With the growing popularity of Airbnb, several homeowners have considered generating passive income from their property, or even purchasing a rental property with the sole intention of listing it on Airbnb.
TL;DR; Airbnb is legal in Quebec, but certain restrictions may apply. It is important for hosts to check with their condo associations and zoning laws before listing their property on Airbnb.
Before you calculate Airbnb revenues into your financial budget, it is important to fully understand the legalities surrounding short term rentals in your city, building, and neighborhood. Penalties of up to C$ 50,000 can be given in the case of non-conformity to short-term rental regulations.
The following article lists the bylaws for short term Airbnb rentals in Montreal and in the province of Quebec.
Regulations in the province of Quebec
Airbnb is legal in the province of Quebec, but homeowners are subject to certain restrictions.
When renting a rental property in Quebec that is not your primary residence, Airbnb hosts are required to apply for a certification of classification.
The requirements for a certification of classification include:
- An inspection done by the CITQ classifier, who will determine the cleanliness, safety and quality of your rental offering.
- C$ 2 million liability insurance.
Regulations in Montreal
Homeowners and investors renting their Airbnb property in Montreal must (additionally) look into:
- Business Licensing. A permit or certificate is required for certain types of businesses in Montreal. You should review these requirements to determine if they apply to your activity. Further information on permits and certificates for businesses in each borough is available here.
- Zoning Laws. Regulations on zoning in a municipality in the province of Quebec may apply to your listing. In the case of Montreal, the Master Plan explains the city’s planning and development vision, including land use and building density policies in Part 1, Chapter 3.1. In Part II, the Master Plan contains information for individual boroughs, including land use designation. Zoning and other urban planning by-laws for the city of Montreal are available here.
- Rent Control. In Quebec, rent increases may be subject to the rent control system administered by the Quebec Régie du logement pursuant to standards set out in the Regulation Respecting the Criteria for the Fixing of Rent. You should review these standards carefully if you plan to collect or adjust rent. More information is available here.
- Taxes. Under An Act respecting the Québec sales tax, a tax on lodging applies each time an accommodation unit is rented for more than six hours and up to 31 consecutive days in most tourism regions in Quebec, including Montreal, as explained here. The province of Quebec and the municipalities collect various other taxes that may apply to residents renting out accommodation units. More information on taxes is available here (provincial administration) and, for the Montreal, here(municipal).
- Other rules. It is also important to understand and abide by other contracts or rules that bind you, such as leases, condo board or co-op rules, HOA rules, or rules established by tenant organizations. Please read your lease agreement and check with your landlord if applicable.
In Montreal, Airbnb automatically collects lodging tax and remits it to Revenu Québec.
Income tax applies to all rentals including passive Airbnb income.
How to ensure Airbnb is permitted in your building or borough
Other than city laws, there may be local restriction such as condo board or co-op rules, HOA rules, or rules established by specific boroughs.
For example, Airbnb rentals are restricted in some parts of the Ville Marie (Downtown) borough.
Condo owners should check the bylaws in their declaration of co-ownership documents before listing their property on Airbnb.
Homeowner’s insurance covers the activities of the homeowner themselves, with liability coverage for their guests and family. But when a guest becomes a paying guest, your insurance policy must be changed accordingly. Once you start charging for access to your property, you are considered to fall under a different risk bracket and will be advised to switch to a business insurance category.