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Vaughan Short Term Rental Regulation: A Guide For Airbnb Hosts

Vaughan , Canada

Starting a Short Term Rental Business in Vaughan

The City of Vaughan began allowing short term rentals in residential homes - that is, the homeowner's or tenant's principal residence - as of January 1, 2020, provided the owner acquires a Short Term Rental License from the city. Short term rentals are generally understood to be when individuals rent out their residence, or part of their residence, for short periods of time (not more than 29 consecutive nights) in exchange for a fee234.

Vaughan implemented these regulations to address emerging issues around short term rentals and protect the public interest by establishing policies that support health, safety, quality of life and well-being of residents. As one of the fastest growing cities in Canada, Vaughan aims to innovate its regulatory approach to ensure it remains relevant to today's social and economic environment, which has seen the rise of sharing economy business models like Airbnb that have disrupted traditional markets2.

Based on 2016 Statistics Canada data, it's estimated that approximately 400 out of the total 94,217 households in Vaughan are likely hosting short term rentals at any given time, though this number fluctuates seasonally with higher demand in the summer months. The strongest demand tends to be in the downtown core due to proximity to restaurants, activities and sites, but hosts in other neighborhoods can also experience strong occupancy by offering a hotel alternative in areas with fewer traditional accommodations4.

Short Term Rental Licensing Requirement in Vaughan

According to Vaughan's Short Term Rental Licensing By-law 158-201926:

  • Homeowners or tenants/lessees who operate short term rentals are considered "owners"
  • Businesses such as Airbnb and Expedia that provide a service for individuals to advertise and book short term rentals are considered "brokerages"
  • Both owners and brokerages are required to obtain a Short Term Rental License from the City of Vaughan in order to legally operate

Owners must be a permanent resident of Canada, have the permission of the property owner if they are a tenant, and pass a Vulnerable Sector Check. The property must be the owner or tenant's principal residence. If located in a condo or townhouse complex, a letter of permission from the condo board is also required6.

Required Documents for Vaughan Short Term Rentals

To apply for a Short Term Rental License, owners must submit367:

  • Completed Short Term Rental License Application Form
  • Canadian government-issued photo ID for all owners and tenants proving they are 18+
  • Proof of principal residency and property ownership/tenancy
  • Letter of authorization from property owner if applicant is a tenant
  • Letter of authorization from condo/townhouse board if applicable
  • Vulnerable Sector Check issued within last 90 days for all owners and tenants
  • Proof of valid home liability insurance of at least $2 million
  • Applicable license fee

Application forms and user guides are available online or at the Service Vaughan counter at Vaughan City Hall. Completed applications can be submitted via an online portal, by mail, using a drop-box at City Hall, or by email along with scanned copies of required documents6.

Vaughan Short Term Rental Taxes

Effective April 1, 2020, all short term rental stays in Vaughan are subject to a Municipal Accommodation Tax (MAT) of 4%. Owners and brokerages must obtain a MAT registration number from the city in order to get a Short Term Rental License13.

Owners who operate without a brokerage like Airbnb must collect the 4% MAT from guests and remit it to the City of Vaughan themselves. The MAT must be itemized separately on the bill135.

Vaughan-wide Short Term Rental Rules

Once licensed, short term rental owners in Vaughan must adhere to the following key rules356:

  • Visibly display the Short Term Rental License near the main entrance of the rental unit
  • Ensure the unit complies with Ontario Building Code and Fire Code occupancy limits
  • Install working smoke alarms on every floor and outside sleeping areas
  • Install working carbon monoxide alarms near sleeping areas if the home has fuel-burning appliances, a fireplace or attached garage
  • Report any changes to the information provided on the license application to the city within 7 days
  • Collect the 4% Municipal Accommodation Tax and remit it to the city if operating without a brokerage
  • Renew the Short Term Rental License annually if continuing to operate

Failure to comply with the regulations can result in penalties ranging from $1,000 to $100,000 depending on the severity and community impact of the violation5. Owners must also comply with any other applicable rules such as lease agreements, condo board rules, or homeowners' association bylaws4.

Does Vaughan strictly enforce STR rules?

Based on discussions in online forums, it appears the City of Vaughan is taking a strict approach to enforcing its short term rental regulations. Multiple threads on the Vaughan subreddit mention city officials stating that unlicensed Airbnb listings are operating illegally and the properties will be issued fines4.

Compared to some other cities that may turn a blind eye, Vaughan seems intent on cracking down and forcing hosts to comply with the licensing and tax requirements. The city's website clearly states that short term rentals are only allowed in principal residences that have obtained a license3.

So while some Airbnb hosts in Vaughan may still be flying under the radar for now, the city does not appear very friendly to those openly flouting the rules.

The stiff regulations and enforcement make Vaughan one of the less welcoming places in the Greater Toronto Area for operating a short term rental business currently.

How to Start a Short Term Rental Business in Vaughan

Here are the key steps to legally start a short term rental business in Vaughan367:

  • Confirm eligibility to operate a short term rental from your principal residence in Vaughan. If you are a tenant, obtain written permission from the property owner. If you live in a condo or townhouse, obtain written permission from the condo board.
  • Register for a Municipal Accommodation Tax (MAT) number with the City of Vaughan.
  • Complete the Short Term Rental License Application and gather all required supporting documents, including government-issued ID for all owners/tenants, proof of principal residency and ownership/tenancy, Vulnerable Sector Check for all owners/tenants, proof of $2 million liability insurance, and applicable license fee.
  • Submit the license application to the City of Vaughan either online, by mail, using a drop-box at City Hall, or by email with scanned documents.

Once approved and licensed, follow all city rules for short term rentals, including displaying the license, complying with Building Code and Fire Code, installing smoke and carbon monoxide alarms, reporting any changes to the city within 7 days, and renewing the license annually.

Collect the 4% Municipal Accommodation Tax from guests and remit it to the city if operating without a brokerage like Airbnb. Ensure the tax is itemized separately on bills.

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

For more information about Vaughan's short term rental regulations, you can contact:

By-law and Compliance, Licensing and Permit Services Department
Vaughan City Hall, 2141 Major Mackenzie Dr., Level 100
Vaughan, ON L6A 1T1
Phone: 905-832-2281
Email: bylaw.licensing@vaughan.ca
Website: vaughan.ca/BusinessLicensing
Hours: Monday to Friday, 8:30 am to 4:00 pm, except statutory holidaysThe city's short term rentals webpage at vaughan.ca/shorttermrentals also provides details on the rules, how to apply for a license, and links to application forms and by-laws3.

What do Airbnb hosts in Vaughan on Reddit think about local regulations?

Discussions on the Vaughan subreddit suggest many local Airbnb hosts are frustrated by the strict short term rental regulations the city has implemented.

One host shared their experience applying for a license, which the city granted, only to be told later by officials that Airbnb and other short term rental platforms are not actually allowed to operate in Vaughan at all currently. The properties listed on those sites are doing so illegally and will be fined4.

Another Redditor complained that the licensing process is overly complicated and the city is just trying to "shakedown" Airbnb hosts. They believe the 4% Municipal Accommodation Tax is too high and will drive guests to stay in neighboring cities instead4.

The general sentiment seems to be that Vaughan has taken an aggressive anti-Airbnb stance with burdensome regulations aimed at discouraging short term rentals. While some hosts want to comply and get licensed, they feel the city is purposely making it very difficult to operate legally.

In summary, the City of Vaughan has established a comprehensive and strictly enforced regulatory regime for short term rentals. Hosts are required to obtain a license for their principal residence, pay a 4% accommodation tax, and follow various other rules around occupancy limits, safety requirements, and more.

The city appears to be actively cracking down on unlicensed listings, causing headaches for many Airbnb operators. Prospective hosts should carefully review all the requirements to ensure they can fully comply with Vaughan's short term rental regulations before starting a business.

Reveal your property’s rental profitability

Buy this property and list it on Airbnb.