Collingwood reversed course on short term rentals in November 2024. After years of effectively prohibiting them, Town Council passed By-law 2024-078, which came into force January 6, 2025. The framework is one of the most restrictive in cottage country: investment properties are not eligible, the town wide license count is hard capped at 200, and 14 demerit points triggers revocation with a 6 month application ban.
The headline numbers: 3 license classes (A, B, C) priced from $1,250 to $2,500, principal residence required, 8 guests maximum (children under 13 excluded), 1 year license term, and 4% Municipal Accommodation Tax effective March 1, 2025. Here's the complete breakdown sourced from the actual bylaw.
What Counts as a Short Term Rental?
The definition is shorter than the Blue Mountains' (28 days vs. 30):
"Short-Term Accommodation" means a Dwelling Unit, or any part thereof, that is operating or offering a place of temporary residence, lodging or occupancy by way of concession, permit, lease, licence, rental agreement or similar commercial arrangement for any period of twenty-eight (28) consecutive calendar days or less, throughout all or any part of a calendar year. By-law 2024-078, Section 1 (Definitions)
Stays of 29 or more consecutive nights fall outside the bylaw entirely. They do not need an STR license, but they also cannot be marketed as a short term rental. This is the legal off ramp for properties where Class A/B/C eligibility doesn't fit: pivot to mid term rentals (29+ nights), and you operate outside the licensing regime.
Hotels, motels, tourist camps, boarding houses, lodging houses, and similar commercial accommodation use are explicitly excluded from the STR definition. Bed and breakfasts ARE included (they need a Class A or B license, not a separate B&B class).
Principal Residence Mandatory: The Biggest Restriction
This is the single most important rule in the entire bylaw:
No Person shall own, operate or permit the operation of a Short-Term Accommodation unless the Short-Term Accommodation is located within: (a) the Principal Residence of the Licensee, or (b) an Additional Residential Dwelling Unit located on the same Property as the Licensee's Principal Residence. By-law 2024-078, Section 4.6
And the bylaw defines Principal Residence quite specifically:
"Principal Residence" means (a) the Dwelling Unit owned or rented by a Person, either alone or jointly with others, where the Person ordinarily resides, makes their home, and conducts their daily affairs, including, without limitation, paying bills and receiving documentation related to identification, taxation and insurance purposes, driver's licenses, income tax returns, medical plan documentation, vehicle registration and voter registration, or similar information; and, (b) where the Person has no other property designated as such within the Town of Collingwood or any other jurisdiction. By-law 2024-078, Section 1 (Definitions)
What this means in practice:
- Pure investment properties are out. If you bought a Collingwood condo as a rental, you cannot license it as an STR. The Town will verify principal residence with bills, tax returns, and government identification.
- Out of town owners are out. If you live in Toronto and own a Collingwood cottage, that cottage cannot be licensed. You must ordinarily reside there.
- You can have ONE principal residence anywhere on Earth. The "no other property designated as such ... in any other jurisdiction" clause closes the loophole of claiming Collingwood as principal residence while actually living elsewhere.
- The on-property ADU is the workaround. If your Collingwood principal residence has a legal Additional Residential Dwelling Unit (basement apartment, coach house, secondary suite), you can license THAT for STR use under Class C.
Investment Buyers: Mid-Term Only
If you're buying Collingwood real estate to rent out and you don't intend to live there, your only legal option is mid-term rentals (29+ night stays), which fall outside the STR bylaw. STR licensing is not available to non-resident investors regardless of how compliant the property is otherwise.
Three License Classes
Section 9 of By-law 2024-078 establishes three license classes:
Class A: Guest Room (Partial Unit Rental)
- You rent one or more guest rooms within your principal residence, not the whole house
- Maximum 3 guest rooms available for rent
- At least 1 bedroom must remain for the licensee's exclusive use
- Licensee MUST be on site between 8 PM and 8 AM during any guest stay (except emergencies)
- Maximum stay: 28 days per booking
- Permitted only in single detached dwellings
- Maximum 1 Class A license per licensee
- License fee: $1,250
Class B: Principal Residence (Entire Unit)
- You rent the entire principal residence to one party at a time
- You must still maintain the property as your principal residence (e.g., you stay elsewhere during the rental)
- Maximum stay: 28 days per booking
- Permitted only in single detached dwellings
- Maximum 1 Class B license per licensee
- License fee: $2,250
Class C: Additional Residential Dwelling Unit (Entire Unit)
- You rent an ADU (basement suite, coach house, garden suite) on the same property as your principal residence
- The ADU can be inside the existing principal-residence house OR a detached accessory building
- Licensee must be the registered Owner
- Maximum stay: 28 days per booking
- Maximum 1 Class C license per Owner
- License fee: $2,500
The 200 License Cap and Waitlist
Section 6.1 establishes a hard cap on the total number of STR licenses in town:
After this By-Law comes into force and effect, Licensees may apply for the renewal of their existing Licence. However, no new Licences will be issued until the total number of Licences in the Municipality falls below two hundred (200). For clarity, the total number of Licences shall not exceed two hundred (200). By-law 2024-078, Section 6.1
Once the cap is reached, applications go to a waitlist. When a license becomes available (by non-renewal, revocation, or expiry), the Town contacts the next person on the list and gives them 21 days to submit a complete application. Miss the window and the next person gets the spot.
For comparison: the Blue Mountains has zoning-based restrictions but no town wide cap. Collingwood's cap is the harder constraint of the two systems.
8 Guest Maximum, 2 Per Bedroom
Section 8.3 sets the occupancy ceiling:
The Maximum Occupancy for any Licensed Premises shall be limited to two (2) Persons per approved Guest Room and shall not exceed a total of eight (8) Persons. By-law 2024-078, Section 8.3
And from the definition of Maximum Occupancy:
All Persons on the Premises shall be counted in calculating Maximum Occupancy, with the exception of children under the age of thirteen (13) years. By-law 2024-078, Section 1 (Definitions)
Worked examples:
Children under 13 don't count, so a family of two parents and three kids under 13 in a 3 bedroom rental is fine: 2 adults counted, 4 unused spots, plus kids. But once a child turns 13, they consume an occupancy slot.
Section 4.4 also requires the maximum occupancy to be displayed in every advertisement or listing along with the license number. Failure to do so is a Section 4 violation that earns demerit points.
Insurance + Responsible Person
Two operational requirements that come straight from Schedule B of the bylaw:
proof of insurance with a liability limit of no less than two million dollars ($2,000,000.00) per occurrence for property damage or bodily injury, identifying that a Short-Term Accommodation is being operated on the Property. The insurance coverage shall be endorsed to the effect that the Town shall be given at least thirty (30) days' notice in writing of any cancellation or material variation to the policy. By-law 2024-078, Schedule B, Section 1(d)
And the Responsible Person requirement:
the name and contact information of the Responsible Person who can be contacted within thirty (30) minutes and respond to an emergency or contravention of this By-law or any Applicable Laws, including attendance on site of the Premises within sixty (60) minutes of being notified of the occurrence. By-law 2024-078, Schedule B, Section 1(e)
Two key points: insurance lapse triggers an automatic license suspension under Section 11.1 with no hearing, and the Responsible Person doesn't need to be the licensee (a property manager qualifies). The 30/60 minute response window is similar to the Blue Mountains' 30 minute attend, just split into two thresholds.
Read our Ontario STR insurance guide for providers that meet the $2M plus 30-day-notice clause.
Fire and Electrical Inspections
The application package requires both certificates:
- Fire Code inspection by Town Fire Department under the Ontario Fire Code (Schedule B 1(f), required at application and renewal)
- Licensed electrical contractor certificate dated within the previous 365 days, confirming compliance with Ontario Regulation 164/99 Electrical Safety Code (Schedule B 1(c))
- Property Standards inspection by Town By-law Services for compliance with Property Standards By-law (Schedule B 1(g))
- Site plan and floor plan showing parking, smoke and carbon monoxide alarm locations, fire extinguisher locations, all entrances/exits (Schedule B 1(b))
- Minimum 2A 10BC fire extinguisher mounted on each floor (Section 8.6)
Each Premises must keep a Guest Registry recording check in / out dates, total guests, signed Renter's Code of Conduct, and confirmation that smoke and carbon monoxide alarms were checked between guests (Section 8.7). Records are retained for 2 years.
Demerit Points: Two Thresholds
Collingwood's demerit system has two levels (much tighter than Blue Mountains' single 15 point threshold):
A Licence may be suspended for a period of not longer than three (3) months where: (a) the total number of demerit points in effect is seven (7) or more... By-law 2024-078, Section 16.6
A Licence may be refused or revoked if the total of all demerit points in effect is fourteen (14) or more in accordance with Schedule "A" of this By-Law. Where a Licence has been refused or revoked due to the accumulation of fourteen (14) or more demerit points, no Person shall be entitled to apply for a Licence for the subject Premises for a period of six (6) months from the date of refusal or revocation of the Licence. By-law 2024-078, Section 16.7
Demerit points expire 1 year after they're issued (Section 16.4).
Selected demerit values from Schedule A:
The math: a single Fire Code Order plus one Property Standards Order is 10 points (suspension territory). Add another 5 point conviction and you're at 15, which crosses the revocation threshold of 14. With the 7 point suspension threshold, even a handful of minor convictions can trigger a 3 month suspension.
Fees by Class
From the Town's Fees and Service Charges By-law:
Add insurance ($400 to $1,200 per year for $2M coverage), the licensed electrician inspection ($150 to $300 per visit, valid 365 days), and any re-inspection fees if you fail the first one.
Renewals must be submitted at least 30 days before expiry (Section 5.7). Submit later but before expiry: late fee applies. Submit after expiry: the license is dead and you must apply fresh, which means going back on the 200 cap waitlist if it's full.
4% Municipal Accommodation Tax (Effective March 1, 2025)
The MAT applies to all STR bookings of 28 days or less:
- Rate: 4% on the room rate
- Plus HST: Yes (HST applies on top of the MAT base, per CRA rules on government taxes)
- Stays under 28 days: tax applies
- Stays of 29+ nights: tax does not apply (mid term territory)
- Excluded from base: cleaning fees, food and beverage, internet and phone, room services, meeting rooms
- Applies to: hotels, motels, B&Bs, STRs, inns
If you list on Airbnb or Vrbo, those platforms typically collect and remit MAT for the bookings they handle: confirm in your platform settings before assuming it's automatic. For direct bookings, Nurture or any STR operator must collect and remit directly to the Town.
Fines and Penalties
Section 19 sets the maximum fines:
Section 19.13 also makes a Platform listing or public advertisement legally sufficient evidence that a property is being rented or offered as STR. So if your listing is up but you don't have a license, that's prima facie proof of operating without a license.
Staying Compliant in Collingwood
Collingwood's framework is more restrictive than most cottage country municipalities. Here's how to stay clean:
- Confirm principal residence eligibility before applying. Either you live in the property, or it's an ADU on your principal residence land. Investment properties don't qualify, and the Town will request documentation to verify.
- Get on the 200 license waitlist early. If the cap is reached, you have no option but to wait. Apply early in the year if a license is currently available, and plan for delays if you're behind on the list.
- Pick the right class. Class A is the cheapest ($1,250) but requires you on site at night. Class B is mid-priced ($2,250) for whole-house rentals. Class C is most expensive ($2,500) but most flexible if you have a legal ADU.
- Know the 28-day limit per booking. Bookings of 29+ days fall outside the bylaw entirely, but you cannot mix STR bookings and longer ones on the same listing without separating them.
- Track your demerit balance. 7 points = 3 month suspension. 14 points = revocation + 6 month application ban. Demerits expire 1 year after issuance, but a single Fire Code or Property Standards order is 5 points: it adds up fast.
- Get electrical inspection certificates valid 365 days, not 90. Unlike Blue Mountains' 90 day window, Collingwood gives a full year. Plan inspections to align with your renewal cycle.
- Keep insurance current with the 30 day notice clause. Section 11.1 auto suspends the license if insurance lapses. Use a calendar reminder 30 days before expiry, and pick a broker who specializes in STR coverage.
- Display the license number AND Maximum Occupancy on every listing. Section 4.4 requires both on each advertisement. Update Airbnb, Vrbo, your direct site, and any social media posts.
- Renew at least 30 days before expiry. Late renewal adds 20% fee. Past expiry, you must reapply from scratch (and may go back on the cap waitlist).
- Have every guest sign the Renter's Code of Conduct. Each violation adds demerits. Keep signed copies in your Guest Registry for 2 years.
Official Town of Collingwood Resources
Always verify current rules with official sources before making host decisions:
Official Links
- By-law 2024-078 (full PDF, 28 pages)
- Short Term Accommodations licensing page
- B&B and STA Less Than 30 Days info page
- Frequently Requested By-laws directory
- Application portal: Cityview Public Portal (cvportal.collingwood.ca/portal)
- Phone: 705-445-1030
- Email: bylaw@collingwood.ca
Common Questions From Collingwood Hosts
Can I run an Airbnb investment property in Collingwood?
No. Section 4.6 of By-law 2024-078 restricts STR licenses to either the licensee's principal residence or an Additional Residential Dwelling Unit on the same property as their principal residence. Pure investment properties (a separate house you don't live in) cannot be licensed. This is the single biggest restriction in the bylaw.
Is there a cap on licenses?
Yes. Section 6.1 limits the total to 200 licenses town-wide. New applications go on a waitlist when the cap is reached. When a license becomes available, the next person on the waitlist gets 21 days to submit a complete application or they're removed from the list.
How much does the license cost?
It depends on the class: $1,250 for Class A (Guest Room rental), $2,250 for Class B (entire principal residence), $2,500 for Class C (Additional Residential Dwelling Unit). $500 is due at application; the balance is due before the license is issued. Plus a 20% late fee if you renew within 30 days of expiry.
What's the maximum guest count?
Section 8.3 caps occupancy at 2 guests per bedroom and a total of 8 guests, regardless of how many bedrooms you have. Children under 13 don't count toward the cap. So a 5 bedroom home is still capped at 8 guests, not 14.
How long is the license valid?
Section 7.6(a) sets the license term at 1 year from the date of issue. You must submit your renewal application at least 30 days before expiry to avoid the 20% late fee. Late renewals after expiry require a brand new application.
How many demerit points before I lose my license?
Section 16 sets two thresholds: 7 demerit points triggers a suspension of up to 3 months (Section 16.6), and 14 demerit points can trigger revocation (Section 16.7). Demerits expire 1 year after they're issued. If your license is revoked at 14+ points, you cannot reapply for the same property for 6 months.
Can guests stay longer than 28 days?
Not under an STR license. The bylaw defines Short-Term Accommodation as any stay of 28 consecutive calendar days or less. Stays of 29+ nights fall outside the regulation entirely (mid-term rental territory) and don't need an STR license, but also can't be sold as one.
Do I need to be on-site during guest stays?
Class A only. Section 9.2(g) requires a Class A licensee (Guest Room rental within their principal residence) to be on site during the hours of 8:00 PM and 8:00 AM, except in case of emergency. Class B and Class C licensees do not have this requirement, but they still need a Responsible Person available 24/7.
What's the Municipal Accommodation Tax?
Effective March 1, 2025, accommodators must collect and remit 4% MAT (plus HST) on the room rate for stays of 28 days or less. The tax applies to STRs, hotels, motels, B&Bs, and inns. The tax base excludes cleaning fees, food, internet, and other services: room rate only.
This article quotes verbatim from By-law 2024-078 of the Corporation of the Town of Collingwood (passed November 18, 2024, in force January 6, 2025) and is current as of May 2026. The Town can amend the bylaw and adjust fees: confirm current values directly with the Town before making investment decisions. This article is informational and does not constitute legal advice.
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