Mortgage & Tax Rules on Short-Term Rentals in B.C

Mortgage & Tax Rules on Short-Term Rentals in B.C


With the rising prices of homes in the Okanagan, having a rental suite or short-term rental helps many homeowners with their Kelowna mortgage payments. However, there are a few mortgage and tax rules on short-term rentals in B.C. any landlord should be aware of.

If you’re still considering whether or not to invest in a rental property, check out our article on Should You Invest In A Rental Property in Kelowna?

Airbnb Short-Term Rentals in BC


Airbnb recently reached an agreement with the BC government regarding provincial and municipal taxes. The platform is now collecting both taxes. The 8% provincial sales tax collected will be used to fund housing affordability measures for B.C. and up to 3% collected will go towards tourism initiatives, according to CBC news.

Now that the platform is charging tax, some believe it will level the playing field between hotels and Airbnb rentals. Some are lobbying for stricter regulations for Airbnb, believing that the taxes won’t make much of an impact.

Although there are provincial regulations, cities are permitted to put their own regulations. Did you know that short-term rentals spanning under 30 days are not legal in Kelowna? Despite this, the short-term rental market is growing rapidly. Make sure you know your city’s laws on short-term rentals before listing your property on Airbnb or a similar service.

Rental Suites in B.C.


As with Airbnb rentals, rental suites are a great way to help homeowners meet their mortgage payments. But did you know that an estimated 15% of suites are considered illegal suites? Its assumed this number is actually higher, with homeowners reluctant to report their rental suites if they don’t meet the criteria to make them considered legal.

Homeowners may find themselves in this situation for a number of reasons. They may have purchased a home with a rental suite, unaware of the regulations needed to make them legal.

However, some feel the laws in place to make rental suite legal are outdated and don’t support the need for affordable housing in BC. If an illegal suite is reported, homeowners can be fined up to $2,000 and may be required to rebuild their suites to make sure they meet the standards of a legal suite.

Outdated or not, if you have an illegal suite you may face complications with your insurance provider down the road. If someone is hurt on your property, or your home becomes damaged, your insurance provider may be more reluctant to pay as your illegal suite may contradict the terms of your policy. Additionally, tenants living in an illegal suite may not be covered by insurance.

Many people in these situations aren’t even aware that they’re breaking the law, and possibly their insurance contracts by renting out an illegal suite. They may not even know their suite is illegal. If you have basement suite or short-term rental property, make sure you know the laws to make sure you’re operating it within the law.

Mortgage Laws for Rental Income


Purchasing a house that has the possibility of generating rental income is a great opportunity. Generating extra income from your home means making those mortgage payments may be a bit easier. It also means you could qualify for a larger mortgage.

If you have a basement or secondary suite that could generate more income, a percentage of that income is allowed to be considered when qualifying you for a mortgage. However, this only applies if the property you are purchasing is going to be your principal residence, there is only one rental suite, and if the suite is legal and complies with local municipal standards.

Rental suites are a great way make extra income for homeowners and prospective homeowners. If you have questions about your current or a prospective rental in B.C., feel free to contact us. Our team of knowledgeable and experienced experts specialize in Kelowna mortgages and would be happy to help!

Feel free to contact us at John Antle Mortgages today.


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