Airbnb vs Long-Term Rental in Canada 2026 | Tax & Income Comparison
Updated
Income Comparison
Example: 1-Bedroom Condo in Toronto
Factor
Long-Term Rental
Airbnb
Monthly income
$2,500 (×12)
$150/night avg
Annual gross income
$30,000
$36,000-$42,000*
Vacancy rate
3-5% (1 month/2 years)
25-35% (seasonal, gaps)
Effective gross income
$28,500-$29,250
$23,400-$30,600
*Based on 60-70% occupancy, 180-night limit in Toronto
Example: 2-Bedroom Near Whistler
Factor
Long-Term Rental
Airbnb
Monthly income
$2,200
$200/night avg
Annual gross income
$26,400
$48,000-$58,000*
Vacancy/occupancy
5%
55-70% occupancy
Effective gross income
$25,080
$26,400-$40,600
*No primary residence rule in some resort areas
Expense Comparison
Expense
Long-Term Rental
Airbnb
Mortgage
$1,800
$1,800
Property taxes
$350
$350
Insurance
$100
$180 (STR insurance higher)
Utilities
$0 (tenant pays)
$200 (host pays)
Internet/streaming
$0 (tenant pays)
$100
Cleaning
$0
$200-$600/month
Furnishing (amortized)
$0
$300/month ($10K ÷ 3 years)
Supplies (toiletries, linens)
$0
$100-$200/month
Platform fees (Airbnb 3%)
$0
$70-$100/month
Property management
$200 (10%)
$350-$600 (15-25%)
Maintenance
$200
$300 (higher wear)
Vacancy loss
$100
$500-$1,000
Municipal licence fee
$0
$50-$100/month
Total monthly expenses
$2,750
$4,000-$5,600
Net Income Comparison
Metric
Long-Term
Airbnb
Monthly gross
$2,500
$3,000-$4,500
Monthly expenses
$2,750
$4,000-$5,600
Monthly net
-$250 to +$150
-$1,100 to +$500
Annual net
-$3,000 to +$1,800
-$13,200 to +$6,000
Airbnb has higher upside but also higher risk and volatility. Long-term rental is more predictable.
Tax Differences
Income Classification
Factor
Long-Term (Rental Income)
Airbnb (May Be Business Income)
Tax rate
Marginal rate
Marginal rate
Losses
Can offset other rental income
Business losses may offset other income
CCA allowed
Yes (with recapture on sale)
Yes (with recapture)
CPP payable?
No
Possibly, if classified as business
Active business income?
No
Possibly
GST/HST
Exempt (residential 1 month+)
Charged if over $30K revenue
GST/HST Obligations
Scenario
GST/HST Required?
Long-term rental (1 month+)
No — exempt supply
Short-term rental, under $30K revenue
No (small supplier exemption)
Short-term rental, over $30K revenue
Yes — must register and charge
GST/HST rate
5% GST or 13% HST (varies by province)
Input tax credits
Can claim ITCs on expenses if registered
On $40,000 Airbnb income in Ontario (13% HST): that is $5,200 in HST you must collect and remit. This significantly increases your effective costs compared to a long-term rental.
Deductible Expenses Comparison
Expense
Long-Term
Airbnb
Mortgage interest
Yes
Yes
Property taxes
Yes
Yes
Insurance
Yes
Yes
Repairs/maintenance
Yes
Yes
Property management
Yes
Yes
Cleaning
Minimal
Yes (significant)
Furnishing
No
Yes (CCA)
Supplies
No
Yes
Platform fees
No
Yes
Photography
No
Yes
Wifi/streaming
No
Yes
Municipal licence fees
No
Yes
Regulations by City
Major City Short-Term Rental Rules
City
Principal Residence Required?
Night Limit
Licence Required
Licence Fee
Toronto
Yes
180 nights/year
Yes
$61/year
Vancouver
Yes
365 (primary only)
Yes
$124/year
Montreal
Yes
No limit (licensed)
Yes
$150/year
Ottawa
Yes
180 nights/year
Yes
$110/year
Calgary
No
No limit
Yes
$100/year
Edmonton
No
No limit
Yes
$89/year
Victoria
Yes
In primary residence
Yes
Varies
Halifax
Rules in development
TBD
TBD
TBD
Penalties for Non-Compliance
City
Fine Range
Toronto
$1,000-$100,000
Vancouver
$1,000-$1,000/day
Montreal
$1,000-$100,000
Ottawa
$500-$100,000
Pros and Cons
Long-Term Rental
Pros
Cons
Stable, predictable income
Lower gross income potential
Low vacancy if priced right
Tenant disputes, eviction challenges
Less management time
Wear and tear over long periods
No GST/HST
Limited deductions
No furnishing costs
Rent control in ON, BC
Established legal framework
Bad tenants hard to remove
Airbnb/Short-Term Rental
Pros
Cons
Higher gross income potential
Higher expenses
Flexibility (use property yourself)
More time-intensive
More deductions
GST/HST if over $30K
No long-term tenant risk
Seasonal fluctuations
Full control between guests
Strict municipal regulations
Can adjust pricing dynamically
Furniture/setup costs ($10-$20K)
Decision Framework
Choose Long-Term Rental If
Factor
Details
You want predictable income
Same amount every month
You don’t want to manage constantly
Less day-to-day work
The property is not your primary residence
STR rules often require it
You live in a rent-controlled market
Stable tenants, steady cash flow
You don’t want GST/HST hassle
Long-term is exempt
Property is not in a tourism area
STR demand too low
Choose Airbnb If
Factor
Details
Property is in a high-tourism area
Resort town, downtown core
You live in the property (house hack)
Rent spare room or basement suite
You want maximum flexibility
Block dates for personal use
You enjoy hospitality
Guest communication, staging
The math works after all costs
Truly higher net income
Municipal rules allow it
Licensed, compliant
Choose a Hybrid Approach
Some properties work well with both:
Strategy
How It Works
Seasonal Airbnb
STR in summer (high demand), long-term in winter
Furnished mid-term rental
1-6 month corporate/travel nurse rentals (no STR regs, no GST/HST)