Since May 1, 2024, a short-term rental in any BC municipality with more than 10,000 people can only be run out of the home you live in, plus one secondary suite or laneway home on the same property. That is the Short-Term Rental Accommodations Act, and it took the investor-owned Airbnb condo off the table in Kelowna, Kamloops, Vernon and Penticton. Mountain resorts such as Big White, Sun Peaks and Silver Star are exempt at the provincial level, as are municipalities under 10,000 that sit more than 15 kilometres from a larger one, though local bylaws still apply. Separately from the law, most lenders have never counted Airbnb revenue when qualifying a mortgage, and that has not changed. If the plan was a nightly-rental condo financed on its own income, read this before you offer.
What the principal-residence rule does and does not allow
In a city over 10,000 you can list your own home, or a suite on the same property as your own home, on a nightly basis, subject to the city’s business licence and zoning. You cannot buy a second condo and run it as a short-term rental. The rule is provincial, so it applies in Kelowna’s former short-term rental zones as much as anywhere else; the city no longer has the power to exempt them. Fines and a provincial registry back it up. Resort areas on the regulation’s schedule, and small municipalities away from larger centres, keep the old ability to rent nightly, which is why the resort towns have their own guide in this series.
How lenders treat short-term rental income
A lease is a contract with a number on it; a nightly rental is a forecast. Most A lenders qualify a rental purchase on a signed lease or a market-rent letter for a long-term tenant, and they give short-term revenue no weight at all. A minority will use short-term income if you can show two years of it on your tax returns as net rental income, and they apply a haircut to what they see. The result is the chart below: a condo leasing at $2,400 counts for $1,200 or $2,400 depending on the rulebook, while $4,000 of gross Airbnb revenue counts for nothing at most banks. Buy on the lease math and treat any nightly premium as upside, never as the thing that qualifies the file.
The taxes that arrive with the property
Three provincial taxes touch a rental you do not live in. The speculation and vacancy tax rises for the 2026 tax year to 1% of assessed value for Canadian citizens and permanent residents and 3% for foreign owners; a property rented to a long-term tenant for at least six months of the year is exempt, so an empty or short-term-only unit in a taxable region pays it. The BC home flipping tax, in force since January 1, 2025, takes 20% of the gain on a sale inside 365 days, tapering to zero at 730 days. And in Kelowna, a hotel-style short-term rental that is still legal because it is your principal residence collects the provincial sales tax and the municipal and regional district tax on each stay. None of these change your mortgage qualification, but they change the cash flow that was supposed to carry it.
What to buy instead, if income was the point
The properties that still work in the Okanagan cities are the boring ones: a house with a legal suite you live above, a condo leased to a long-term tenant, a duplex where you occupy one side. They qualify on lease income, they are exempt from the speculation tax while tenanted, and the rental income calculator will show you which lender rulebook approves them. If the appeal was a place you use yourself and rent the rest of the year, that is a resort purchase, and the underwriting is different again.
Frequently asked questions
Can I still Airbnb a condo in Kelowna?
Only if it is your principal residence, or a secondary suite on the property where you live. Since May 1, 2024 the provincial principal-residence requirement applies in every BC municipality over 10,000 people, including Kelowna’s previously zoned short-term rental buildings, and the city cannot exempt them.
Which BC resorts are exempt from the principal-residence rule?
Mountain resort areas listed in the provincial regulation, including Big White, Sun Peaks, Silver Star, Panorama and Fernie Alpine Resort, plus municipalities under 10,000 people that are more than 15 kilometres from a larger municipality. Municipal bylaws and strata rules still apply in those places.
Will a lender count my Airbnb income?
Most A lenders will not. A few will use two years of short-term rental income reported on your tax returns as net rental income, with a haircut. Qualify the purchase on long-term lease rent and treat nightly revenue as extra.
Does the speculation and vacancy tax apply to a long-term rental?
No. A property rented to a tenant for at least six months of the calendar year is exempt. The 2026 rates of 1% (Canadian citizens and permanent residents) and 3% (foreign and satellite owners) apply to empty or underused homes in the designated regions, which include Kelowna and West Kelowna.
Keep reading: the investor series
- Resort property mortgages at Big White, Sun Peaks and Silver Star: second home versus rental underwriting on the hill
- Down payment for a rental property in BC: 20% for a pure rental, 5% if you live in one unit
- Rental income mortgage calculator: see which lender rulebook approves your purchase
- Landlord renewals: refinancing to buy the next door: how equity in rental one funds rental two
Run the deal past us before you offer
If the pro forma only works with nightly revenue, it does not work at a bank. Send the listing, the rent you expect and your income picture, and I will show you which lenders qualify it and at what rate, in writing, before you write an offer. Call 250-859-2100 or book a free 30-minute review. No credit pull until you say go, and on standard residential mortgages the lender pays the fee.