In addition to local laws, it is important to consider provincial legislation such as that concerning:
- residential tenancies
- fire protection and prevention
- hotels and tourist establishments
- municipalities in general and Ottawa in particular
- accessibility for those living with disabilities.
Furthermore, federal legislation may apply – pay special attention to the Income Tax Act to avoid nasty surprises, some of which may be significant and apply retroactively.
Moreover, cases on which judges have made court rulings interpret, and add to, all of the legislation above. You must know how they affect your particular situation.
Depending on your location in Canada, some consequences of running an illegal STR could include:
1. being charged with offences under applicable legislation, which leads to legal costs, a quasi-criminal record, and high fines or other (worse) penalties
2. triggering tax audits into whether you have claimed your rental income, whether you have registered for applicable taxes chargeable to the tenant, and whether you have collected and submitted all applicable taxes
3. being denied insurance coverage if something goes wrong, if your insurance does not cover running a business
4. losing your full capital gains tax exemption when you sell your house.
If you are charged with an offence, or under governmental investigation or audit, I can help you. Call me at 613.203.4874. Visit my main website by clicking here.