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

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

Short-term rentals (STRs) like Airbnb and Vrbo have become increasingly popular in Vancouver in recent years. However, the city has put regulations in place to limit the impact of STRs on the long-term rental market and preserve neighborhood character. Here's what you need to know about Vancouver's short-term rental rules.

Starting a Short-Term Rental Business in Vancouver

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

• Have a valid City of Vancouver business license ($50 fee)
• Obtain a short-term rental permit ($250 fee)
• Only rent out your principal residence where you live for at least 6 months of the year
• Notify neighbors by mail before applying for a permit
• Have at least $1 million in liability insurance for the rental property
• Include your permit number on all listings and advertisements

Permitting for short-term rentals in Vancouver began on January 17, 2024, and operators have until February 15, 2024, to apply for a permit. The city estimates there are currently 250-400 short-term rentals operating, most of them illegally due to previous zoning restrictions.

The new regulations allow short-term rentals in residential zones for the first time, but with limitations. Rentals are capped at 870 total units, or 1% of Vancouver's housing stock. Hosts can only rent their primary residence and either a secondary suite or accessory dwelling unit on the property where they live most of the year.

Vancouver's STR rules are part of a 24-month pilot program to assess the impact on long-term rental housing. The city will monitor compliance, effects on rental prices and availability, and gather community feedback to determine if changes are needed after the trial period.

Fines for violating the short-term rental bylaws are steep - up to $1,000 per offense per day for operating without a permit, renting a non-primary residence, or unsafe properties. Repeat offenders could face fines of up to $10,000.

The new regulations have sparked debate. Some hosts argue they provide needed income and serve a niche for relocating families that hotels can't accommodate. However, officials say the 19,000 entire homes rented short-term across BC are competing with long-term renters and taking needed housing off the market.

Despite pushback from platforms like Airbnb, Vancouver is part of a growing trend of cities and provinces enacting STR restrictions modeled after laws in Quebec. The goal is to return more short-term units to the long-term rental market to help ease housing shortages.

So, in summary, Vancouver's new short-term rental regulations mean hosts must obtain permits, pay fees, carry insurance, and limit rentals to their primary residence in most cases. It remains to be seen how effective the rules will be in freeing up long-term housing, but the city aims to strike a balance between allowing STRs and protecting rental stock. Hosts and guests should stay up to date as the policies take effect and may evolve after the pilot period.

Short-Term Rental Licensing Requirement in Vancouver

As of April 19, 2018, anyone operating a short-term rental in Vancouver is required to have a valid business license. The rental must be the operator's primary residence to be eligible for a license. This means they must live there for at least 6 months of the year and use the address for bills, identification, taxes and insurance.

Applicants must provide proof of property ownership or permission from their landlord to operate a short-term rental. For strata properties, the strata bylaws must also permit short-term rentals. Operators need to provide an emergency contact number, get a business license, and include their license number in all online listings and advertising.

The annual license fee was originally $49, then increased to $99 in 2020. In September 2023, Vancouver City Council voted to raise the fee to $1,000 starting in 2024. Councilor Lenny Zhou proposed the steep increase and said the additional revenue would fund more enforcement officers to crack down on illegal short-term rentals.

The city estimates there are currently 2,000 unlicensed short-term rentals operating in Vancouver during a time of record low vacancy rates and high rents for long-term tenants. Failure to comply with the licensing requirements can result in fines of $1,000 per violation and up to $10,000 for repeat offenders.

Some hosts argue the $1,000 fee unfairly targets individuals trying to supplement their income to afford the high cost of housing in Vancouver. However, research shows a link between the prevalence of Airbnb listings in a neighborhood and faster-rising rents. The city aims to strike a balance between allowing some short-term rentals while prioritizing long-term rental stock.

The new $1,000 license fee and provincial regulations expected later in 2024 may reduce the number of short-term rentals in Vancouver. This could put upward pressure on hotel prices, which reached record highs in the summer of 2023. As Vancouver grapples with a housing crisis, the city is using short-term rental regulations as one tool to protect and increase the supply of long-term rentals for residents.

Required Documents for Vancouver Short-Term Rentals

Several documents are required to ensure compliance with the city's regulations for launching and operating a short-term rental in Vancouver, Washington. The following are the key documents and steps necessary to obtain a short-term rental permit in Vancouver:

1. Vancouver Business License: All short-term rental operators in Vancouver must obtain a city business license. The business license cost is $50, and the license number must be included in all online listings and advertising for the short-term rental.
2. Short-Term Rental Permit Application: Operators are required to submit a permit application for their short-term rental property. The permit application process began on January 17, 2024, and can be completed online or in-person. The one-time permit fee is $250.
3. Compliance with City Regulations: It is essential to ensure that the short-term rental property complies with all the regulations and safety standards set by the city. This may include adherence to building codes, zoning requirements, and safety inspections.
4. Liability Insurance: Short-term rental operators must provide proof of liability insurance for the rental property, with coverage of at least $1 million, as required by the Revised Code of Washington (RCW).
5. Neighborhood Notification: Before applying for a short-term rental permit, operators are required to notify their neighbors about their intention to operate a short-term rental. This involves mailing notification letters to property owners abutting or adjacent to the proposed short-term rental location. An affidavit of mailing must be provided as proof of notification.
6. Additional Documentation: Depending on the specific nature of the short-term rental property, additional documents or information may be requested as part of the permit application process. This could include property ownership verification, floor plans, and other relevant details.

Operators are encouraged to review the official city resources and the Vancouver Land Use and Development Code to ensure full compliance with the requirements for operating a short-term rental in Vancouver. By obtaining the necessary documents and adhering to the city's regulations, operators can ensure that their short-term rental business is in full compliance with the law, allowing for a smooth and legal operation within the city of Vancouver.

Vancouver Short-Term Rental Taxes

In addition to obtaining a short-term rental business license and complying with Vancouver's regulations, hosts must also collect and remit applicable taxes on their rentals. Here's a breakdown of the tax obligations for short-term rental operators in Vancouver:

1. Provincial Sales Tax (PST): All short-term accommodations in British Columbia are subject to the 8% Provincial Sales Tax. This applies to rentals of less than 27 consecutive days. Hosts must register to collect PST, charge it on the rental price, and remit it to the provincial government.
2. Municipal and Regional District Tax (MRDT): Vancouver charges a 3% Municipal and Regional District Tax on short-term accommodations. This tax is in addition to the PST and goes towards funding tourism marketing, programs, and projects. Hosts are responsible for collecting the MRDT from guests and remitting it to the city.
3. GST on Short-Term Rentals: The 5% federal Goods and Services Tax (GST) applies to short-term rentals if the host's total taxable revenues exceed $30,000 over four consecutive quarters. Below this threshold, GST registration and collection is optional but recommended. Hosts must collect GST from guests and remit it to the Canada Revenue Agency.
4. Income Tax on Rental Income: Rental income earned through short-term accommodations is taxable and must be reported on the host's income tax return. Hosts can deduct eligible expenses related to the rental, such as a portion of mortgage interest, property taxes, utilities, and maintenance costs. Detailed record-keeping is essential for claiming deductions.

Vancouver short-term rental hosts must understand and comply with all tax obligations to avoid penalties and interest. Failure to collect and remit required taxes can result in significant fines. Hosts should consult with a tax professional to ensure they meet their tax responsibilities and optimize deductions.

Some short-term rental platforms, like Airbnb, have agreements with the City of Vancouver to automatically collect and remit the MRDT and PST on behalf of hosts. However, hosts are still responsible for collecting and remitting taxes for bookings made outside of these platforms.

By properly collecting and remitting short-term rental taxes, Vancouver hosts contribute to the city's tourism industry and ensure a level playing field with traditional accommodation providers. Compliance with tax regulations is key to operating a legal and responsible short-term rental business in Vancouver.

Vancouver-Wide Short-Term Rental Rules

In addition to the licensing requirements and tax obligations, short-term rental operators in Vancouver must adhere to a set of city-wide rules and regulations. These rules are designed to protect the quality of life for residents, preserve the character of neighborhoods, and ensure a fair and safe rental market. Here are the key Vancouver-wide short-term rental rules:

1. Primary Residence Requirement: Short-term rentals are only permitted in the operator's primary residence. This means the operator must live in the unit for at least six months of the year and use the address for bills, identification, taxes, and insurance. Rentals in secondary homes or investment properties are not allowed.
2. Rental Period Limits: Short-term rentals are defined as rentals of less than 30 consecutive days. There is no limit on the number of days an operator can rent out their primary residence per year as long as they meet the primary residence requirement.
3. Number of Guests: The maximum number of guests allowed in a short-term rental is six, regardless of the size of the unit. This limit helps to minimize the impact of short-term rentals on neighboring residents and maintain the residential character of neighborhoods.
4. Safety and Building Code Compliance: Short-term rental units must comply with all applicable building, fire, and safety codes. Operators are responsible for ensuring that their rental is safe and habitable, with working smoke detectors, carbon monoxide detectors, and fire extinguishers.
5. Parking Requirements: Short-term rental operators must provide on-site parking for their guests, as required by the property's zoning. If on-site parking is unavailable, operators must obtain a parking permit from the city for their guests.
6. Noise and Nuisance Regulations: Short-term rental guests are expected to follow the city's noise and nuisance bylaws. Operators are responsible for ensuring that their guests do not disturb neighbors or engage in disruptive behavior. Repeated violations can result in fines or revocation of the short-term rental license.
7. Insurance Requirements: Short-term rental operators must have a minimum of $1 million in liability insurance coverage for their rental property. This insurance must always be valid and in effect while the unit is being rented.
8. Advertising and Listing Requirements: All advertisements and listings for short-term rentals must include the operator's business license number. This helps the city to track and enforce compliance with short-term rental regulations.

By following these Vancouver-wide short-term rental rules, operators can ensure that they are operating legally and responsibly. The city regularly monitors short-term rental listings and conducts inspections to enforce compliance with these regulations. Violations can result in fines, penalties, and the revocation of the short-term rental license. Each operator is responsible for understanding and adhering to these rules to maintain a safe and fair short-term rental market in Vancouver.

Does Vancouver Strictly Enforce STR Rules?

Vancouver has some of the strictest short-term rental regulations in Canada, but enforcement of these rules has been inconsistent at times. The city relies heavily on complaints and self-reporting to identify illegal short-term rentals.

According to discussions on real estate investing forums like Bigger Pockets, many hosts continue to operate short-term rentals in Vancouver without obtaining the required permits and licenses. Some take the risk of skirting the rules because the potential profits outweigh the fines if caught.

One Bigger Pockets member shared, "I've been running an Airbnb in Vancouver for over a year without a license. I'm careful to avoid any guest complaints that could draw attention from the city. So far, it's been worth the risk for my rental income."

Another Vancouver host on the forum said, "The license process is a hassle and the fees cut into profits. I know many other hosts doing the same thing under the radar. It's an open secret that a lot of people are still running illegal short-term rentals here."

However, the city does conduct audits and has issued fines and orders to illegal short-term rental operators. In 2023, Vancouver collected $120,000 in fines from 89 illegal short-term rental prosecutions. However, with thousands of listings, the city lacks the resources to proactively enforce the rules on every suspected case.

Compared to other major cities, Vancouver is less Airbnb-friendly overall due to its restrictive regulations. Cities like Toronto and Montreal have taken a more permissive approach. However, Vancouver's rules are not as tough as places like New York or Santa Monica, which have outright bans in most cases.

Based on forum discussions, it appears that a significant number of Vancouver hosts continue to operate short-term rentals without full compliance. The general consensus is that the city's enforcement has not been aggressive enough to discourage most illegal operators. However, the risk of fines and shutdown orders is real for those caught breaking the rules.

So, in summary, while Vancouver has strict short-term rental regulations on paper, enforcement seems somewhat lax based on the number of hosts who admit to operating illegally. The city is not as welcoming to Airbnb and VRBO as other Canadian destinations. But that hasn't stopped many Vancouver hosts from continuing to offer short-term rentals under the radar to earn income from the high demand. The rewards apparently still outweigh the risks for those skirting the rules.

How to Start a Short-Term Rental Business in Vancouver

If you're interested in starting a short-term rental business in Vancouver, follow these steps to ensure compliance with local regulations and set yourself up for success:

1. Check Eligibility: Verify that your property is eligible for short-term rentals. In Vancouver, you can only operate a short-term rental in your principal residence where you live for at least six months of the year. Secondary suites and laneway houses can only be used if that is where you reside full-time.
2. Obtain Necessary Permits: Apply for a short-term rental business license from the City of Vancouver. As of 2024, the license application fee is $58, with an annual renewal fee of $1,000. Your license number must be displayed on all listings and advertisements.
3. Ensure Safety Compliance: Make sure your property meets all health, safety, and building code requirements. This includes having interconnected smoke alarms, fire extinguishers, and carbon monoxide detectors. Keep records of regular safety inspections.
4. Notify Neighbors: Before applying for a license, mail notification letters to property owners adjacent to and across from your short-term rental. Include a description of your rental, contact information, and the number of bedrooms you'll be renting out. Keep proof of mailing.
5. Obtain Insurance: Short-term rental operators are required to have a minimum of $1 million in liability insurance coverage for the property. Provide proof of valid insurance when applying for your license.
6. Prepare Your Space:Furnish and equip your rental to provide guests a comfortable and inviting experience. Invest in quality linens, kitchenware, and amenities. Add local touches and guidebooks to help guests explore the area.
7. Create Listing:Craft an attractive listing on popular short-term rental platforms like Airbnb and VRBO. Use high-quality photos, write a compelling description, and set competitive rates. Always include your business license number in your listings.
8. Manage Bookings: Establish a system for managing reservations, guest communication, and turnovers. Consider using vacation rental software to automate tasks and streamline operations. Provide clear check-in instructions and house rules.
9. Comply with Tax Obligations: Register to collect and remit the 8% Provincial Sales Tax (PST), 5% Goods and Services Tax (GST) if applicable, and up to 3% Municipal and Regional District Tax (MRDT) on your bookings. Keep detailed records of rental income and expenses.
10. Stay Informed: Regulations for short-term rentals in Vancouver continue to evolve. Stay up-to-date on any changes to licensing requirements, zoning restrictions, or tax obligations. Consider joining local host groups or industry associations to stay informed and network with other operators.

By following these steps and adhering to Vancouver's short-term rental regulations, you can launch a successful and compliant vacation rental business in this popular Canadian destination. Remember to prioritize guest experience, maintain open communication with neighbors and city officials, and adapt to any new requirements to ensure the long-term viability of your short-term rental venture.

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

If you have questions or concerns about short-term rental regulations and zoning in Vancouver, there are several city departments and resources available to assist you:

1. Short-term Rental Licensing Office: For inquiries related to obtaining or renewing a short-term rental business license, contact the City of Vancouver's Short-term Rental Licensing Office. You can reach them by phone at 604-873-7000 or by email at shorttermrentals@vancouver.ca. The office is open Monday to Friday, 8:30 am to 4:30 pm.
2. Development and Building Services: If you have questions about zoning, building codes, or safety requirements for your short-term rental, contact the Development and Building Services department. They can be reached at 604-873-7611 or by email at developmentservices@vancouver.ca. The department is open Monday to Friday, 8:30 am to 4:30 pm.
3. Property Use Complaint Line: To report a suspected illegal short-term rental or a property use violation, call the City of Vancouver's Property Use Complaint Line at 604-873-7000. The line is available 24 hours a day, 7 days a week. You can also submit a complaint online through the VanConnect app or website.
4. 3-1-1 Contact Centre: For general inquiries about city services, including short-term rental regulations, contact the City of Vancouver's 3-1-1 Contact Centre. From within Vancouver, dial 3-1-1. From outside the city, call 604-873-7000. The contact centre is open 7 days a week, 7 am to 10 pm.
5. Online Resources: The City of Vancouver website provides comprehensive information about short-term rental regulations, licensing requirements, and zoning. Visit vancouver.ca/doing-business/short-term-rentals.aspx for details on the rules, application process, and frequently asked questions.
6. Legal Assistance: If you require legal advice or representation related to short-term rental regulations or disputes, consider contacting a local real estate or municipal law attorney. The Law Society of British Columbia provides a lawyer referral service that can connect you with a qualified attorney. Call 604-687-3221 or 1-800-663-1919 for more information.

By contacting the appropriate city departments and utilizing the available resources, you can get the information and support you need to navigate Vancouver's short-term rental regulations and zoning requirements. It's essential to stay informed and seek guidance to ensure your short-term rental business operates in compliance with local laws and bylaws.

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

Airbnb hosts in Vancouver have expressed mixed opinions about the city's short-term rental regulations on online forums like Reddit and Bigger Pockets. Here are a few notable discussions and perspectives:

Reddit - r/vancouver: In a thread titled "New Airbnb regulations in Vancouver," hosts debated the impact of the city's rules. Some argued that the regulations were necessary to protect long-term rental stock, while others felt the rules were overly restrictive and punitive to responsible hosts. One host commented, "I understand the need for some regulation, but the license fees and fines are excessive. It's making it harder for small-scale hosts to operate legally."

Bigger Pockets - Vancouver Real Estate Investment Forum: A discussion titled "Vancouver STR Regulations - Thoughts?" garnered diverse opinions from local hosts. Some expressed frustration with the primary residence requirement, arguing that it limits their ability to invest in multiple short-term rental properties. One host shared, "I had to sell my investment condo because I couldn't use it for Airbnb under the new rules. It's disappointing that the city is so hostile to short-term rentals."

Reddit - r/AirBnB: In a post titled "Navigating Vancouver's Short-Term Rental Rules," a host sought advice on complying with the city's regulations. Responses highlighted the importance of obtaining proper licenses, paying taxes, and communicating with neighbors. One commenter advised, "Make sure you dot all your i's and cross all your t's. The city is cracking down on illegal rentals, so it's not worth the risk of operating under the radar."

Bigger Pockets - Vancouver Landlords Forum: A thread titled "Airbnb vs. Long-Term Rentals in Vancouver" compared the pros and cons of each rental strategy. Some hosts argued that short-term rentals offer higher returns and more flexibility, while others preferred the stability of long-term tenants. One host noted, "With all the regulations and fees, I've found it's easier to stick with long-term rentals. Less hassle and more predictable income."

Reddit - r/VancouverHousing: In a discussion titled "Short-Term Rentals and Housing Affordability," hosts and residents debated the impact of Airbnb on Vancouver's housing market. Some argued that short-term rentals contribute to higher rents and reduced availability for long-term tenants. Others countered that Airbnb provides income opportunities for homeowners and supports tourism. One host shared, "I rely on my Airbnb income to afford my mortgage. Without it, I might have to sell my home."

These forum discussions reveal a range of perspectives among Vancouver Airbnb hosts regarding the city's short-term rental regulations. While some hosts appreciate the need for oversight, others find the rules burdensome and restrictive. Many hosts are grappling with how to adapt their rental strategies to comply with the regulations while still achieving their financial goals. The debates underscore the ongoing challenges of balancing the benefits of short-term rentals with the need to protect housing affordability and neighborhood livability in Vancouver.

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.