New Short-Term Rental Rules and Regulations in Nova Scotia

According to a provincial housing needs assessment by the government of Nova Scotia there will be a shortage of 41,200 housing units in the province by 2027/28. 

While most provincial governments have taken steps to offer relief for rental properties by waiving GST and HST on rental housing construction, many like Nova Scotia have also taken steps to crack down on short-term rentals with new rules and regulations. 

In this article, we’ll discuss the new short-term rental rules and regulations in Nova Scotia and how to navigate them and why vacation rentals in Nova Scotia are a good investment.

What Are the New Short-Term Rental Rules and Regulations in Nova Scotia?

Starting September 30, new regulations for short-term rentals will come into play in Nova Scotia. The province is introducing the Short-Term Rentals Registration Act (STRRA) to tackle the growing affordable housing shortage. 

The aim of implementing these rules is to boost the availability of long-term housing across the region. Changes include:

1. New host categories and registration rates

The new regulations establish different categories of hosts. For primary residence STRs rates will depend on the number of rooms, for Commercial STRs rates will vary based on the tier classification.

Primary Residence STR:

This category applies to short-term rentals where the host also lives in part of the space. Hosts will be charged $50 CAD for up to four bedrooms. If five or more rooms are offered the Traditional Tourist Accommodation rate of $150 CAD will have to be paid.

Commercial STR:

This includes any dwelling unit that isn’t the host's primary residence, such as entire homes, condo units, apartments and backyard or secondary suites. These are properties that could otherwise be used as long-term housing but are instead offered as short-term rentals. Below are the Commercial STR rates by Tier:

Tier 1:

Bedford, Beechville, Cole Harbour, Dartmouth, Halifax, Lakeside, Lower Sackville

Rate - 2000 CAD

Tier 2: 

All other communities not in Tier 1 or Tier 3

Rate - 500 CAD

Tier 3:

Town of Clark’s Harbour, Town of Digby, Town of Lockeport, Town of Mulgrave, Town of 

Shelburne

Rate - 240 CAD

2. New registration requirements

When registering a short-term rental property, make sure to have the following information ready:

• The full name of the applicant and the business name (if applicable) for each short-term rental.

• The street address (not a PO Box) for each rental property.

• The number of bedrooms and/or units in each rental.

Hosts will need to include proof that the property meets the required regulations. The specific documents needed will depend on the type of accommodation. 

If the short-term rental is in a primary residence, rented room or bed and breakfast:

Two documents must be provided to show proof of primary residence. Acceptable options include:

• A copy of the host's driver’s license or government-issued photo ID.

• A copy of the host's most recent tax return.

• A copy of the host's most recent property tax bill.

• A copy of the host's current lease agreement.

Any other documentation that verifies the  host's primary residence, if the Minister determines that unique circumstances justify it.

If the short-term rental is in a personal vacation home:

Two documents that prove the short-term rental is not the host’s primary residence (same as above).

If the short-term rental is in a rented location (rental arbitrage model): 

Hosts need to provide proof that they have the property owner's permission via a signed copy of Property Owner Consent Short-term Rental Registration (PDF) form.

If the property is in a condominium: Hosts will need to show proof of the condo board’s permission through a signed copy of Condo Board Consent Short-term Rental Registration (PDF) form.

All properties will also need: 

Hosts must also provide a document from the municipality that confirms the short-term rental or tourist accommodation complies with local land use by-laws. The municipality will specify the required paperwork, so be sure to reach out to them for details.

Note: It's important to understand that the municipality may take some time to process these documentation requests, so it's crucial to begin the process early

3. Requirement for new registration numbers:

Once the application is approved and the fees are paid, hosts will receive a 2024/25 registration number.

This valid registration number is required to operate and list on booking platforms like Airbnb, Booking.com, Expedia and Vrbo starting September 30, 2024.

4. Increased fines for not following the rules:

Operating without a valid registration number is against the law. Starting on September 30, 2024, fines will range from 1000 CAD per violation, to a maximum of 100,000 CAD.

5. Deadline for registration

Official literature from the Government of Nova Scotia states that registration for the 2024/25 season is open and applications should be submitted by September 16 to allow enough time for processing and approvals. 

Registration numbers from the 2023/24 season will no longer be valid after September 30 and platforms like Airbnb and Expedia must also complete their registration by that date.

Why Short-Term Rentals in Nova Scotia Are Great Investments

Short-term rentals have skyrocketed in demand due to the rise of the sharing economy, causing rents to soar in many parts of Canada. Nova Scotia, with its charming coastal towns, rich culture and breathtaking landscapes, offers fantastic opportunities for starting an Airbnb business.

1. Growing tourism industry

With festivals, events and attractions happening year-round, Nova Scotia has become a magnet for visitors, welcoming 2.2 million tourists in 2023 — a 14% increase from the previous year’s 1.9 million. This surge in tourism is great news for anyone thinking about investing in short-term rentals. 

When considering a vacation rental property, hotspots like Halifax offer a fantastic opportunity. You'll be able to tap into the constant flow of tourists and business travelers looking for unique, personalized places to stay.

2. High potential for income

One of the best things about short-term rentals is the potential to earn more rental income than long-term rentals. 

Nova Scotia’s peak tourist seasons, especially in the summer and around the holidays, can be incredibly profitable for property owners. During these times, demand for vacation rentals goes through the roof, which means hosts can charge higher rates. 

Plus, with short-term rentals, you have the flexibility to adjust pricing based on demand and the time of year. Tools like Hostaway’s dynamic pricing tool will also allow you to automate it.

3. Flexibility for personal use

Investing in a short-term rental property has its perks, especially when it comes to personal enjoyment. Even though peak seasons tend to be around the summer and holiday seasons, the party in Nova Scotia is year-round thanks to all the local events and attractions. 

When the property isn’t booked, you can use it yourself, so you’ll have a holiday home at your disposal when it's not booked. This blend of investment and personal use is one of the reasons why short-term rentals are so appealing to many property owners.

Breaking Down Tourism Industry Numbers in Nova Scotia

According to the website of the Government of Nova Scotia, international visitors spent around $641.5 million in tourism expenditures in 2019, $524.8 million in tourism products and $116.7 million in other products.

Perhaps surprisingly, domestic travelers from other provinces brought in even more revenue, spending approximately $823.0 million in 2019, of which $697.7 million were on tourism products and $125.3 million on other products.

As far as employment goes, for locals in Nova Scotia tourism accounted for 4.4% of the total employment in the province. In terms of tourism’s contribution to the GDP, Nova Scotia is the third-highest city after Prince Edward Island and BC.

Navigating the Changing Landscape of Short-Term Rentals in Nova Scotia

As Nova Scotia tightens its regulations on short-term rentals, it's crucial for hosts to stay informed and compliant with the new rules. The province's efforts to address affordable housing shortages through these changes also create a more structured environment for those investing in short-term rental properties. 

By understanding the new categories, registration requirements and potential fines, hosts can continue to benefit from Nova Scotia's thriving tourism industry while ensuring their operations align with the latest regulations. 

The key to success in this evolving landscape will be early registration, thorough documentation and adaptability to the new guidelines.