A Toronto garden suite can be Airbnb'd only if it is your principal residence. If you live in the main house and want to short-term rent the garden suite, you cannot. Toronto Municipal Code Chapter 547 (amended May 23, 2024 by By-law 503-2024) treats a garden suite as a separate dwelling unit, and an operator may hold only one principal residence at a time. The May 2024 amendment closed any room to argue otherwise.
The Bottom Line, Up Front
Four scenarios most owners ask about. Three of them are not allowed.
What Is a Garden Suite Under Toronto's Rules
Garden suites became permitted citywide in most residential zones on February 2, 2022, when Toronto City Council adopted the Garden Suites Official Plan Amendment and Zoning By-law Amendment. The zoning bylaw definition (Toronto Zoning By-law 569-2013, § 150.7) describes a garden suite as a self-contained living accommodation in an ancillary building that does not abut a public laneway, located typically in the rear yard of a property and smaller than the main house.
That zoning definition is what got the structure approved and built. The relevant document for short-term rental registration, however, is the licensing bylaw, Toronto Municipal Code Chapter 547. That's where the 2024 amendment matters.
The Rule That Decides Everything: Dwelling Unit Definition
Chapter 547's defined terms include this:
"DWELLING UNIT – Separate or self-contained living accommodation for a person or persons living together as a single housekeeping unit in which both food preparation and sanitary facilities are provided for the exclusive use of the occupants of the unit and includes, for the purposes of this Chapter, a secondary suite, laneway suite, garden suite, or similar accommodation." Toronto Municipal Code § 547-1.1, amended 2024-05-23 by By-law 503-2024
The "and includes" language is doing the work. Before May 2024, a homeowner with a garden suite could argue the suite was "part of" their main residence. The amendment removed that argument by explicitly listing garden suites as their own dwelling units.
Now read the principal residence definition:
"PRINCIPAL RESIDENCE – The dwelling unit where an operator ordinarily resides. For clarity, an operator's principal residence shall not include more than one dwelling unit." Toronto Municipal Code § 547-1.1, amended 2024-05-23 by By-law 503-2024
And the operating rule:
"No operator shall rent or advertise a property for short-term rental unless it is the operator's principal residence at that time." Toronto Municipal Code § 547-4.2.B
String those three together: a garden suite is a dwelling unit. An operator's principal residence is one dwelling unit. STR is only allowed in the operator's principal residence. Therefore, an owner can short-term rent the garden suite or the main house, but not both, and only if the chosen one is where they actually live.
The City's published operator guidance says exactly this:
"You can short-term rent a garden suite only if you are the principal resident of the suite (the portion of the dwelling where you live)." City of Toronto, Short-Term Rental Operators page
Why the May 2024 Amendment Closed This
Before By-law 503-2024 came into force on June 30, 2024, the bylaw did not name garden suites or laneway suites in its dwelling unit definition. That left an interpretive gap. Some operators argued a backyard garden suite on the same lot as the main house was an extension of the principal residence, similar to how a finished basement room within the main dwelling can be rented under partial unit registration.
Toronto's Planning and Housing Committee report, "Short-Term Rental By-law Implementation Update" (April 2024), explicitly identified the gap: enforcement staff were finding listings of secondary suites, laneway suites, and garden suites by operators living in a different unit on the same property. The bylaw amendment, adopted on May 23, 2024, added the express list of "secondary suite, laneway suite, garden suite, or similar accommodation" to the dwelling unit definition.
It also tightened the principal residence definition: "an operator's principal residence shall not include more than one dwelling unit." That language alone disposes of the "I have two homes on one lot" argument.
The Four Scenarios in Detail
Scenario 1: You live in the main house, you Airbnb the garden suite
Not allowed. The garden suite is a separate dwelling unit (§ 547-1.1) and is not your principal residence. § 547-4.2.B prohibits short-term rental of any property that is not the operator's principal residence. § 547-4.B disqualifies an applicant who already holds another registration, so you cannot register both. § 547-4.D disqualifies a second operator from registering a dwelling unit that already has an active registration.
This is the configuration most homeowners have in mind when they build a garden suite for rental income, and it is precisely the case the May 2024 amendment was written to prevent.
Scenario 2: You live in the garden suite year round, you Airbnb the garden suite when you travel
Allowed, with two limits. You register the garden suite as your principal residence and operate it as an entire unit short-term rental under § 547-4.1.1. The 180 night per calendar year cap applies (§ 547-4.1.1.D). The City may ask for evidence that the garden suite is genuinely your principal residence (driver's licence, CRA Notice of Assessment, utility bills) under § 547-4.1.B(6) and § 547-4.1.B(6.1).
This works for empty nesters who have downsized into the garden suite and rent the smaller footprint occasionally, or for owners who built the garden suite to live in while their adult children occupy the main house.
Scenario 3: You live in the garden suite, you Airbnb the main house
Not allowed. Same logic as Scenario 1, in reverse. The main house is a separate dwelling unit, and even though you own both, you can register only the dwelling unit you ordinarily reside in (§ 547-4.2.A: "an operator shall be deemed to have only one principal residence at any time"). The main house, once empty of you, is an investment property under the bylaw, and investment properties are not eligible.
Scenario 4: You own the property, you live elsewhere
Not allowed. Toronto's STR registration is restricted to principal residence operators. If neither the main house nor the garden suite is where you ordinarily reside, neither one can be registered. The legal options are conventional long term rentals (12 months or more) or mid term furnished rentals of 28 nights or longer (which fall outside the STR definition under § 547-1.1).
"Can I Just Claim the Garden Suite Is My Principal Residence?"
This is the question that comes up in every real estate forum and every condo board meeting. The honest answer: legally, principal residence is a fact, not a designation, and the City requires evidence.
§ 547-4.1.B(6) requires every applicant to submit "Government issued identification that is satisfactory to Municipal Licensing and Standards to demonstrate the short-term rental is the operator's principal residence." § 547-4.1.B(6.1), added in May 2024, lets the City demand "at least two additional documents that are satisfactory" on request.
The kinds of evidence the City accepts (per the operator page) include:
- Ontario driver's licence or Ontario photo card listing the address
- CRA Notice of Assessment showing the address
- Utility bill (hydro, gas, water, internet) at the address
- Vehicle registration
- Home insurance policy
- Lease or property tax bill
- Bank or credit card statements at the address
If your driver's licence is at the main house, your tax filings show the main house, your auto insurance lists the main house, and the garden suite has no personal effects, claiming the garden suite is your principal residence will not survive an audit. § 547-4.2.C requires you to provide that evidence within 10 days of being asked, and the Executive Director of MLS decides whether it is "satisfactory." A 2025 update added the City's authority to conduct annual in person inspections of all registered short-term rentals.
Penalties For Operating an Unregistered Garden Suite STR
Section 547-5.3 sets out the offence penalties:
"Every person who contravenes any provision of this chapter is guilty of an offence and on conviction is liable to a fine not exceeding $100,000, if no other penalty is provided ... [where] an offence under this chapter is liable to a special fine, in an amount the court deems appropriate, designed to wipe out any economic benefit gained from the contravention ... [where] an offence under this chapter is liable to a fine not to exceed $10,000 for each day during which the offence continues." Toronto Municipal Code § 547-5.3
The economic benefit fine is the one operators tend to overlook. If the City proves you grossed $40,000 from an unregistered garden suite STR, the court can order that amount disgorged on top of the base fine. § 547-2.12 also bars an operator whose registration is finally refused or revoked from reapplying for one year, and bars another operator from registering the same dwelling unit for a year, unless the unit has been sold.
What You CAN Do Legally With a Garden Suite
If you live in the main house and built the garden suite for income, three options are open:
1. Mid term furnished rental, 28 nights or longer
The Chapter 547 short-term rental definition is "All or part of a dwelling unit ... used to provide living accommodation for a rental period of less than 28 consecutive days in exchange for payment" (§ 547-1.1). A 28 night minimum sidesteps the bylaw entirely. No registration, no 180 night cap, no Municipal Accommodation Tax (MAT applies only to stays under 28 nights under Chapter 758).
Demand for furnished mid term rentals in Toronto is meaningful: insurance displacement guests during a renovation or fire claim, traveling nurses on 13 week contracts, corporate relocations, film production crews. Monthly rates for a furnished one bedroom garden suite typically run $2,800 to $4,200 depending on neighbourhood.
2. Standard 12 month long term rental
A garden suite under a residential tenancy is governed by Ontario's Residential Tenancies Act, 2006. Long term rents in Toronto for a furnished or unfurnished one bedroom garden suite typically run $2,000 to $3,200 per month. You give up the upside of nightly pricing but you also lose the operating costs of an STR (cleaning, supplies, listing management).
3. Move into the garden suite yourself
If the garden suite is genuinely where you live, you can register it as an entire unit STR (180 night annual cap) or partial unit STR (no night cap, but bedroom limits apply since most garden suites are one bedroom). The main house then becomes whatever you choose: family use, long term rental to a tenant, etc. This is the only configuration that lets you Airbnb a backyard suite as the structure was actually built.
The Basement Suite Parallel
The garden suite question is the same legal question as the basement secondary suite question, and Toronto has more enforcement history on the basement side. A June 2024 Ricochet Media investigation identified dozens of Toronto Airbnb listings in which hosts openly described living upstairs while renting the basement secondary suite below, prompting the City to investigate.
The May 2024 bylaw amendments came in response to exactly this kind of pattern. The City's published operator page, in the same paragraph that sets the garden suite rule, makes the basement parallel explicit: "you can short-term rent your secondary suite only if it is your principal residence (the portion of the dwelling where you live)."
If you are considering a "live upstairs, Airbnb the garden suite" plan because "lots of people seem to be doing it with basements," remember two things. First, "lots of people seem to be doing it" is not a legal defence. Second, the City has spent two years building the audit and inspection capacity to find these listings systematically. The combination of registration data, platform data sharing under § 547-3, and annual inspections has narrowed the gap between what the bylaw says and what enforcement covers.
Frequently Asked Questions
Can I rent my garden suite on Airbnb if I live in the main house?
No. Toronto Municipal Code Chapter 547 treats a garden suite as a separate dwelling unit (§ 547-1.1, amended May 23, 2024 by By-law 503-2024). An operator can only register their principal residence, and an operator may have only one principal residence at a time (§ 547-4.2.A). The City's published guidance is explicit: 'You can short-term rent a garden suite only if you are the principal resident of the suite (the portion of the dwelling where you live).'
What if I live in the garden suite and rent the main house on Airbnb?
Same rule, opposite direction. If the garden suite is your principal residence, the main house is a separate dwelling unit that is NOT your principal residence, so you cannot register it for short-term rental. You may register only the dwelling unit where you ordinarily reside (§ 547-1.1 PRINCIPAL RESIDENCE definition), and you can hold only one registration at a time (§ 547-4.B).
Can I switch my principal residence to the garden suite so I can Airbnb the main house?
In theory yes, in practice the City requires evidence. § 547-4.1.B(6) requires government issued ID demonstrating the registered unit is your principal residence. § 547-4.1.B(6.1) lets Municipal Licensing and Standards request 'at least two additional documents' satisfactory to them: utility bills, CRA Notice of Assessment, lease, vehicle registration, insurance. § 547-4.2.C requires you to provide that evidence within 10 days of being asked. Annual in person inspections of registered short-term rentals began in 2025. If your driver's licence, tax filings, and bills point to the main house, claiming the garden suite as your principal residence will fail the test.
Are garden suites, laneway suites, and basement secondary suites treated the same?
Yes. The DWELLING UNIT definition added in May 2024 lists them together: 'a secondary suite, laneway suite, garden suite, or similar accommodation' (§ 547-1.1). All three count as separate dwelling units for short-term rental registration. The same one principal residence per operator rule applies to all of them.
What's the legal alternative if I can't STR my garden suite?
Two paths. First, mid term rentals of 28 nights or more are exempt from Chapter 547 because the bylaw defines a short-term rental as a stay of 'less than 28 consecutive days' (§ 547-1.1 SHORT-TERM RENTAL definition). Furnished monthly rentals to insurance displacement guests, traveling nurses, corporate relocations, and contractors are legal in a garden suite without STR registration. Second, a standard 12 month long term rental (Residential Tenancies Act applies) is unrestricted.
Can my tenant who lives in my garden suite operate an Airbnb out of it?
From the City's standpoint, possibly. Toronto does not verify landlord consent before issuing registration. The tenant would need the garden suite to be their principal residence, would need to be the registered operator, and would need to comply with all bylaw provisions. From your standpoint as the landlord, almost every standard residential lease prohibits subletting and short-term rentals without written consent. You can refuse permission, and if your tenant proceeds anyway, that's typically grounds for an N5 notice.
What happens if I run an unregistered garden suite STR?
Section 547-5.3 of the Municipal Code sets out the penalties: a fine not exceeding $100,000 per offence, a special fine the court may impose to 'wipe out any economic benefit gained from the contravention,' and where the offence continues, a fine not exceeding $10,000 for each day the offence continues. § 547-2.12 additionally bars the operator from reapplying for one year after a final refusal or revocation.
Did the City actually enforce this against garden suite hosts?
Toronto's compliance focus has been on the broader category of secondary suites, with the same legal logic. A June 2024 Ricochet Media investigation identified dozens of Toronto Airbnb listings where hosts described living in the main house while renting basement suites, which is the same bylaw violation as renting a garden suite while living elsewhere. The City responded with the May 2024 bylaw amendments explicitly clarifying the dwelling unit definition. Annual inspections of registered units began in 2025.
Does the registration fee, the 180 night cap, or the 8.5% MAT apply differently to garden suites?
No, a garden suite STR is treated like any other entire unit registration. Registration fee is $390 for 2026. If you register as entire unit, the 180 nights per calendar year limit applies under § 547-4.1.1.D. Municipal Accommodation Tax is 8.5% on stays under 28 nights from June 1, 2025 to July 31, 2026, then reverts to 6%. Airbnb and Vrbo collect and remit it on platform bookings.
Can I build a garden suite specifically as an Airbnb investment?
Building one is fine and the zoning permits it citywide in most residential zones (Toronto Zoning By-law 569-2013, § 150.7, adopted February 2, 2022). Operating it as a short-term rental while living elsewhere is what the bylaw prohibits. If you build a garden suite intending to short-term rent it, the legal use is either: you move into the garden suite and make it your principal residence, then STR it, OR you keep living in the main house and rent the garden suite for 28 nights or longer at a time. Many garden suite owners pivot to mid term furnished rentals for this reason.
This article is for informational purposes only and does not constitute legal advice. Bylaw and regulation details change. Always verify current rules directly with the City of Toronto and confirm with a qualified professional before making hosting decisions.
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