What you need to know about the benefits and risks of running an

Since its establishment in 2008, Airbnb has used a sharing model to closely connect travelers with hosts around the world, becoming a dark horse in the emerging technology field and a rising star in the current travel industry. Cheaper prices compared to hotels and hotels, more down-to-earth layout, more home-like environment, and increased use of space created by the sharing concept have made Airbnb's army continue to grow. More and more people hope to rent their houses short-term, because this brings more benefits than long-term renting. Many people think this is “easy money”. Is this really true?

In the moment, useAirbnb accommodation has become a fashionable choice for travel around the world. In Toronto, the number of properties operating Airbnb has increased by 288% in five years. A report shows that 13% of landlords in Toronto control 37% of short-term rental units on Airbnb. The number of short-term rentals tripled between 2014 and 2016, covering 10,800 properties. According to Inside Airbnb, there were more than 17,500 Airbnb listings in Toronto as of August 2018. But at the same time, Airbnb has come under fire from the hotel industry and renter groups around the world.

Currently operating in the City of TorontoAlthough Airbnb is not illegal, in some cases, there are still many problems that may expose the host to legal action. The Toronto city government issued regulatory bylaws to regulate the short-term rental market in 2017, but some Airbnb owners and several related short-term rental operators sued the Ontario Planning Appeal Tribunal (LPAT). The Local Planning Appeal Tribunal (LPAT) is currently waiting for a hearing, so the relevant laws have not really taken effect. In Markham, a city in the Greater Toronto Area, considering the noise, garbage, nuisance, community safety, etc. that may arise from operating short-term rentals, Markham has explicitly prohibited residents in the area from engaging in such rental business.

Two Canadian cities move to regulate short-term rentals

At the end of 2017, the Toronto City Council passed a motion to regulate short-term rentals with a vote from city councilors. To rent out an entire house on short-term rental websites such as Airbnb, you must register with the city and pay an annual fee of 50 yuan. An entire unit can be rented for a maximum of 180 days in a year. Short-term rental platforms require a one-time registration fee of 5,000 yuan, a license fee of one yuan per night, and record keeping of all online property information.

The city government is also rightAirbnb’s regulation has issued recommendations, including that hosts engaged in short-term rentals must go to the city to register and pay fees, only self-occupied properties are allowed to be rented out for short-term rentals, vacant properties cannot be rented out for short-term rentals, and properties with multiple rooms can only rent out a maximum of three rooms.

But soon after, several people engaged inAirbnb owners and related groups believed that such a bylaw decision was unfair, and immediately took the city to the Ontario Planning Appeal Tribunal. The original hearing date was September 2018, but it was not successfully held and was postponed to August 2019. For people who are on the sidelines, it is time to rent out short-term rentals and collect higher returns. There are also many people who are eager to join the ranks of short-term rentals, but are afraid of sudden changes in policy.

BC class charge11% "Exorbitant taxes and miscellaneous taxes"

Right in Toronto for regulationWhile Airbnb was having heated discussions, Vancouver announced relevant information policies for regulating short-term rentals in 2017, which were officially implemented in April 2018. The bylaw requires property owners to purchase an annual business license for $49 and pay a one-time application fee of $54.

In 2018, the British Columbia provincial government also announced that owners and tenants who rent out their homes on Airbnb will be charged an 8% sales tax and a 3% hotel tax, for a total of up to 11% of "exorbitant taxes." The sales tax collected will be used to subsidize the city's affordable housing program. After Vancouver implemented the bylaw in April last year, as many as 400 properties were removed from the Airbnb platform within a month, and most of them were converted to long-term rentals.

The hotel tax will be collected as fiscal revenue at the municipal level to promote the development of the city's tourism industry. Once Toronto’s legislation on short-term rentals is implemented in the future, the commercial tax system will inevitably refer to other cities. Currently, in Toronto, if a property is counted as commercial, it needs to be2.5% -2.7% tax. For ordinary residential buildings, the land tax is around 0.7-1%, which is a big difference. The increase in taxes is a reality that short-term rental owners have to face.

Although there is currently no legislation related to the implementation of short-term rentals in Toronto, if the government decides to enact and implement short-term rental laws similar to those in other provinces and cities, short-term rental owners will most likely face increased taxes from provincial and municipal governments. In the interest of market fairness, many cities that have passed short-term rental bylaws requireHosts on short-term rental platforms such as Airbnb pay travel-related taxes just like hotels.

Condominium property short term rental Compliance is important

differentCondos have different regulations for short-term rental units, and some condo buildings even explicitly stipulate that short-term rentals are not allowed. For condo owners, short-term rentals may be a violation of the contract you agreed to abide by the building bylaws when you originally purchased the property. For security reasons, many condos regulate the entry, exit and stay of residents and guests through locked lobby doors, using key fobs to activate elevators, and requiring tenants to register through the building's front desk.

Allowing strangers using short-term rental platforms to enter these strictly regulatedA condo building will increase the risk of the entire apartment complex. Therefore, the relevant regulations on short-term rentals and long-term rentals are usually listed in the building’s bylaws and bylaws. If a unit owner rents the unit to a stranger, anyone in the building can report it to management. If you are caught violating the bylaws, you may be warned and fined.