Do You Need a Business License to Rent on Airbnb?

If you want to make some extra money by renting out a house – or even a room – for a short period, the Town of Aurora may need you to obtain a business license shortly. One of the recommendations in a staff report looking at measures to “ensure safety, maintenance, and upkeep” of registered properties, including those advertised on sites like Airbnb, is the necessity for a license.

“All short-term rentals (STR) and bed & breakfasts must obtain a business license and place a sign on their property to identify the premises as an STR business,” according to one important proposal. In a report to the council this week, Alexander Wray, manager of bylaw services, stated, “STRs have progressively expanded in cities across North America, providing an alternative to standard housing alternatives.” “Aurora’s residents are concerned about public safety, property maintenance, and noise problems due to the growing growth.

“All short-term rentals (STR) and bed & breakfasts must obtain a business license and place a sign on their property to identify the premises as an STR business,” according to one important proposal. In a report to the council this week, Alexander Wray, manager of bylaw services, stated, “STRs have progressively expanded in cities across North America, providing an alternative to standard housing alternatives.” “Aurora’s residents are concerned about public safety, property maintenance, and noise problems due to the growing growth.

“With this regulation [limiting one STR per lot], only one sort of business will be allowed to operate on the site.” An operator cannot, for example, rent out both the main floor and basement suites at the same time. Limiting the number of STR bookings and housing units that can be rented will help to alleviate community concerns. [Parking rules] will help alleviate complaints about on-street parking caused by STR business practices. The purpose of this law (on the maximum number of visitors) is to drastically reduce neighborhoods impacts such as home parties, noise, garbage, and other nuisance behaviors.”

If the application is approved, the license holder must reply to any complaint within two hours of being notified. It, according to Wray, is to ensure that operators are held accountable for their premises and that they can respond to any issues raised by the municipality or local emergency services.

As a result of complaints, a demerit point system for license holders could be implemented.

“This requirement will help ensure continuous compliance with other applicable municipal rules and provincial statutes,” Wray added. “For example, if a noise complaint is filed and found to be valid, the property’s license will be docked with demerit points. This procedure is designed to keep operators accountable and ensure compliance with regulations and provincial legislation while minimizing community consequences.

“If the operator’s license is suspended or revoked after reaching the pre-determined demerit point threshold, they will no longer be permitted to run an STR or bed & breakfast service in Aurora.” The Aurora Appeals Tribunal is responsible for deciding whether to reinstate, add conditions, or permanently revoke the license according to current provisions specified in the Aurora Appeals Tribunal Act.

According to data compiled by the town, Aurora has anything from 56 to 115 distinct STR properties, with numbers fluctuating annually. The average cost of such rentals is $113 per night, with single-family homes accounting for 68 percent of the options.

“In 64% of listings, the entire home is advertised for rent,” Wray added. “At any given time, this amounts to between 36 and 74 whole-home listings.” Companies that market, advertise, or assist STR bookings through their platforms will be forced to register for and get a yearly business license, which will cost $5,000.

A one-time fee of $1 will be paid to the town for each night booked through the STR firm. Staff recommends a uniform strategy for the Town of Aurora to offset administrative costs associated with the monitoring and enforcement of STRs, as it does for the City of Toronto and the Town of Newmarket. In addition, staff recommends a $400 yearly license charge per STR.”

The new measures are expected to bring in between $16,000 and $32,000 per year to the town’s coffers if the initiative is authorized.