Quebec's Short-Term Rental Regulatory Framework
In Quebec, short-term rentals are governed by the Tourist Accommodation Act (CQLR, c. H-1.01). Following the 2022-2023 reforms, every owner wishing to offer tourist accommodation — whether a room, an entire apartment, or a house — must obtain a registration number from the Corporation de l'industrie touristique du Québec (CITQ). This number must appear on all listings published on platforms such as Airbnb, Vrbo, or Booking.com. The platforms themselves are required to remove listings that do not include a valid registration number.
Municipalities also have significant regulatory power. The City of Montreal, for example, adopted a bylaw limiting short-term rentals to the owner's principal residence in most boroughs. Quebec City applies similar restrictions in certain areas. Before getting started, always check the municipal bylaws in effect in your area.
Impact on Your Mortgage Financing
The impact of short-term rentals on your mortgage is significant and often underestimated. A-lenders (major Canadian banks) generally consider Airbnb income ineligible for debt service ratio calculations, viewing it as unstable, seasonal, and without guaranteed continuity. Unlike traditional rental income (12-month leases), which lenders typically recognize at 50% to 80%, platform income does not receive the same treatment.
If you are purchasing a property specifically for short-term rental, some alternative lenders or credit unions may accept this income in their analysis, provided you present a tax history of at least two years showing stable revenues. The interest rate offered will generally be higher than for a standard residential mortgage, and the required down payment could be 20% or more, since CMHC mortgage insurance typically does not cover properties intended solely for short-term rental.
Change of Use and Mortgage Clauses
Most mortgage contracts contain a clause requiring the property to be occupied by the borrower as a principal residence or used in accordance with the purpose declared at the time of the loan application. Fully converting your residence into a short-term rental constitutes a change of use. If your lender is informed — or discovers this — they could demand early repayment of the mortgage balance. Some lenders take a more flexible approach for partial (one room) or occasional rental, but caution is advised.
Tax Obligations and Tax Collection
- Report your income: All short-term rental income must be reported on your fédéral tax return (Form T776) and provincial return. You may deduct reasonable expenses: mortgage interest, property taxes, insurance, maintenance, supplies, and platform fees.
- Register for GST/QST if required: If your gross short-term rental revenues exceed $30,000 over a 12-month period, you are required to register for GST (fédéral) and QST (provincial) and collect these taxes from your guests.
- Collect the lodging tax: In Quebec, a 3.5% lodging tax applies to all tourist rentals. Airbnb automatically collects and remits this tax for bookings made through its platform, but if you use other channels, it is necessary to collect and remit it yourself to Revenu Quebec.
- Keep your records: Keep all receipts, platform statements, and supporting documents for at least six years. The CRA and Revenu Quebec may request an audit at any time.