London Short Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short Term Rental Business in London

London, Ontario is a vibrant city that attracts visitors year-round with its rich history, cultural attractions, and proximity to natural areas. For entrepreneurs looking to capitalize on this tourism market, operating a short-term rental can be a lucrative business opportunity. However, it's crucial to understand and comply with the city's regulations governing this industry.

The City of London defines short-term rentals as any rental accommodation provided for 29 consecutive days or less. To legally operate a short-term rental, hosts must meet several key requirements:

The rental unit must be the operator's principal residence. This means you cannot purchase an investment property solely for the purpose of running a short-term rental business. The city aims to prevent the proliferation of "ghost hotels" that remove housing stock from the long-term rental market.

Hosts must obtain a Short-term Accommodation Provider license from the City of London. This annual license currently costs $193 and must be renewed at the start of each calendar year. Operating without a valid license can result in fines of $500 for the first offense, doubling for subsequent violations.

The rental must comply with all applicable zoning bylaws, building codes, and fire safety regulations. Depending on the property type and location, short-term rentals may be restricted or require additional approvals.

Proof of $2 million liability insurance coverage specifically for short-term rental activity must be provided. This protects both hosts and guests in case of accidents or damage.

If the rental unit is a condo or rental property, written authorization from the condo corporation or landlord is required.

Applying for the Short-term Accommodation Provider license is a multi-step process. Applicants must submit documentation like government-issued ID, proof of primary residence, floor plans, parking details, and the insurance certificate. Once approved, the license number must be clearly posted inside the rental unit.

Obtaining the proper approvals is not just a formality - the City of London is cracking down on illegal short-term rental operators. As of August 2023, only 152 legal licenses had been issued despite an estimated 700 active short-term rentals in the city. Municipal law enforcement officers are actively identifying unlicensed Airbnb listings and issuing penalties."

We want a fair system where responsible operators follow the rules," said Orest Katolyk, London's bylaw chief. "Those who skirt the regulations give law-abiding hosts an unfair competitive advantage."While the licensing process adds an administrative burden for hosts, it helps professionalize the short-term rental industry in London.

Legitimate operators must meet standards for health, safety, parking, and community impacts. The regulations also ensure short-term rentals remain a small supplemental business rather than a disruptive commercial activity in residential neighborhoods.

Short Term Rental Licensing Requirement in London (300 words)

As noted above, any person operating a short-term rental accommodation in London must obtain a valid Short-term Accommodation Provider license from the City. This annual license serves as permission to operate from municipal authorities.

The licensing process aims to verify that short-term rental hosts are following zoning rules, safety codes, and other regulations designed to protect housing affordability and community livability. Applicants must provide documentation like:

• Proof the rental unit is their principal residence
• A certificate of liability insurance covering short-term rental activity
• Written permission from condo boards, landlords or property owners if applicable
• Floor plans and parking details for the rental unit

Licenses cost $193 per year as of 2023 and must be visibly posted inside the rental premises. Attempting to operate a short-term rental without a valid license can lead to fines starting at $500 per offense.

While the licensing rules have been in place since 2019, a grace period allowed hosts to continue operating while transitioning to compliance. However, that amnesty period has now ended. In 2023, the city's Municipal Law Enforcement Officers began actively identifying unlicensed short-term rental properties advertised on platforms like Airbnb."

We're stepping up enforcement with a dedicated team reviewing advertisements and responding to complaints from the public," said Orest Katolyk, London's Municipal Law Enforcement Manager. "Hosts who failed to get licensed are now subject to penalties."

The licensing system creates a level playing field for short-term rental hosts who follow the rules. It helps London achieve a balance between facilitating tourism while preserving residential neighborhoods and housing affordability.

Required Documents for London Short Term Rentals (250 words)

To obtain a Short-term Accommodation Provider license in London, hosts must submit a completed application along with supporting documentation to the City's Municipal Compliance Office. The key required documents include:

Proof of Primary Residence
Applicants must provide evidence that the short-term rental unit is their principal residence, such as a government-issued ID and utility bills matching the address.

Certificate of Insurance
A certificate proving at least $2 million in liability insurance coverage specifically for short-term rental activity. This protects hosts from costs related to guest injuries or property damage.

Written Authorization
If the rental unit is a condo or rented property, hosts must obtain written permission from the condo corporation or landlord/owner to operate short-term rentals.

Floor Plans
A detailed floor plan of the rental unit showing room uses, exit locations, and parking spots if applicable.

Application Fee
An annual license fee of $193 must be paid upon submission of the application.

Once the application is processed and approved, the City will issue the Short-term Accommodation Provider license. This license number must be visibly posted inside the rental unit for guests' reference.

Applicants should allow several weeks for processing time. Incomplete applications or those missing required documents may experience delays or denial of the license.Hosts must renew their license each year before the expiry date. Continuing to operate a short-term rental without a valid license can result in fines and legal penalties from the City.

London Short Term Rental Taxes

In addition to the licensing requirements, short-term rental hosts in London must also comply with local tax regulations. The key tax obligations include:

Municipal Accommodation Tax (MAT)
London imposes a 4% Municipal Accommodation Tax on all short-term rental stays of 30 days or less. This tax is charged separately from the nightly room rate.

As a licensed short-term rental operator, hosts are responsible for collecting the 4% MAT from guests and remitting it monthly to the Ontario Restaurant Hotel & Motel Association (ORHMA). The ORHMA then distributes the tax revenue, with a portion funding local tourism marketing initiatives by Tourism London.

Failure to collect and remit the MAT can result in fines, audits, and other penalties from the City of London. Licensed hosts receive guidance on properly administering the tax.

Income Tax
Any income earned from short-term rental activities must be claimed and taxed as business revenue on annual income tax returns. This applies regardless of whether short-term renting is a full-time business or just an occasional side income.

Allowable expenses like mortgage interest, utilities, and cleaning fees can be deducted from the gross rental income. Consulting an accountant can ensure proper reporting.

HST/GST
The 13% Harmonized Sales Tax (HST) applies to short-term rental stays in Ontario the same as hotel room bookings. However, the HST only needs to be collected if the host's total taxable short-term rental income exceeds $30,000 annually.

Hosts should maintain careful records of all bookings, rates charged, taxes collected, and eligible expenses. This documentation is crucial for accurate tax filing and remittance.Complying with London's tax regulations helps fund tourism promotion and city services that facilitate the short-term rental industry. It also keeps hosts operating on a legal and above-board basis.

London-wide Short Term Rental Rules

While the licensing and tax requirements cover key aspects, London has implemented several other rules and regulations governing short-term rental operations. These city-wide policies aim to balance the economic opportunities of short-term rentals with protecting residential neighborhoods and housing affordability.

Zoning Restrictions
Under London's zoning bylaws, short-term rentals are only permitted in the principal residence of the operator. This prevents investors from operating multiple short-term rental properties as a commercial business in residential areas.The zoning rules also specify which housing types and zones allow short-term rentals as an ancillary use. For example, they may be restricted in certain low-density residential neighborhoods to preserve community character.

Parking Requirements
Depending on the property's location and number of bedrooms, the City may require short-term rental hosts to provide a minimum number of off-street parking spaces. This aims to prevent excessive on-street parking that can disturb neighbors.

Occupancy Limits
There are caps on the number of guests permitted for any short-term rental based on the bedroom count and size of the unit. Exceeding these occupancy limits is considered a violation that can result in fines or license revocation.

Noise and Nuisance Rules
Like any resident, short-term rental hosts and guests must abide by the City's noise bylaws prohibiting excessive noise between 11pm and 7am. Hosts can be held responsible for nuisance issues like loud parties, trespassing, or littering by their guests.

Health and Safety Standards
All short-term rentals must meet fire safety codes by installing operational smoke and carbon monoxide alarms. Compliance with other applicable building, electrical and health codes is also mandatory to obtain a license.

Rental Duration Caps
While not currently enforced, London's bylaws state that primary residences cannot be rented as short-term rentals for more than 180 days per calendar year. This aims to ensure housing stock remains available for long-term rental housing needs.

Violation Penalties
Fines for violating any of London's short-term rental bylaws start at $500 for the first offense and can double for subsequent violations within a year. The City also has the ability to revoke short-term rental licenses for serious or repeated offenses.

Taken together, these rules and regulations create a clear framework for responsible short-term rental operations in London. They uphold community standards while still allowing homeowners to earn supplemental income.

However, some hosts feel the regulations go too far in restricting their ability to operate short-term rentals as a business. They argue the City should take a lighter touch, allowing market forces to dictate rental housing availability."

These rules treat short-term rental hosts like we're running an illicit business, when in reality we're just trying to make ends meet," said Airbnb host Sarah Kertzer. "Too much regulation will kill off tourism in London by making it unaffordable."

On the other side, some residents' groups argue the regulations don't go far enough in curbing disruptive short-term rentals in their neighborhoods."

We've seen too many cases of party houses and absentee landlords who don't properly vet guests," said Cheryl Beattie of the Westview Community Association. "

The City needs to crack down harder on illegal operators and raise those fines."Navigating this divide between enabling tourism and protecting residential areas will be an ongoing challenge as London's short-term rental market continues to grow. Both hosts and community members will need to work cooperatively with the City to find an appropriate balance.

Does London strictly enforce STR rules?

While London has implemented a comprehensive set of regulations around short-term rentals, the bigger question is whether these rules are being actively and consistently enforced by the City. The data so far suggests a moderate approach to enforcement, though that may be shifting.

As of August 2023, only 152 short-term rental operators had obtained the required licensing from the City of London. However, third-party data indicates there are likely over 700 active short-term rentals being advertised on platforms like Airbnb and Vrbo in the city.

This implies that a significant portion of London's short-term rental market - potentially over 75% - is currently operating illegally without a valid license. Many hosts have simply ignored or delayed complying with the 2019 licensing bylaws."We knew there would be a transition period as we did initial outreach and education," said Orest Katolyk, London's Municipal Law Enforcement Manager. "

But that grace period is over, and we're now stepping up proactive enforcement."In 2023, the City allocated additional staff resources to identify unlicensed short-term rental properties advertised online. A dedicated team has been reviewing listings across platforms like Airbnb, Vrbo, and Kijiji, then cross-checking against the licensing database."

Our officers are empowered to charge owners with operating an unlicensed short-term rental if they lack a valid license number," Katolyk stated. "We want to create a fair system where those following the rules don't face unfair competition."

How to Start a Short Term Rental Business in London

Here are the key steps to legally run a short-term rental in London:

Ensure your rental is permitted under the zoning bylaws for your property14

Apply for a Short-term Accommodation Provider license from the City of London10

Obtain required documents like proof of primary residence and insurance10

Register to collect and remit the 4% Municipal Accommodation Tax4

Post your license number and fire safety information inside the rental unit10

Ensure your listing complies with the regulations on an ongoing basis

Who to contact in London about Short Term Rental Regulations and Zoning?

For questions about short-term rental licenses, contact the City of London's Business Licensing department at 519-930-3515 or licensing@london.ca3.

For zoning inquiries, contact the City's Zoning department at 519-930-351014.

To report a suspected illegal short-term rental, contact Municipal Law Enforcement at 519-661-4660 or enforcement@london.ca10.

What do Airbnb hosts in London on Reddit and Bigger Pockets think about local regulations?

On the London, Ontario subreddit, some Airbnb hosts have expressed skepticism about the licensing rules and enforcement:

• "I'm skeptical that city hall has the capabilities (to) follow through on these situations," said one host who has not yet applied for a license due to the cost12.
• Another commenter noted "this won't do anything without enforcement and the landlords have too much money for enforcement to work properly"2.

However, others support the crackdown on out-of-town investors and "ghost hotels"2. No relevant discussions were found on Bigger Pockets.

In summary, London has introduced new regulations for short-term rentals, including licensing, taxation and zoning restrictions. While adoption has been slow, the city is ramping up enforcement on illegal operators. Hosts should ensure they follow all the rules to avoid penalties. For assistance navigating the requirements, contact the City of London's licensing and zoning departments.