Toronto Short-Term Rental Rules and the 6 Percent MAT

Toronto lets you rent short term only in the home you live in, only after registering with the city, and only for 180 nights a year if you rent the whole place. The Municipal Accommodation Tax on those nights is 6 percent for stays from August 1, 2026, after a temporary 8.5 percent rate that ran from June 1, 2025.

The rules, in the order they stop you

1. Principal residence only. A second property, an investment condo, or a basement in a house you do not live in cannot be a short-term rental in Toronto.
2. Register with the city before listing. The fee is 390 dollars a year. The registration number goes on every listing, and platforms remove listings that lack one.
3. Entire-home rentals are capped at 180 nights per calendar year. Renting a room while you are home has no cap.
4. Renew the registration every year and keep the records the city asks for.
5. Collect the Municipal Accommodation Tax and remit it, unless the platform does it for you.

Counting the 180 nights

A short-term rental in Toronto means a stay under 28 consecutive nights. Anything longer is outside both the rules and the tax. The cap is per calendar year and per address, and it counts nights the whole unit was rented. A two-night booking is two nights. A guest who books the whole home for three weeks uses twenty-one of them. Rooms rented while you are present do not count, which is why some hosts split the year: entire-home in summer, a room the rest of the time.

Keep a running count in the tracker. The city can ask for it, and the platforms report nights to the city. A host who goes over discovers it when the registration is refused at renewal, or earlier.

The Municipal Accommodation Tax

The rate is 6 percent of the nightly charge. Airbnb collects and remits it for Toronto hosts under an agreement with the city, on the listing price plus the cleaning fee. Vrbo does not, so a Vrbo host collects and remits it. If you take direct bookings, the tax is yours to collect and remit, and it belongs on the receipt as its own line. Every operator files a MAT report with the city each quarter, within 30 days of quarter end. That includes a quarter with no bookings, and a quarter where Airbnb collected everything. An HST-registered host charges HST on the MAT as well. The GST/HST article explains when that federal line starts.

The rate has moved three times since 2023: from 4 percent to 6 in May 2023, up to 8.5 in June 2025, and back to 6 in August 2026. The Registry, Permit and Tax Tracker has a column for the date you last checked it. Fill it in each filing.

Carbon monoxide alarms

Ontario's Fire Code has required carbon monoxide alarms since 2014 in any home with a fuel-burning appliance, a fireplace, or an attached garage, and in condo units beside a service room or garage. Since January 1, 2026 an alarm has to be on every storey, and one outside the bedrooms is no longer enough. Toronto makes you declare Fire Code compliance when you register. Put a CO alarm on every storey and outside every sleeping area whatever your heating is, test them at every turnover, and log it. A cleaner with a checklist line for it is the easiest way to prove it happened.

Outside Toronto

Ontario municipalities license short-term rentals individually. Ottawa, Niagara, Prince Edward County, Blue Mountains and the Muskoka townships all run their own schemes with their own caps and fees. Ask your municipality in writing before you list. A dated written answer is your best protection when a rule changes, and rules in cottage country change every council term.

What to keep on file

• The registration confirmation and the renewal date.
• Proof of principal residence: a driver's licence or tax documents at the address.
• The night count for the year, updated at each booking.
• MAT returns, filed and paid, or the platform's statement that it remitted.
• The alarm test log from the turnover checklist.
• Insurance that names paying guests.

The federal rule that follows

Since January 1, 2024, the Income Tax Act denies every expense on a short-term rental that does not comply with municipal licensing and zoning. An unregistered Toronto rental cannot deduct anything. A registered one that went over 180 nights is in the same position for the year. BC and Quebec hosts face the same federal rule with different local schemes; the BC registry article covers the province with the largest one.

A quick check before the season

• Registration number current and shown on every listing.
• Night count for the year written down and under 180.
• MAT collection confirmed per platform, and set up for direct bookings.
• CO alarm and smoke alarms tested and logged.
• GST/HST threshold checked in the tracker.

Checked against the City of Toronto and its by-laws on September 2, 2026. The MAT rate has changed three times since 2023. Re-check it before each quarterly filing, and see Hosting in Canada for the federal and provincial rules alongside the city's.