Short-term rental rules in BC: what the new legislation means for buyers and their mortgage
BC’s 2024 short-term rental legislation changed what you can do with a vacation property. The rules vary by municipality, and they directly affect how your mortgage can be structured.
BC’s 2024 short-term rental legislation fundamentally changed the math for anyone buying a vacation property with Airbnb income in mind. The province-wide principal residence requirement means a non-resident owner may not be able to legally operate a short-term rental in most municipalities. But the rules vary — some communities opted in to the provincial framework, others were exempted, and a few have their own permit systems. The differences matter enormously for how a property can be financed.
This guide covers the provincial legislation, the lender qualification impact, and the CRA tax dimension. We use Sunshine Coast municipalities as our detailed worked example — Sechelt, Gibsons, Powell River, and the SCRD electoral areas each handle short-term rentals differently — but the lender logic and provincial framework apply across BC.
For broader context on buying on the Sunshine Coast, see our Sunshine Coast mortgage guide.
The Key Rule Change: Principal Residence Requirement
What BC's Bill 35 means for anyone considering short-term rentals
BC’s Short-Term Rental Accommodations Act introduced a province-wide principal residence requirement: hosts can only operate a short-term rental in their primary home — the place where they actually live — plus one secondary suite or accessory dwelling unit on the same property. The practical effect: a non-resident owner generally cannot buy a vacation property anywhere in BC and rent it on Airbnb unless the local municipality has opted out or created its own permit system.
BC also launched a mandatory Short-Term Rental Registry in May 2025. All hosts must display a valid provincial registration number on their listings. Airbnb and VRBO are required to remove listings without valid numbers. This is active enforcement, not a paper rule.
How the Rules Play Out: Sunshine Coast Municipalities
The provincial framework sets the baseline, but each jurisdiction adds its own layer. We use Sunshine Coast municipalities as our detailed example — the pattern of variation is similar across BC.
| Community | Provincial Rule | Key Details |
|---|---|---|
| Sechelt | Provincial PR requirement applies | Principal residence only. Type 3 licences (non-resident STR) phased out entirely. |
| Powell River (City) | Provincial PR requirement applies | Principal residence only. Non-resident short-term rentals not permitted. |
| Town of Gibsons | Exempt (population under 10,000) | Non-resident STR possible via Temporary Use Permit. $2,500 TUP application + $2,000/yr licence. Council approval required. |
| SCRD Electoral Areas | Exempt from provincial PR requirement | Local bylaws require operator to reside on-site during rental. Max 2 bedrooms. Unhosted whole-home rentals prohibited. |
| qathet Regional District | Exempt from provincial PR requirement | Rules vary by electoral area and local zoning. Verify with Regional District before assuming rental income. |
Sechelt
The District of Sechelt is subject to the provincial principal residence requirement. The former Type 3 licence, which allowed non-principal-residence short-term rentals, has been phased out entirely. Under current regulations, a non-resident buyer would not be able to legally operate an Airbnb in Sechelt.
Enforcement fines reach $50,000 for operators and $10,000 per day for platforms facilitating non-compliant listings. If you’re considering a Sechelt vacation property and short-term rental is part of your plan, talk to us about what the current rules mean for your specific situation.
Powell River (City)
The City of Powell River is subject to the provincial principal residence requirement. Only principal-residence short-term rentals are currently licensed. The regulatory picture is similar to Sechelt — a non-resident owner faces significant barriers to legally operating a short-term rental under current rules.
Town of Gibsons
Gibsons has a population under 10,000 and is exempt from the provincial principal residence requirement. However, the Town's own Residential Guest Accommodation bylaws create two distinct streams.
Stream 1 requires principal residency: the host must occupy the property for at least nine consecutive months per year. This is the straightforward path for local residents.
Stream 2 allows non-principal-residence short-term rentals, the path a vacation property buyer would need, but requires a Temporary Use Permit. The TUP costs $2,500 to apply for, requires Council approval (which is not guaranteed), and the annual licence fee once approved is $2,000 per year. TUPs are time-limited and subject to renewal.
For a buyer considering Gibsons specifically because they want to Airbnb the property, the Stream 2 path is the only option, and it is expensive, uncertain, and subject to Council discretion. This is materially different from "Gibsons allows short-term rentals."
SCRD Electoral Areas (Roberts Creek, Halfmoon Bay, Pender Harbour, Elphinstone, West Howe Sound)
The SCRD electoral areas are exempt from the provincial principal residence requirement. However, local zoning bylaws under Bylaw 337 (Area A, Gibsons Rural) and Bylaw 722 (Areas B, D, E, F) already impose an operator-residency requirement: the host must be present on the property during any rental period. This means unhosted whole-home vacation rentals are prohibited even without the provincial rule. The property must have a maximum of two rooms available for rental.
In practice, the primary lawful short-term rental model in SCRD electoral areas is a hosted bed and breakfast arrangement: the owner lives there, rents rooms, and is physically present. An absent owner would generally not be able to operate a short-term rental under current bylaws.
Enforcement in rural electoral areas has historically been complaint-driven rather than proactive. The provincial registry requirement changes this: any listing without a valid registration number is now visible to regulators.
qathet Regional District (Rural Powell River Area)
The qathet Regional District is exempt from the provincial principal residence requirement. Rules vary by electoral area and local zoning. Buyers considering rural properties in the qathet RD should verify local short-term rental permissions with the Regional District before making any assumptions about rental income.
The Financing Consequence: When Short-Term Rental Income Counts and When It Doesn't
The regulatory picture has a direct impact on how your mortgage is structured
Most lenders will not count short-term rental income toward mortgage qualification if the rental is not legally permitted under local regulations. A listing on Airbnb does not establish legality — a valid short-term rental licence does. If you are buying in a municipality where non-resident STR is restricted, rental income may not be includable in your qualification regardless of what the property has historically earned. Talk to us about your specific situation — the options depend on the municipality and the lender.
Why Lenders Care About Legality, Not History
A property that generated $40,000 in Airbnb income over the past two years is relevant only if it can continue to do so legally. Lenders are underwriting the future, not the past. If the regulatory environment has changed — and it has — income from non-compliant rentals generally cannot be used to service the debt.
The CRA Dimension
The federal government disallowed expense deductions, including mortgage interest, property taxes, and depreciation, for short-term rentals not compliant with local licensing requirements, effective for the 2024 tax year. A buyer running a non-compliant short-term rental does not just face enforcement risk: they lose the tax treatment that makes the investment model work.
Through our lender partnerships, Dreyer Group has access to financing programs specifically designed for short-term rental properties — with options up to 75% LTV for legally permitted rentals. If you're buying in a jurisdiction where short-term rental is permitted and you have the local licence, ask us how short-term rental income can be structured into your qualification. Some programs accept economic or market rent as an income proxy, so you don't need two years of Airbnb history to qualify.
The Qualification Math Without Short-Term Rental Income
For buyers who want a vacation property in a municipality where short-term rental is not currently permitted, the mortgage will typically need to be qualified on personal income alone. The property is treated as a second home: minimum 20% down payment (CMHC does not insure vacation or recreational properties), standard stress test on personal income, no rental income offset.
This is still a viable purchase for many buyers, but the financial model is different, and buyers should run the numbers with that constraint before falling in love with a specific property.
What to Do Before Making an Offer
Four steps to protect yourself before you commit
1. Confirm the Zoning and Licence Stream
For Gibsons properties: ask the Town’s Planning Department whether the specific property is eligible for a Stream 2 TUP. Do not assume it is. For SCRD properties: ask the SCRD whether the specific electoral area and zoning permit any form of short-term rental. For Sechelt and Powell River: unless you plan to make the property your primary residence, short-term rental is very unlikely to be permitted under current rules. For other BC municipalities, check with the local planning department — the pattern of variation is similar.
2. Do Not Rely on the Listing Agent's Representation
Listing agents represent the seller. They are not required to advise on regulatory changes that reduce a buyer’s projected income. Some will not know. Some will not say. The responsibility for understanding the regulatory environment is the buyer’s, and their broker’s.
3. Build the Model Without Short-Term Rental Income First
Before investing in due diligence on a property whose viability depends on Airbnb income, run the qualification numbers without it. If the purchase does not work on personal income alone, the short-term rental income assumption is doing too much work in the model.
4. Talk to a Broker Who Understands the Local Rules
The short-term rental landscape changed substantially in 2024. A broker familiar with the local regulatory picture will flag municipality-specific issues during qualification, not after the appraisal.
If you’re looking at a BC property and short-term rental income is part of your plan, reach out before you make an offer. We can walk you through what qualifies and what doesn’t in your specific situation.
A Note for Existing Operators
If you were operating a short-term rental before the 2024 changes
The regulatory landscape changed in stages and enforcement is increasing. The provincial registry requirement means non-compliant listings are now visible. Airbnb and VRBO are actively removing listings without valid registration numbers.
For property owners approaching renewal or refinance: lenders reviewing the file will assess whether income being claimed is from a legally permitted source. If the income was from an unlicensed short-term rental, it should not be included in the refinance qualification, and including it creates downstream risk if the lender or CMHC audits the file. If your renewal is coming up and your income picture has changed because of the new rules, it is worth having that conversation early.
If your property has unpermitted renovations in addition to short-term rental considerations, that adds another layer to the lending conversation. Addressing both early makes renewal smoother.
Planning a Purchase Where Short-Term Rental Is Part of the Plan?
We’ll help you understand exactly what the property can support under current regulations and structure the financing accordingly.