Short‑Term Rentals Are Being Banned in Ontario: What Landlords Should Do Next

In 2025 Ontario cities including Toronto, Mississauga and Hamilton have implemented new regulations that drastically restrict short‑term rentals.

Platforms such as Airbnb are now subject to licensing requirements, heightened inspections and stiff penalties. For investment property owners, adapting to these changes is no longer optional; long‑term leasing has become the default path forward.

This blog outlines what landlords must understand about the updated rules as well as the key steps to successfully convert to professional long‑term rental management.

Evolving Rules Impacting Short‑Term Rental Operators  

Municipalities across Ontario have established strict short‑term rental legislation in response to rising housing pressures and community concerns.

In Toronto, the phase three bylaws that took effect on January 1, 2025 require operators to register, pay registration or renewal fees, and present emergency exit plans on property listings. The city also conducts annual inspections and may revoke licenses within just ten days if standards are not met.

Mississauga has restricted short‑term rentals to principal residences only. Hosts must obtain a license, display it prominently on listings, and limit occupancy to 180 nights per year.

They must also carry at least two million dollars in liability insurance and maintain high safety standards. These measures align with the City of Toronto and Hamilton’s focus on protecting rental housing stock and neighbouring residential communities.

The province’s Municipal Act empowers local governments to manage short‑term lettings tightly. Armed with this authority, municipalities regulate short‑term units in order to preserve long‑term rental availability and public trust.

Why These Restrictions Matter  

There are several reasons cities are limiting short‑term rentals.

First, high‑turnover listings reduce available housing for full‑time residents. Urban neighborhoods now face noise complaints, parking congestion, and diminished community cohesion.

Municipal accommodation taxes must be collected correctly and reliably. As a result, municipal leaders are increasingly enforcing compliance and pursuing fines when operators ignore policy changes.

What Landlords Should Do Now  

As short‑term rentals become riskier and often non‑viable, transitioning to long‑term leasing is the most stable route forward.

The long‑term market remains strong in major Ontario cities, with vacancy rates under 3 per cent in the GTA and competition for quality tenants high. This shift promises more predictable, consistent rental income and fewer administrative headaches.

Landlords should update their marketing strategy to showcase rental properties as ideal for long‑term occupants. Highlight attributes that matter to tenants, such as property condition, proximity to transit and responsive management. Emphasize amenities that support longer stays rather than transient visits.

Insurance needs will change when switching from short‑term to long‑term rentals. Landlords should contact providers to replace short‑term policies with standard landlord insurance that covers multi‑year tenancies.

Updating lease documents to reflect business tenancy durations is essential. Creating a digital tenant portal, offering online rent payment, and providing clear maintenance request channels can distinguish listings in competitive markets.

Proactive compliance is critical. If your short‑term license has expired or is no longer renewed it is best to let it lapse rather than risk qualifying for penalties. Towns like Toronto and Mississauga now employ automated listing scans to identify unregistered hosts. Violations may carry fines up to one hundred thousand dollars per offense.

What Ontario Landlords Need to Know  

In 2025 Bill 17 was introduced to streamline enforcement powers across municipalities. Tenant screening tools are now tied to regulatory enforcement, reducing registration fraud.

Across the province, legislative bodies are tightening thresholds around permissible stays longer than twenty eight days. In Toronto, it is possible that even that grace period will disappear.

Landlords should maintain detailed global inspection and compliance files. Even without active short‑term listings, running records of previous registration, licensing and platform logs helps prove you have transitioned legally and transparently.

When it comes to leasing, highlight features of long‑term housing such as proximity to transit routes, schools and essential services.

Assure prospective tenants that maintenance is prompt facility upgrades are planned and that management is fully compliant with municipal regulations.

Final Thoughts  

Ontario has signaled its commitment to stabilizing its housing supply by curbing short‑term rentals. For landlords relying on platforms such as Airbnb, this marks a strategic turning point. The most forward‑thinking property owners will accelerate a pivot to long‑term leasing models.

With vacancy rates still tight and tenant demand rising, long‑term rental arrangements can provide steady income and reduced legal risk. Landlords who modernize marketing, update insurance, comply with regulations, and focus on tenant quality stand to benefit in this evolving framework.

Interested in transitioning your property to long‑term rental management? Our team at Royal York Property Management can assist with compliance reviews, tenant screening modernization, and tailored lease strategies to ensure stability and success. Contact us today to begin your transition.