Canada – Property Letting

How does the property letting process work in Canada?

Tenant protections — and the corresponding duties placed on landlords — are shaped primarily by provincial and territorial legislation, producing meaningful differences from one part of Canada to the next. There is no single federal tenancy framework comparable to, say, New Zealand’s Residential Tenancies Act or Germany’s Civil Code. Every province maintains its own Residential Tenancies Act or equivalent statute, so the first task for any prospective landlord is to establish which provincial rules govern their property.

The letting process itself follows a broadly recognisable sequence: marketing the property, assessing prospective tenants, entering into a lease, collecting a deposit, and overseeing the ongoing tenancy. Properties are typically advertised on platforms such as Realtor.ca, Kijiji, PadMapper, or through a letting agent. Landlords are required to comply with relevant human rights legislation throughout the tenant selection process — provincial human rights codes prohibit discrimination on grounds including race, ancestry, place of origin, religion, marital or family status, disability, sex, sexual orientation, age, and lawful source of income.

Tenancy agreements can be written or verbal in most provinces, though a written lease is always the wiser choice. Some provinces have moved towards standardised documentation: in Ontario, any lease entered into after 30 April 2018 must use the mandatory Standard Lease form, available through the Ontario Central Forms Repository. After signing, landlords are generally required to provide the tenant with a copy within a specified timeframe — in some provinces, this is within 21 days. Fixed-term leases are permitted across the country, but if a landlord allows the tenant to remain after the fixed term without concluding a new agreement, the tenancy typically rolls over into a month-to-month arrangement.

Twelve months is the most common lease duration in Canada, with many tenancies continuing on a month-to-month basis thereafter. Both landlords and tenants have clearly defined notice obligations that depend on the nature of the tenancy. Unresolved disputes are handled by provincial bodies such as Ontario’s Landlord and Tenant Board or British Columbia’s Residential Tenancy Branch.

What types of rental arrangements are available in Canada — long-term, short-term, and holiday lets?

Canada’s rental landscape divides broadly into three categories: long-term residential lettings (generally 12-month leases regulated by provincial tenancy legislation), month-to-month arrangements, and short-term or holiday lets facilitated by platforms such as Airbnb and Vrbo. Each carries its own legal, tax, and licensing implications.

Long-term letting is the most straightforward of these and falls entirely within the scope of the applicable provincial Residential Tenancies Act. Short-term letting, by contrast, operates within a fast-changing and highly localised regulatory environment. The Canada Revenue Agency (CRA) defines a short-term rental (STR) as any rental property let for fewer than 90 consecutive days, though individual provinces and municipalities may apply different thresholds.

Ontario’s provincial government has taken a relatively hands-off stance, leaving most short-term rental governance to individual municipalities. British Columbia has gone in the opposite direction, introducing one of the country’s most far-reaching provincial frameworks. The Short-Term Rental Accommodations Act, brought into force in February 2024, lays out comprehensive provincial rules intended to regulate STRs while also addressing housing availability concerns. A central feature is the principal residence requirement, which confines short-term rental activity to the host’s own principal residence plus, at most, one secondary suite or accessory dwelling unit on the same property.

As of 1 May 2025, every short-term rental host, platform, and strata hotel platform operating in British Columbia must be enrolled in the provincial short-term rental registry. In Ontario’s major cities, the picture varies: Toronto requires STR owners to obtain a city licence and collect and remit a 6% municipal accommodation tax, while Ottawa operates its own separate licensing scheme. Québec is known for its rigorous approach to short-term rental regulation, and operators running unregistered accommodation in the province can face fines of up to $100,000.

From a tax standpoint, beginning with the 2024 calendar year, the CRA no longer permits expense deductions for non-compliant short-term rentals. Operating an unlicensed or unregistered STR therefore carries a double risk: potential fines and the permanent loss of the right to offset rental expenses against income. The CRA has also introduced new rules obliging digital platforms such as Airbnb and Vrbo to report information to it on an annual basis.

What rental income can landlords expect in Canada, and how are rates set?

Rent regulation in Canada consists of a body of laws and policies that restrict how much landlords can raise rents from one year to the next. Each province and territory has the authority to legislate in this area, with the general aim of keeping rent within reach for most households. There is no uniform national rent control system, and in certain provinces there is no ceiling on either starting rents or annual increases.

Landlords are broadly free to set any rent they choose when first letting a property or when a new tenancy commences. Where rent control is in place, it limits the extent to which an existing tenant’s rent can be raised. Ontario’s permitted rent increase guideline for 2025 stands at 2.5%, representing the maximum a landlord may charge most sitting tenants that year. British Columbia set its 2025 cap at 3%. In Nova Scotia, the rent increase cap is 5.8% and remains in effect until 31 December 2025, or until further notice.

Provinces that have no rent control — including Alberta, Saskatchewan, and Newfoundland — place no ceiling on the size of rent increases, but still enforce rules on how often increases may occur and how much notice must be given. In Alberta, for instance, rents can only be raised once within any twelve-month period for an existing tenant, and landlords must provide three months’ written notice in advance for periodic leases.

Québec operates differently again: there is no fixed cap, but the Tribunal administratif du logement (TAL) advises landlords on appropriate increases each year. For 2024, the recommended cap for unheated units was 4%. Any rent increase in Québec requires agreement from the tenant; if the tenant refuses, the landlord may apply to the TAL, which retains the power to approve the increase.

Landlords are advised to verify the current annual guideline with their provincial authority before serving a rent increase notice, as these figures are revised each year. The Canada Mortgage and Housing Corporation (CMHC) publishes rental market data — including average rents broken down by city and unit type — which is a helpful reference when determining an initial asking rent.

Do landlords need to provide a furnished or unfurnished property in Canada?

No provision of Canadian tenancy legislation obliges landlords to furnish rental properties. The great majority of long-term residential rentals in Canada are offered unfurnished or semi-furnished — typically with key appliances such as a refrigerator and stove included, but without furniture. This mirrors the norm in Australia and much of continental Europe, and contrasts with many short-term rental markets where full furnishings are standard.

Where appliances or fixtures are listed as part of the lease, however, the landlord assumes a legal duty to keep them functioning throughout the tenancy. Incorporating a thorough inventory into the lease — cataloguing all fixtures and appliances along with a description of their condition at the start of the tenancy — is strongly recommended for both parties and can help prevent disputes when the tenancy ends.

Furnished lettings are more prevalent in the short-term and corporate market and typically attract higher rents. For residential tenancy purposes, there is no formal regulatory distinction between furnished and unfurnished lets, though the presence or absence of furniture can affect how a property is classified in the short-term rental market and may therefore influence which licensing rules apply. For tax purposes, landlords who supply furniture may be able to claim capital cost allowance (depreciation) on those items — refer to Canada Revenue Agency guidance or a qualified tax adviser for current rules.

Do you need a licence or registration to let a property in Canada?

Canada has no single national landlord licensing or registration requirement. Whether a licence is needed depends primarily on the municipality in which the property is located and whether the letting is long-term or short-term in nature. Requirements have been tightening considerably in recent years, particularly for short-term lets, and non-compliance can expose landlords to substantial fines.

For long-term residential lettings, many municipalities require a business licence. Vancouver, for example, requires landlords renting out a unit for 90 days or more to hold a long-term rental business licence. Similar requirements exist elsewhere. Landlords should check directly with their local municipal authority before advertising any property.

Licensing requirements for short-term rentals are now widespread and actively enforced. In Ottawa, operators must apply for a short-term rental licence, and the property must serve as the operator’s principal residence. In Toronto, STRs must be owner-occupied (principal residence only), operators must register with the City of Toronto, and a 6% Municipal Accommodation Tax must be collected and remitted on all bookings. In British Columbia, enrolment in the provincial registry is mandatory for all STR hosts. There is no difference in the licensing requirement between resident and non-resident landlords, but non-residents face additional complications because the principal residence requirement effectively prevents anyone who does not live in Canada from operating a short-term let in most regulated areas.

Landlords should consult their provincial tenancy authority and local municipal office for the most up-to-date requirements. For British Columbia, visit BC’s Short-Term Rental information page. In Ontario, contact your local municipality directly. For broader context on the rental landscape, the CMHC provides useful national overviews.

How do you obtain a landlord licence or register as a landlord in Canada?

Because requirements differ by municipality and rental type, the precise process varies throughout the country. The steps outlined below reflect the general approach for both long-term rental business licences and short-term rental registrations in regulated cities. Always confirm the exact requirements with your local authority, as procedures and fees are subject to frequent change.

1. Determine applicable requirements. Establish whether your municipality requires a business licence for long-term letting, a short-term rental licence, or both. Check with your local municipal government and, if your property is in B.C., also consult the provincial Short-Term Rental Registry.
2. Confirm principal residence eligibility. For short-term rentals in regulated areas — including most major B.C. cities and Toronto — the principal residence requirement restricts short-term rental units to the host’s principal residence plus one secondary suite or accessory dwelling unit on the same property. Non-residents who do not live in Canada will generally not be eligible for STR licences in these areas.
3. Gather required documents. Typical documents include proof of property ownership, proof of principal residence (for STR applications), a valid government-issued ID, strata or landlord approval where applicable, and details of the property. Some municipalities also require a property inspection or safety certification.
4. Submit the application and pay the fee. Applications are generally submitted online through the municipal licensing portal. Fees vary by city and licence type — Ottawa, for example, requires operators to collect and remit a 5% Municipal Accommodation Tax (MAT), plus HST, on the total booking amount. Check current fee schedules directly with your municipality, as these are updated regularly.
5. Register with the provincial registry where required. In British Columbia, all STR hosts must also register with the provincial registry. Listings belonging to unregistered hosts were removed from platforms from 1 May 2025, with all future bookings cancelled from 1 June 2025.
6. Display licence details on listings. Once licensed, platforms require hosts to include their business licence and/or provincial registration number in all advertising listings.
7. Comply with ongoing obligations. Keep the licence current by renewing it annually (most licences run on a yearly basis), continuing to satisfy safety requirements, and remitting any applicable accommodation taxes on schedule.

Non-resident owners are strongly advised to appoint a local property manager or agent to handle licensing and compliance matters on their behalf. Processing times differ by municipality — allow several weeks to a few months for initial applications in high-demand cities.

What are the rules around deposits in Canada?

Deposit rules across Canada vary considerably from province to province, and in certain jurisdictions deposits are either prohibited outright or subject to tight restrictions. Unlike the United Kingdom, where a national Tenancy Deposit Protection scheme requires all deposits to be held in a government-approved custodial arrangement, Canada has no equivalent national framework — every rule on deposits is established at the provincial level, with no centralised deposit protection register.

In most provinces, landlords are permitted to collect a security deposit, typically equivalent to either half a month’s rent or one full month’s rent, depending on the jurisdiction. In Alberta, for example, the security deposit is capped at one month’s rent. In British Columbia, the security deposit (referred to there as a “security deposit” or “damage deposit”) is capped at half a month’s rent. Prince Edward Island imposes a similar limit. In provinces that permit security deposits, landlords are required to hold them in accordance with provincial rules, and in some jurisdictions interest must be paid on deposits held over time.

Québec stands out as a notable exception: collecting any deposit from a tenant is illegal in Québec. While it does happen in practice, it is not permitted under the law.

Deposits may only be drawn upon for unpaid rent or damage that goes beyond ordinary wear and tear. Landlords are required to return the deposit — or provide an itemised account of any deductions — within a set number of days after the tenancy concludes, typically between 10 and 30 days depending on the province. Any disputes over deposit deductions are resolved through the relevant provincial tenancy tribunal. Landlords are strongly advised to carry out thorough move-in and move-out inspections and to document the property’s condition with photographs in order to substantiate any claims against the deposit.

Who is responsible for maintenance and repairs in Canada?

Under Canadian tenancy law, the principal duty to keep a rental property in good repair rests squarely with the landlord. Legally, landlords are obliged to maintain both the rental unit and the common areas of the property in a condition that meets habitability standards, and to comply with all applicable housing, health, and safety regulations. This obligation extends across the full range of property elements.

In practical terms, this covers structural integrity (walls, roofs, and foundations); essential utilities including reliable heating during colder months, hot and cold running water, and electricity; pest control; appliances that are included in the lease; and safety equipment such as smoke detectors, carbon monoxide detectors, and fire exits.

Tenants are responsible for keeping the property reasonably clean, avoiding damage beyond fair wear and tear, and reporting maintenance issues to the landlord promptly. Landlords must not disrupt the tenant’s quiet enjoyment of the premises and must ensure the unit remains habitable throughout the tenancy. What constitutes “habitable” is typically defined by reference to minimum housing and health standards established under provincial regulations.

Where a landlord neglects to carry out necessary repairs, tenants can file a formal complaint with the provincial tenancy authority, which may order the landlord to remedy the issue, pay compensation, or reduce the rent. This framework is broadly analogous to the implied covenant of repair under England and Wales’ Landlord and Tenant Act 1985, though enforcement runs through the relevant provincial tribunal rather than through the courts.

How are letting agents used in Canada, and what do they charge?

Property management companies and letting agents are widely used across Canada, and are particularly common among non-resident landlords and those with multiple properties. A full-service property management firm typically handles advertising, tenant screening, lease preparation, rent collection, maintenance coordination, and compliance with all applicable laws — including the withholding tax obligations that fall on non-resident owners.

Unlike the United Kingdom, where the Tenant Fees Act 2019 prohibits most charges being passed on to tenants, Canada has no single national restriction on agency fees charged to either party. The structure of fees and any legal limitations on tenant charges are determined at the provincial level. In most provinces, it is the landlord who pays the property management fee, though practices differ. Landlords should confirm current rules with their provincial consumer protection or housing authority.

Property management fees in Canada typically fall in the range of 8% to 12% of monthly rent for a comprehensive full-management service, though this varies according to the market and the scope of services provided. Tenant-finding-only services are generally cheaper. For short-term rentals managed through platforms such as Airbnb, the platform charges a host service fee in addition to any property management fees — as of 2025, this is typically around 3% per booking, though this should be confirmed directly with the platform, as it may change. Fees should always be requested in writing, and landlords should establish whether they are subject to HST (Harmonised Sales Tax) or GST.

Given the complexities surrounding property taxes, income tax on rental income, and withholding tax requirements on rent paid to non-residents, a non-resident owner would be well served by engaging a property management firm and formally designating them as their Canadian agent. This arrangement allows the firm to handle the filing of all necessary forms and ensure that amounts owed to the CRA are remitted on time.

What taxes apply to rental income in Canada?

How rental income is taxed in Canada depends substantially on whether the landlord is a Canadian resident or a non-resident. Both categories are subject to federal income tax administered by the Canada Revenue Agency (CRA), but the rules and collection mechanisms differ considerably.

Resident landlords report rental income on their annual Canadian income tax return and pay tax at their applicable marginal rate. Federal rates range from 15% on the lowest income bracket to 33% on income exceeding $246,752, as of the 2024 tax year, with provincial rates adding a further layer of tax on top. Allowable deductions include mortgage interest, property management fees, insurance premiums, property taxes, repair and maintenance costs, advertising expenses, and capital cost allowance (depreciation) on the building and eligible assets. Net rental income is combined with other income and taxed accordingly.

Non-resident landlords face a mandatory withholding tax under Part XIII of the Income Tax Act. Where rental income from Canadian real property is paid or credited to a non-resident, the payer or agent is required to withhold 25% of the gross rental income. This withheld amount must be remitted to the CRA on or before the 15th day of the month following the month in which the rental income is paid or credited.

The 25% withholding on gross rent is the default position, but non-residents can reduce this burden by making an election under Section 216 of the Income Tax Act. This election allows non-resident landlords to be taxed on net rental income — that is, gross rent after allowable expenses — rather than on the full gross amount. To proceed, a Form NR6 must be filed with the CRA. Non-residents have up to two years after the end of the tax year to file a return and claim rental expense deductions, after which they are taxed on net rental income at the rates applicable to individuals.

Failing to withhold the required amount, or remitting late, can trigger a penalty of up to 10% of the tax that should have been withheld. Canada has concluded tax treaties with many countries that may reduce the standard 25% Part XIII rate — the specific implications for your situation should be confirmed with the CRA or a qualified tax adviser, as the standard rate under Part XIII is 25% unless a treaty with your country of residence provides for a lower rate.

Non-Canadian citizens or non-permanent residents who own and rent out property in Canada are also considered “affected owners” under the Underused Housing Tax (UHT) framework, and must file a UHT return for each relevant year by 30 April of the following year. In most cases where the property is being rented out, an exemption from the actual tax will apply — but the return must still be filed on time to claim that exemption.

Provincial income and land transfer taxes may also be relevant depending on the property’s location. Consulting a Canadian tax adviser with expertise in non-resident property matters is strongly recommended given the complexity of these obligations.

What are the rules around ending a tenancy or evicting a tenant in Canada?

Canada’s tenancy framework affords tenants a high degree of protection, and landlords must follow prescribed legal procedures to bring a tenancy to an end or recover possession of their property. A tenancy can only be terminated by a landlord for specified reasons, which typically include non-payment of rent, breach of the lease, causing serious damage to the property, or the landlord requiring the unit for their own use or that of a close family member. In many provinces, no-fault evictions — for example, in connection with renovation work — are heavily restricted or procedurally demanding.

Notice periods are set by each province and vary according to both the reason for the notice and the type of tenancy in question. In Ontario, landlords can only serve a termination notice if the tenant has failed to pay rent in full, has damaged the property, or has interfered with the reasonable enjoyment of others, and such notices typically require 20 days. In British Columbia, required notice periods for different grounds range from 10 days for non-payment of rent to several months in cases involving landlord use of the property.

A particularly important point for expat landlords is what happens when a fixed-term lease expires: if the tenant is allowed to remain without a new fixed-term agreement being signed, the tenancy converts to month-to-month. In many provinces, only the tenant can end a month-to-month tenancy without cause. This underlines the importance of managing lease renewals proactively and seeking legal advice before issuing any termination notice.

Disputes are handled by provincial tenancy boards or tribunals. In British Columbia, wait times for the dispute stream that fast-tracks cases involving unpaid rent fell by more than 52%, from 10.5 weeks in February 2023 to under five weeks in February 2024, suggesting meaningful progress in resolution times. In Ontario, these matters are handled by the Landlord and Tenant Board. Landlords should be fully aware that any attempt to remove a tenant outside the formal legal process — such as by changing the locks or disconnecting utilities — is unlawful and exposes the landlord to significant financial penalties.

What should expat landlords know about managing property remotely in Canada?

Overseeing a Canadian rental property from abroad introduces significant legal, tax, and operational complexity, making the appointment of a reliable local property manager not merely convenient but essentially indispensable. Beyond the everyday tasks of managing tenants and coordinating maintenance, the most pressing obligation for non-resident landlords is ensuring compliance with Canada’s non-resident withholding tax regime.

Any payer or agent remitting rental income to a non-resident landlord is required to withhold 25% of the gross amount before passing it on. This obligation is most practically handled by a property manager who collects the rent, retains the required portion, and remits it to the CRA as a standard part of their service. Where a property manager fails to remit correctly, the CRA will charge compound daily interest on the shortfall and may also impose a penalty.

Non-resident landlords who wish to have tax withheld on net rental income rather than gross must appoint a Canadian resident as their authorised agent and file Form NR6 with the CRA before the first rental payment is received. Delegating this responsibility to a trusted Canadian-resident paying agent ensures that tax is remitted properly on the landlord’s behalf. The NR4 information return must also be submitted annually.

The CRA actively pursues compliance in this area. It increasingly draws on cross-border data sharing, land registry records, and financial reporting to identify non-resident landlords who have not declared their rental income. Once identified, the CRA can freeze remittances, assess retroactive tax, and apply penalties — even if the rental income has already been transferred overseas.

On the operational side, a formal power of attorney or property management agreement should be executed to authorise your agent to sign documents, communicate with provincial tenancy authorities, and respond to emergency maintenance situations on your behalf. There are no Canadian restrictions on transferring rental income abroad once tax obligations have been satisfied, though banking arrangements and international transfer costs are worth factoring in. Always seek advice from a Canadian tax adviser and a licensed property manager with experience working alongside non-resident property owners.

Frequently Asked Questions

Can a non-resident own and let property in Canada?

Yes. Non-residents face no prohibition on owning and letting residential property in Canada, though foreign buyers are subject to the federal Foreign Buyer Ban, which applies to certain residential property purchases and includes some exemptions for rental properties — current rules should be verified with a Canadian lawyer. Non-resident landlords must comply with federal withholding tax obligations under Part XIII of the Income Tax Act, including the 25% withholding on gross rental income (as of 2025), and appointing a Canadian-resident agent to manage compliance is strongly recommended.

Do I need a local agent to let my property in Canada?

There is no legal requirement to use a local agent for long-term residential letting in most provinces. For non-resident landlords, however, engaging a Canadian-resident property manager is strongly advisable — and in practice near-essential — as the agent can serve as your authorised representative with the CRA, handle non-resident withholding tax remittances, manage tenants day to day, and liaise with provincial tenancy authorities on your behalf. Failure to withhold and remit tax correctly can attract significant CRA penalties.

How is rental income taxed if I live outside Canada?

Non-resident landlords are subject to a 25% withholding tax on gross rental income under Part XIII of Canada’s Income Tax Act (as of 2025). By filing Form NR6 and electing under Section 216 of the Income Tax Act, it is possible to reduce this to a withholding on net rental income after allowable expenses, which is generally more favourable. Canada’s tax treaties with numerous countries may also reduce the standard 25% rate — the CRA or a qualified Canadian tax adviser can clarify what applies in your specific situation.

What is the Underused Housing Tax, and does it apply to me as a foreign landlord?

The Underused Housing Tax (UHT) is an annual federal tax targeting certain residential properties held by non-Canadian citizens or non-permanent residents. As of 2025, the UHT rate is 1% of the property’s assessed value per year. Landlords renting their property to arm’s-length tenants are likely eligible for an exemption from the tax itself, but must nonetheless file a UHT return by 30 April of the following year to formally claim that exemption. Penalties can apply for failing to file even where no tax is ultimately owed. Confirm current rules with the CRA and a qualified tax adviser.

Are short-term rentals like Airbnb allowed in Canada?

Short-term rentals are lawful throughout Canada, but they are governed by an intricate and rapidly evolving mosaic of provincial and municipal regulations. In British Columbia, hosts are required to register with the provincial short-term rental registry (mandatory from May 2025) and must comply with a principal residence requirement in larger municipalities. In Ontario, regulation is largely delegated to municipalities — both Toronto and Ottawa, for example, require STR licences and impose municipal accommodation taxes on bookings. From the 2024 tax year onwards, the CRA denies expense deductions for non-compliant short-term rentals. Always check current requirements with your provincial and municipal authority before listing a property.

Is there rent control in Canada?

Rent control exists in a number of provinces but not across the board. As of 2025, Ontario caps annual rent increases for most existing tenants at 2.5%, British Columbia caps them at 3%, and Nova Scotia has a temporary cap of 5.8% in place until 31 December 2025. In provinces such as Alberta, Saskatchewan, and Newfoundland, there is no cap on the size of rent increases, though rules on frequency and notice requirements still apply. Landlords are generally free to set any initial rent when beginning a new tenancy, even in provinces with rent control. Annual guidelines are updated each year and should be confirmed with the relevant provincial tenancy authority.

What notice do I need to give a tenant to end a tenancy in Canada?

Required notice periods vary by province, tenancy type, and the grounds on which the tenancy is being ended. In Ontario, most landlord-initiated notices for lease breaches such as non-payment of rent require at least 20 days, while notices based on owner occupancy typically require 60 days. In British Columbia, notice periods range from 10 days for non-payment of rent to four months where the landlord or a family member intends to occupy the property. In Alberta, a landlord must give three months’ notice to end a periodic tenancy where no specific grounds are cited. Non-resident landlords are strongly advised to take legal advice before serving any notice, given the complexity of provincial rules and the potential consequences of an invalid notice.

Can a tenant refuse a rent increase in Canada?

In most provinces, a tenant cannot unilaterally reject a rent increase that falls within the permitted annual guideline — the landlord simply serves the required written notice with the appropriate advance period (typically two to three months, varying by province), and the increase comes into effect. Québec operates differently: both parties must agree to any rent increase, and where a tenant refuses, the landlord may bring an application before the Tribunal administratif du logement (TAL), which may still sanction the increase. Where a landlord seeks to raise rent above the provincial guideline without the necessary approval, the tenant is entitled to challenge this through the relevant provincial tenancy authority.