Short-term rental rules in Ottawa: what's legal, what isn't

Ottawa's short-term rental rules, plainly explained

The City of Ottawa's Short-Term Rental By-law (By-law No. 2021-104) substantially restricted who can run an Airbnb or VRBO in Ottawa. Many "investment" properties marketed as STR opportunities in 2026 are not actually legal. Here's what is, what isn't, and what to do.

The core rule: principal residence only

Under the by-law, you can only operate a short-term rental in a dwelling unit that is your principal residence. That means:

• The home where you primarily live
• Where you spend most of the year
• Where you're registered for tax, voting, ID purposes

You cannot legally:

• Buy a condo or house specifically to rent short-term while you live elsewhere
• Run Airbnb from your second home in the city
• Operate STR from a rental property you own but don't live in

This single rule eliminates the entire "buy an Ottawa property as Airbnb investment" pitch for most properties in the city.

Who can host

Three categories of hosts are permitted:

1. Homeowners can offer short-term rentals in their principal residence — whole home while they're away, or a room while present.

2. Renters can offer short-term rentals in their principal residence rental unit, unless the lease prohibits it. Most leases do prohibit it.

3. Condo and co-op owners can offer short-term rentals in their principal residence condo unit, unless the condo declaration or by-laws prohibit it. Many Ottawa condo buildings now do prohibit it.

The host permit

To operate legally:

• Apply for a host permit through the City of Ottawa
• $110 fee, valid for 2 years
• Permit number must be displayed on every listing
• Carry at least $1 million in liability insurance specifically covering STR activity
• Comply with the Municipal Accommodation Tax (MAT) of 4% on every booking

One host gets one permit for their principal residence. (Rural cottage exception below.)

The rural cottage exception

If you own a cottage or seasonal property in one of Ottawa's designated rural zones, you can rent it short-term even if it's not your principal residence. This recognizes the traditional cottage rental economy in the rural belt — places like rural Cumberland, Osgoode, West Carleton.

You can hold one principal residence STR permit AND one rural cottage permit.

This is a real exception with real economics, but the property has to be in the right zoning, which the City verifies.

Municipal Accommodation Tax (MAT)

4% on every short-term stay, collected by platforms (Airbnb collects this automatically on Ottawa listings). You don't need to remit separately if booking through a major platform.

Enforcement

The City of Ottawa enforces the by-law through:

• Platform data sharing (Airbnb provides registered listings)
• Complaint-driven investigation
• Fines up to $100,000 for serious or repeat violations (per the by-law's maximum penalty structure)

Enforcement in 2026 has been meaningfully more active than 2022–2023. The City has audited platform listings and issued numerous warning letters and fines.

Condo board prohibitions

Many Ottawa condo buildings have amended declarations or by-laws to prohibit short-term rentals, often defined as stays of less than 30 days. Before buying a condo with STR intent, you need:

• Status certificate review
• Declaration review
• Confirmation in writing that STR is permitted

A surprising number of would-be STR investors miss this and find out post-closing that they cannot list.

The Ontario rental backdrop

Provincial law (Residential Tenancies Act) also matters. A long-term tenant who's been in your unit cannot be evicted to convert to STR without going through proper procedures. Don't try to clear an existing tenant to convert to STR.

What still works in Ottawa STR economics

For homeowners who actually live in their principal residence:

• Rent your home while you travel: legal, profitable if the home is desirable. A nice 3-bed home near ByWard or the Glebe can generate $200–$350/night when you're away.
• Rent a room while present: legal, supplemental income.
• Rural cottage: legal exception, real opportunity.

What doesn't work:

• Pure-investment Ottawa STR property (illegal under principal residence rule)
• Multi-property STR portfolio in Ottawa (limited to one principal + one cottage)
• Condo STR in most newer buildings (declaration prohibitions)

The medium-term workaround

If you want investment property income from a rental in Ottawa but STR doesn't work, the alternatives are:

• Long-term tenancy under RTA rules
• 30-day-plus furnished corporate or executive rentals — these are not "short-term" under the by-law and are legal as long as the unit isn't being marketed for stays under 30 days
• Mid-term insurance/contractor housing — relocation companies and insurance companies need 60-180 day stays

These don't carry the by-law restrictions and can produce meaningful premiums over long-term rent.

My advice

If you're considering an Ottawa property purchase for STR purposes, the answer 95% of the time is: don't. The rules don't allow what you're imagining. If you're considering using your own principal residence for STR while you travel, that's a legitimate revenue source — just get the permit, the insurance, and comply with MAT.

Want to talk through your specific situation? 613-262-6545 or fil@613realtor.ca.