Markham’s Airbnb Ban — What Investors Need to Know Before Buying a Condo for Short-Term Rental

If you are considering purchasing a Markham condo or townhome with the intention of running it as an Airbnb or short-term rental, there is a critical piece of information you need to know before you sign anything: short-term rental in Markham is effectively banned. Not discouraged, not restricted, not regulated — banned as a default under the city's current zoning framework, with no permit or licensing pathway available for most properties.

Michael John Lau, Markham’s top REALTOR® and CPA/CMA, is raising this issue clearly and early in every investor conversation because the financial model many condo investors are using — purchase, furnish, list on Airbnb — does not legally work in Markham. Here is the complete picture.

What Markham’s Zoning Bylaw Actually Says

Markham’s Comprehensive Zoning By-law 2024-19, approved by the Ontario Land Tribunal on September 19, 2024 and deemed in force January 31, 2024, does not permit Short Term Accommodations “as of right” in any zone. The use may only be considered on a site-specific basis through a zoning by-law amendment or minor variance application, which requires Council approval and is not guaranteed. Unlike cities such as Toronto, Mississauga, or Vaughan which created licensing frameworks to allow STRs under certain conditions, Markham chose not to create any standard pathway for legal short-term rental operations.

The Double Layer — Markham Zoning Plus Condo Corporation Rules

For condo buyers in Downtown Markham — Gallery Towers, UnionCity, Pangea Condos, Circa I and II — the Airbnb prohibition exists at two independent levels.

First, Markham’s zoning bylaw prohibits short-term accommodations as described above. Second, virtually all Markham condo corporation declarations include additional restrictions on short-term rental use — many explicitly prohibiting rentals of less than six months, one year, or any term that falls outside the definition of long-term residential tenancy. These condo declaration restrictions are independent of the municipal bylaw and are enforced by the condo corporation directly, through fines, legal action, and application to the Condo Authority Tribunal.

An investor who purchases a Gallery Towers unit and attempts to run it as a short-term rental faces enforcement action from the City of Markham under the zoning bylaw and from the condo corporation under the declaration — simultaneously. Neither can be appealed on the grounds that the other permits it.

The Federal Tax Consequence

The 2024 federal government rule denying deductions on non-compliant STRs adds a third layer of financial consequence. The federal government now denies deductions on non-compliant STRs. Since you're operating a non-compliant short-term rental, this rule directly reduces your ability to deduct mortgage interest, condo fees, and other expenses against rental income, materially reducing the after-tax return on the investment.

An investor running an illegal Markham Airbnb faces: zoning bylaw enforcement and fines from the City; condo corporation enforcement and fines; and denial of rental expense deductions from the CRA. The combined financial exposure of this triple enforcement framework makes illegal short-term rental in Markham a genuinely dangerous investment strategy.

What This Means Before You Buy

The due diligence checklist for any Markham condo or townhome investor targeting rental income must include: a review of the city's zoning for the specific address to confirm no STR use is permitted; a review of the condo corporation's declaration and rules for any restrictions on rental term length; and a review of the management rules for the specific building to identify any additional restrictions.

This due diligence should happen before you remove conditions on your purchase — not after. Michael John Lau, Markham’s top REALTOR®, coordinates status certificate review for every condo purchase his clients make, specifically including a review of rental restriction clauses as a standard component.

See the companion blog — The Mid-Term Rental Strategy — for the legal alternative that many Markham condo investors are using to generate above-market rental income while staying on the right side of the rules.

Frequently Asked Questions

Is Airbnb legal in Markham?

No. Under Markham's Comprehensive Zoning By-law 2024-19, short-term accommodations are not permitted as of right in any zone. There is no STR license or registration system available for most properties.

Can I run a short-term rental in a Downtown Markham condo?

No. Investors face a double layer of prohibition: the municipal zoning bylaw bans short-term rentals, and virtually all Downtown Markham condo corporations (like Gallery Towers and UnionCity) have declaration rules explicitly banning rentals under 6 to 12 months.

What are the penalties for running an illegal Airbnb in Markham?

Investors face zoning enforcement and fines from the City, enforcement and fines from the condo corporation, and the federal CRA denial of rental expense deductions for non-compliant short-term rentals.