairly impact those relying on rental income.

To legally operate a STR in Tofino, hosts will need to obtain a business license from the district and comply with existing bylaws regulating things like occupancy limits, parking requirements, and safety standards. Licensing fees range from $250-350 annually based on the number of bedrooms.

It's important to note that as of May 1, 2024, legal non-conforming status for existing STRs will be eliminated province-wide. This means any STRs operating in areas not zoned for such use will need to cease operations, even if previously grandfathered in.

Enforcement of the new rules will be handled by the province's new STR Enforcement Unit, which will have the power to issue fines of up to $5,000 per day for non-compliant listings. The unit will be working with STR platforms to remove illegal listings and share data on operators.

For those still able to operate STRs under the new rules, it's critical to understand the tax implications. STR income is subject to GST/HST taxation, as well as income tax. Hosts will need to register to collect and remit these taxes accordingly.

Despite the new restrictions, there may still be opportunity for STR businesses in Tofino that can adapt to the principal residence model. With strong year-round tourism demand and limited traditional accommodations, well-located and marketed STRs can likely still perform well.

However, with the changing regulatory landscape, aspiring STR entrepreneurs will need to carefully weigh the risks and challenges of operating in Tofino. Consulting with local authorities, tax professionals, and experienced operators is advisable before launching a STR business in this evolving market.

Short-Term Rental Licensing Requirement in Tofino

To legally operate a short-term rental (STR) in Tofino, property owners must obtain a valid business license from the District of Tofino. The licensing requirements are outlined in the District's Business Licence Regulation Bylaw and on their official website.

To apply for an STR business license in Tofino, owners must submit the following:

• Completed Short-Term Rental Business License Application form, available on the District of Tofino website
• Proof of ownership, such as a property title or land registry document
• Floor plan of the property, including room dimensions and locations of smoke alarms and fire extinguishers
• Proof of insurance, with a minimum of $2 million in commercial general liability coverage
• 24/7 contact information for the owner or a local representative who can respond to issues within 30 minutes
• Parking plan showing the location and number of off-street parking spaces for guests
• Good Neighbour Agreement signed by the owner, agreeing to follow noise, parking, and garbage regulations
• Payment of the annual business license fee, which varies based on the number of bedrooms:
  - 1 bedroom: $450
  - 2 bedrooms: $750
  - 3 bedrooms: $1,050

Applications and supporting documents can be submitted in person at the District of Tofino Municipal Hall or emailed to businesslicence@tofino.ca. The typical processing time for an STR business license is 2-4 weeks.

It's important to note that STRs are only permitted in certain zones as outlined in the District's Zoning Bylaw. Owners must ensure their property is located in a zone that allows STRs and complies with any additional regulations, such as occupancy limits and parking requirements.

Operating an STR without a valid business license in Tofino can result in significant penalties. Owners may face fines of up to $1,000 per day for each offense. The District also has the authority to suspend or cancel an STR business license for repeated violations or failure to comply with regulations.

The District of Tofino actively monitors STR listings and investigates complaints to identify unlicensed properties. By obtaining the proper licensing and adhering to the regulations, STR operators can avoid costly fines and contribute positively to Tofino's tourism economy while being good neighbors.

In summary, to legally run an STR in Tofino, owners must apply for a business license from the District, submit the required documents and fee, and ensure their property complies with zoning and other regulations. Failure to do so can result in substantial penalties. By following the official licensing requirements, STR operators can provide a safe, compliant experience for their guests and the community.

Required Documents for Tofino Short-Term Rentals

To obtain a short-term rental (STR) business license in Tofino, property owners must submit several documents to the District of Tofino. These requirements are outlined in the District's Business Licence Regulation Bylaw and on their official website. Here's a breakdown of each required document and its purpose:

1. Short-Term Rental Business License Application form
   Purpose: Collects essential information about the property, owner, and local contact person
   Where to get it: Available on the District of Tofino website or at the Municipal Hall
2. Proof of ownership
   Purpose: Demonstrates that the applicant is the legal owner of the STR property
   Where to get it: Obtain a property title or land registry document from the Land Title and Survey Authority of British Columbia
3. Floor plan of the property
   Purpose: Shows the layout of the STR, including room dimensions and locations of safety features like smoke alarms and fire extinguishers
   Where to get it: Create a detailed floor plan or hire a professional to draft one
4. Proof of insurance
   Purpose: Ensures the STR has adequate commercial general liability coverage (minimum $2 million) to protect guests and the property
   Where to get it: Purchase insurance from a licensed provider and obtain a certificate of insurance
5. 24/7 contact information
   Purpose: Provides a way for the District and guests to reach the owner or a local representative at all times in case of issues or emergencies
   Where to get it: Designate a local contact person and provide their name, address, and phone number on the application form
6. Parking plan
   Purpose: Demonstrates that the STR has the required number of off-street parking spaces for guests, as outlined in the District's Zoning Bylaw
   Where to get it: Create a site plan showing the location and dimensions of parking spaces, or provide photographs of the parking area
7. Good Neighbour Agreement
   Purpose: Ensures STR owners are aware of and agree to follow the District's regulations on noise, parking, garbage, and other neighborhood impacts
   Where to get it: Download the agreement from the District's website, review and sign it, and submit with the application

In addition to these documents, STR business license applicants must also pay an annual fee based on the number of bedrooms in the rental unit. The fees range from $450 for a one-bedroom unit to $1,050 for a three-bedroom unit.

By compiling these required documents and submitting a complete application, Tofino property owners demonstrate their commitment to operating a safe, compliant STR. The District's licensing process aims to balance the benefits of short-term rentals with the need to protect neighborhood character and housing availability.

It's crucial for STR operators to review the District of Tofino's Business Licence Regulation Bylaw and website for the most up-to-date information on required documents. Consulting with a local lawyer or property manager can also help ensure a smooth licensing process and ongoing compliance.

Tofino Short-Term Rental Taxes

As a short-term rental operator in Tofino, it's essential to understand the various taxes that apply to your business. Failing to comply with tax regulations can result in penalties and legal issues. Here's a breakdown of the key taxes you need to be aware of:

Goods and Services Tax (GST)

Short-term rental income is subject to the federal Goods and Services Tax (GST) in Canada. The current GST rate is 5%. As an STR operator, you must register for a GST account with the Canada Revenue Agency (CRA) if your annual revenue exceeds $30,000.

Once registered, you'll need to charge GST on your rental fees and remit the collected taxes to the CRA on a regular basis (usually quarterly). You can also claim input tax credits for eligible business expenses.

Provincial Sales Tax (PST)

In British Columbia, short-term rentals are subject to the Provincial Sales Tax (PST) of 8% on accommodations. As an STR operator, you must register to collect PST if you provide accommodation in B.C., unless you qualify for an exemption.

You'll need to charge PST on your rental fees and remit the collected taxes to the B.C. Ministry of Finance on a regular basis (usually monthly or quarterly). Failure to register, collect, or remit PST can result in penalties and interest.

Municipal and Regional District Tax (MRDT)

Tofino, like many other tourism-focused communities in B.C., imposes a Municipal and Regional District Tax (MRDT) on short-term accommodations. The MRDT rate in Tofino is 3% and is used to fund tourism marketing and development initiatives.

As an STR operator, you must register for the MRDT program through the B.C. Ministry of Finance and collect the tax from your guests. The collected MRDT must be remitted to the ministry on a monthly basis.

Income Tax

In addition to the above taxes, STR income is also subject to federal and provincial income tax. As an STR operator, you must report your rental income on your annual income tax return. You can deduct eligible expenses related to your STR business, such as:

1. Mortgage interest
2. Property taxes
3. Insurance
4. Utilities
5. Repairs and maintenance
6. Advertising and platform fees
7. Cleaning and supplies

It's important to keep accurate records of all your STR income and expenses to ensure proper tax reporting and compliance. Consider working with a tax professional familiar with short-term rentals to optimize your deductions and minimize your tax liability.

By understanding and properly managing the taxes associated with your Tofino short-term rental, you can avoid costly mistakes and operate your business with confidence. Stay informed about any changes to tax laws and regulations, and don't hesitate to seek professional advice when needed.

Vancouver Wide Short-Term Rental Rules

While the new provincial short-term rental regulations will impact hosts across British Columbia, it's important to note that some municipalities, like the City of Vancouver, have implemented their own additional rules and requirements for short-term rentals.

In Vancouver, short-term rental operators must adhere to the following city-wide regulations:

1. Licensing Requirement: All short-term rental operators in Vancouver must obtain a $51 business license from the city and a $250 short-term rental permit. This is in addition to any provincial licensing or registration required under the new provincial rules.
2. Principal Residence Requirement: Similar to the new provincial regulations, Vancouver only allows short-term rentals in an operator's principal residence. However, Vancouver's rules go further by prohibiting short-term rentals in secondary suites, laneway homes, or other accessory dwelling units on the same property.
3. Total Unit Cap: Vancouver has capped the total number of permitted short-term rental units at 870, which is approximately 1% of the city's total housing stock. Once this cap is reached, no new permits will be issued.
4. Zoning Restrictions: Short-term rentals are only permitted in certain residential, commercial, and mixed-use zones in Vancouver. They are prohibited in areas zoned for industrial use or in properties that have received multi-family tax exemptions.
5. 3-Strike Policy: Vancouver operates a 3-strike enforcement system for short-term rental violations. Operators can have their permit revoked after 3 violations related to issues like noise, parking, garbage, etc.
6. Data Sharing: Short-term rental platforms like Airbnb and Vrbo must share quarterly data on Vancouver listings with the city to aid enforcement efforts.

These Vancouver-specific regulations are in addition to the new provincial rules taking effect on May 1st. Hosts operating short-term rentals in Vancouver must ensure compliance with both the city and provincial requirements.

For Tofino hosts specifically, while the town opted into the new provincial principal residence rules, they will still need to follow any existing local bylaws and regulations around short-term rentals as well.

As the regulatory landscape continues to evolve, it's crucial for short-term rental operators across British Columbia to stay informed about the applicable municipal and provincial rules in their area. Working with local authorities and hosting platforms can help ensure continued compliance.

Does Tofino Strictly Enforce STR Rules?

Based on discussions on forums like Bigger Pockets and Reddit, it appears that Tofino has been relatively strict in enforcing its short-term rental (STR) rules compared to some other cities in British Columbia. While some hosts may still operate outside the regulations, the general consensus is that Tofino takes an active approach to cracking down on illegal STRs.

On a Bigger Pockets thread about STR regulations in BC, one user commented about Tofino: "They've really tightened up enforcement over the last few years. The city hired a full-time inspector just to go after unlicensed rentals. I know several operators who got hit with massive fines for not following the rules."

Another Bigger Pockets user shared a similar perspective: "Tofino is definitely not an Airbnb-friendly city if you're looking to run an investment property. Their bylaws require the owner to live on-site, and they will come after you if you're caught breaking those rules. I had friends get shut down and fined thousands."

On Reddit, the strict enforcement of Tofino's STR regulations was also a common theme. One Redditor stated, "Tofino has been cracking down hard on illegal rentals lately. They're clearly prioritizing long-term housing over vacation rentals operated by non-resident owners."

Another Reddit comment highlighted the potential consequences, saying "I know someone who got slapped with a $50k fine from Tofino for running an Airbnb without the proper permits and licenses. They do NOT mess around there."

While some hosts suggested that Tofino's enforcement may have been lax in the past, the overall sentiment is that the city has significantly ramped up efforts in recent years. This aligns with Tofino's decision to opt-in to BC's new principal residence requirements for STRs, further restricting the ability to operate vacation rentals.

One Redditor summed it up: "Tofino used to be a bit of a wild west for Airbnb, but those days are long gone. Between the licensing requirements, on-site inspections, and now the provincial rules, they've made it very clear that unauthorized STRs won't be tolerated. It's about as un-Airbnb friendly as it gets in BC these days."

So, while some hosts may still try to fly under the radar, the consensus from experienced operators is that Tofino is decidedly not an Airbnb-friendly city. The combination of strict local bylaws and stepped-up enforcement efforts, coupled with opting-in to the new provincial regulations, has made operating an unlicensed or non-compliant STR in Tofino an increasingly risky proposition.

How to Start a Short-Term Rental Business in Tofino

With Tofino's decision to opt-in to British Columbia's new short-term rental restrictions, starting an STR business in this coastal town will require carefully navigating the evolving regulatory landscape. Here's a step-by-step guide to help you get started:

1. Understand the new provincial rules: Review the key provisions of BC's new STR regulations, which take effect on November 1, 2024 in Tofino. Familiarize yourself with the principal residence requirement, which limits STRs to a host's primary home plus one additional unit on the same property. Note that investment properties and secondary residences can no longer be used as STRs under these rules.
2. Ensure zoning compliance: Verify that your property is located in a zone that permits short-term rentals according to Tofino's zoning bylaws. Review occupancy limits, parking requirements, and any other zoning restrictions that may apply to your STR. If necessary, apply for any required zoning permits or variances from the District of Tofino.
3. Obtain an STR business license: Apply for a short-term rental business license from the District of Tofino by submitting the required documents and fees. Gather documents like proof of ownership, floor plans, insurance certificates, and parking plans. Be prepared to pay an annual license fee ranging from $450 to $1,050 based on the number of bedrooms.
4. Register for taxes: Register for a GST/HST account with the Canada Revenue Agency to collect and remit federal sales taxes. Register with the BC Ministry of Finance to collect and remit the 8% Provincial Sales Tax (PST) and 3% Municipal and Regional District Tax (MRDT). Ensure you understand income tax obligations for reporting your STR income.
5. Prepare your property: Outfit your rental unit with all required safety equipment like smoke alarms, fire extinguishers, and carbon monoxide detectors. Furnish and decorate the space to provide a comfortable, appealing experience for guests. Develop a set of house rules and guest instructions to set expectations and ensure smooth operations.
6. Market your listing: Create compelling listings on popular STR platforms like Airbnb and Vrbo, highlighting your property's unique features and amenities. Use professional photography and detailed descriptions to make your listing stand out. Implement a strategic pricing strategy based on seasonality, demand, and competitor rates.
7. Establish operations and compliance: Implement systems for guest communication, cleaning, maintenance, and key exchanges. Keep meticulous records of all bookings, income, expenses, and tax remittances for compliance purposes. Stay up-to-date on any changes to local or provincial STR regulations that may impact your business.

Starting a short-term rental in Tofino's increasingly regulated environment will require diligent preparation and commitment to compliance. However, by understanding the rules, obtaining proper licensing, and providing a high-quality guest experience, responsible STR operators can still find success in this highly desirable travel destination.

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

If you have questions or need assistance regarding short-term rental regulations and zoning in Tofino, there are several official contacts and resources available:

District of Tofino Planning and Building Department: For inquiries related to zoning, permitted uses, and development requirements for short-term rentals, contact the Planning Department at 250-725-3229 or planning@tofino.ca.

District of Tofino Business Licensing: To apply for a short-term rental business license or get clarification on licensing requirements, reach out to the Business Licensing team at 250-725-3229 or businesslicence@tofino.ca.

District of Tofino Website - Short-Term Rental Information: The District maintains a dedicated webpage with comprehensive details on STR regulations, application forms, and FAQs at https://tofino.ca/short-term-rentals.

In addition to these official District contacts, Tofino short-term rental hosts may find it beneficial to connect with local host communities and associations for support and insights:

Tofino Short-Term Rental Operators Association: This non-profit association represents the interests of responsible STR operators in Tofino. Learn more and join us at https://tofinostra.ca or email info@tofinostra.ca.

Vancouver Island Short-Term Rental Alliance: While not Tofino-specific, this regional group provides resources, advocacy, and networking for STR hosts across Vancouver Island. Visit https://vistra.ca for more information.

Tofino Hosts Facebook Group: This private Facebook group serves as a forum for Tofino Airbnb and vacation rental hosts to connect, ask questions, and share local knowledge. Request to join at https://www.facebook.com/groups/tofinoairbnbhosts.

Reddit r/TofinoBC Subreddit: While not exclusively for hosts, the local Tofino subreddit occasionally features discussions and advice related to short-term rentals in the area.

By engaging with these official District contacts as well as connecting with the local hosting community, short-term rental operators in Tofino can stay informed about the latest regulations, zoning requirements, and best practices. Proactive communication and networking can help navigate the complexities of operating a compliant STR business in this popular coastal destination.

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

To gauge the sentiments of Tofino Airbnb hosts regarding local short-term rental regulations, I searched through relevant discussions on Reddit, Bigger Pockets, and other online forums. Here are some notable insights from real host experiences:

Reddit - r/tofino - "Short term occupancy bylaws?"

In this thread from October 2022, a prospective visitor expressed frustration with Tofino's bylaw limiting short-term rentals to a maximum of 6 people, regardless of age. They noted it made finding accommodation for their group of 6 adults and 2 infants difficult. One commenter replied:

"Yeah we ran into this and we were surprised this summer. I find it counterintuitive as well and wonder if many locations run more of a 'don't ask, don't tell' policy...Check out rentals in Ucluelet. They don't have the same rules for the amount of people."

Bigger Pockets - "Tofino Short Term Rental Regulations"

On this forum thread, an experienced host shared their perspective on Tofino's evolving regulations:

"Tofino has really tightened up enforcement over the last few years. The city hired a full-time inspector just to go after unlicensed rentals. I know several operators who got hit with massive fines for not following the rules. Tofino is definitely not an Airbnb-friendly city if you're looking to run an investment property."

Facebook - Tofino Short-Term Rental Operators Group

In this private Facebook group for local hosts, one member expressed concerns about the potential impact of opting into the new provincial regulations:

"If Tofino opts in to the principal residence requirement, it could really hurt a lot of us who have invested in properties specifically for short-term rentals. I'm worried about having to sell or convert to long-term rentals, which may not even be feasible given the unique layouts of some of these units."

AirbnbHell.com - "Tofino Cracking Down on Illegal Rentals"

On this site dedicated to highlighting short-term rental issues, a Tofino resident shared their perspective:

"It's about time Tofino got serious about enforcing their bylaws. Short-term rentals have been out of control here, with absentee owners operating mini-hotels in residential neighborhoods. The new provincial rules could help rein that in and preserve some housing for locals."

Overall, these discussions suggest a range of opinions among Tofino hosts. While some appreciate the need for regulation to address housing concerns, others worry about the financial impact on their investments and businesses. Enforcement also seems to be a common theme, with hosts acknowledging Tofino's increasingly strict approach in recent years. As the regulatory landscape continues to evolve, the local host community will likely continue to debate the pros and cons of various policies.

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.