March 25, 2024
- 10 min read
March 25, 2024
- 10 min read
Everything you need to know before renting your home or cottage…
Short Term Rentals have become a hot button issue across the District of Muskoka in recent years. Within our region there are now regulations to try to license and limit the impact of Short Term Rentals.
Read more below on how to work within these regulations.
What is a Short Term Rental?
A short term rental is legally defined as:
“any dwelling unit or mobile home or any part of foregoing as a place of temporary habitation, lodging or occupancy under authority of a concession, permit, lease, license, rental agreement or similar commercial arrangement authorizing such temporary habitation, lodging or occupancy for a period equal to or less than twenty-eight (28) consecutive calendar days.”
Short term rentals can either be a room within your home – or the entire dwelling.
Septic Size Determines Occupancy
Your permitted occupancy level hinges on your septic use permit. Unsure about the status of your permit? Reach out to your local Johnston & Daniel Realtor® – they will be able to help you find the paperwork.
You could also talk to the company who last pumped your system – they often have you on record.
Maximum People per Bedroom
The rule of thumb is two individuals per bedroom. This is assuming your septic system doesn’t restrict you due to its size.
What to Consider before committing to Short Term Rentals?
For homeowners with septic and well systems, increased usage and accelerated wear and tear are factors you need to consider. Using your home as a short term rental can shorten their lifespan. This could lead to expensive repairs or even replacements.
Also consider your relationship with your neighbours – if you start having short term rentals, your relationship with them might change.
** The Township of Muskoka Lakes By-Law is anticipated to be finalized by June/July 2024, please monitor the Township’s website closely – as this is where the final bylaw will be published shortly.
What exactly are Demerit Points, and what role do they play?
Demerit Points are penalties that are assigned by the by-law officer for each violation they observe – and often accumulate per day. If you have a certain number of points – they are able to suspend your Short Term Rental license for either six or twelve months, as well as issue fines. This has the potential to completely stop your short term rental business in its tracks.
Tax Implications from Short Term Rentals
Depending on the frequency of your short term rental business – there could be significant tax implications, both yearly as well as if you sell your property in the future. I’d strongly recommend talking to your accountant before committing to renting out your property to make sure you understand these future costs.
If you’re considering creating a short term rental in your home or cottage, reach out to one of our Realtors® to ensure you’re making the most of your home’s value – both for resale in the future, as well as covering your bases before you get started.
