What you need to know about buying a short-term rental in Victoria?

We have often asked us about the possibility of buying an investment property in Greater Victoria to use for short term rentals, such as Airbnb or VRBO, or whether it is legal to operate a short-term rental one out of a property in which you currently live.

A short-term rental in British Columbia can be defined as either an entire house or condo, or a room within that home that is rented for less that 30 consecutive days at a time.

Greater Victoria is made up of 14 separate municipalities / electoral areas of North Saanich, Sidney, Central Saanich, Juan de Fuca EA, Highlands, View Royal, Saanich, Langford, Coalwood, Esquimalt, Victoria, Oak Bay, Sooke and Metchosin.

Each municipality has its own bylaws around residential zoning use.  Many of Greater Victoria’s municipalities have passed specific bylaws pertaining to short term rentals. Some allow short- term rentals and some do not. It is important to understand the bylaws prior to operating a short-term rental as fines can be hefty.  For example, the City of Victoria can fine $250 a day for advertising a short-term rental without a license.

Short-term rentals in the city of Victoria are some of the most popular because of Victoria’s tourist industry and its close proximity to the Inner Harbour and other attractions.

Here are some common answers to questions we receive about Short-Term Rentals in the City of Victoria

Q. If I buy a condo in Victoria can I rent it out on a short-term basis if I don’t intend to live there?

A. In the city of Victoria there are approximately a dozen condo buildings that are zoned to allow short term rentals. If you own a condo in one of these building, and do not live it but would like to operate it on a short-term rental it is allowed. However, you cannot do so in other buildings in the Municipality of Victoria. It is important to note that changes to the Zoning Bylaw now prohibit short-term rentals in residential units where ‘transient accommodation’ was a permitted use in zoning. However, properties may be considered legally non-conforming under this use if they have been operating a short-term rental in a transient accommodation zone prior to the zoning changes and comply with strata regulations and operating requirements. If you would like information on which buildings allow short term rentals, please contact us.

Q. Can I rent out the basement suite in my Fairfield home on a short-term basis on Airbnb?

A. the City of Victoria does not allow a “self-contained unit” to be rented out for less than 30 days. The municipality defines a self-contained unit as suite of rooms in a building designed for occupancy of one family which has a separate entrance, and kitchen and bathroom facilities.

Q. I own and live-in a 2-bedroom condo that is not zoned for short term rentals, however, to offset my mortgage I would like to rent out a room a few times a year on a short-term basis, when I don’t have friends and family visiting. Am I allowed to do this?

A. If the condo is your principal residence the Victoria’s bylaws do permit you to rent out a room for less than 30 days, but you need to apply for a short-term rental business license with the city of Victoria. You will also need ensure that your strata bylaws don’t prohibit this type of use.

Q. I am planning an extended vacation in Europe and want to rent out my single-family home while for a month. Am I allowed to do this?

A. The bylaws that apply to short-term rentals  in Victoria do allow you to rent your entire property if it is your principal residence for a short-term rental only occasionally while the owner is temporarily away.

Q. How much does a short-term rental business license cost in Victoria?

A. The license fee for a short term rental property in Victoria if it is your principal residence is $150 a year. If it is not your principal residence, the annual license fee is $1500.

Q. Do I need to collect and remit GST on a short-term rental?

A. Yes, if you are considering buying a property as a short-term rental or renting an existing property as a short-term rental, there are GST implications. If the daily rental is more than $20, it is necessary to charge and collect GST from renters and report and remit GST to the government. There may also be GST implications when the property is sold. We recommend an accountant should be consulted on these business matters.

Q. What do I need to do to start operating a short-term rental in Victoria?

A. In order to operate a short-term rental in the City of Victoria you must apply for a license. There are also several other requirements to obtaining a license such as providing a letter from the strata corporation (if you live in a condo or townhome) and confirming that short-term rentals are allowed by your strata’s bylaws.

The city of Victoria has an excellent resource for operating a short term rental in Victoria

Q. I was denied a short-term rental business license by the City of Victoria. What can I do?

A. If you are denied a short-term rental business licence and would like to appeal Council’s decision you learn more about the appeal process here.

Q. I do not own a property but rent a basement suite in a house in Victoria. I am planning to be away for a month, can I rent out my suite as a short-term rental?

A. If the suite is a self-contained, you may be legible to rent it out on a short-term basis with the owner’s permission, but you could only do it “occasional basis” when you are away.

Q. Are short-term rentals in Sidney, Saanich or Oak Bay?

As bylaws and zoning change all the time it is important to check with each municipality.  At the time we wrote this article. Sidney’s short-term rental bylaw was similar to Victoria’s, although there is no requirement for a business licence. In the Town of Sidney, a short-term rental must be contained within a dwelling continuously occupied by a permanent resident, which could be either the owner or a tenant. The Sidney short term rental bylaw does not restrict short term rentals in condominiums to any particular building; in order to operate a short-term rental in a condominium building, the building’s bylaws must allow such a rental. If a short-term rental is to be carried out in a secondary suite, that suite must have been issued an occupancy permit (i.e., it must be a legal suite). Unlike the City of Victoria, Sidney does not require a licence for the owner to operate a short-term rental.

Like all other municipalities in Greater Victoria, the largest municipality, which is Saanich, does not have a zoning and bylaw permitting short term rentals in residential zones. Rather, short term rentals are prohibited by omission. The permitted uses for each type of property are set out in the Saanich zoning bylaw and none of the residential zones have short term rental as a permitted use.

In Oak Bay zoning and bylaws are prohibited in the municipality.

Whether you are thinking of offsetting your current mortgage with short-term rental income or want to invest in a property as a short-term rental it is important to understand the municipal zoning and bylaws that may affect your decision.  If you are thinking about buying a short-term rental,  contact us with your questions.