Is Airbnb still worth it in Kawartha Lakes?

New checkout rules, licensing fees and tax obligations are changing the economics of cottage rentals — and raising questions about what owners and communities gain.

For years, the arrangement seemed simple enough: Rent out the family cottage when nobody was using it, collect income to help cover the bills and ask guests to leave the place reasonably clean. 

Now even doing the dishes is part of the debate. 

Airbnb announced Oct. 20 that, for bookings made starting Nov. 20, hosts generally cannot require guests to wash and put away dishes, strip beds, start laundry or take garbage off-site. The company says chores normally performed by cleaners should not be imposed on travellers, particularly those already paying cleaning fees. 

The changes reach beyond housekeeping. Airbnb is also limiting separate rental agreements and prohibiting host-imposed fines, potentially affecting owners accustomed to setting their own terms for cottage stays. 

For Kawartha Lakes property owners, the announcement adds another consideration to licensing, insurance, maintenance and financing costs. It raises a larger question: When is a shortterm rental worth operating? 

From family cottage to business 

Cottage rentals range from modest cabins used by their owners for much of the summer to large waterfront properties operated primarily for paying guests. Those arrangements have very different economics. 

A family that bought its cottage decades ago may rent a few weeks to offset expenses. An investor with a large mortgage may depend on bookings to meet monthly payments. Both must account for the costs of operating legally. 

Under Kawartha Lakes’ short-term rental accommodation bylaw, properties rented for stays of fewer than 28 consecutive days generally require a municipal licence. 

When the licensing program began in 2023, an annual unhosted licence cost $1,500. The published 2026 fee is $1,750, an increase of $250, or about 17 per cent. A six-month unhosted licence costs $875. Hosted licences cost $400 annually or $200 for six months. A hosted property is one where the owner lives on-site during the rental. 

For someone renting a cottage only a handful of weeks each year, the licence alone can consume a meaningful share of the income. 

And that is before the first guest arrives.

The cost of compliance 

The city requires at least $2 million in liability insurance covering short-term rental use, along with compliance with applicable fire and building requirements. Operators must provide property documentation and address matters such as alarms, occupancy, parking and septic systems. 

Waterfront properties can bring additional expenses for dock maintenance, waste disposal and access during emergencies. Owners who live elsewhere also need arrangements to deal with guest problems and neighbourhood complaints. 

Municipal occurrence inspection fees rise with repeated incidents: $121 for the first, $245 for the second, $490 for the third and $975 for the fourth. These are separate from licence fees, not charges every owner automatically pays. 

The rules are meant to protect guests and neighbours. They also make clear that running a rental involves more than posting photographs online and handing over the keys. 

A tax risk beyond the licence fee 

Federal tax rules add another consequence for operators who fail to comply with local requirements.

For tax years after 2023, the Canada Revenue Agency generally denies income-tax deductions for rental expenses attributable to periods when a shortterm rental is non-compliant with applicable licensing or registration rules. An operator could therefore earn rental revenue while losing deductions that would otherwise reduce taxable income. 

The duration of non-compliance matters. So does the distinction between municipal rules governing stays shorter than 28 days and the federal incometax definition of a short-term rental, which generally covers stays shorter than 90 consecutive days. 

There is also the harmonized sales tax. Generally, operators exceeding $30,000 in taxable revenue over four consecutive calendar quarters must register for GST/HST, subject to the applicable rules. Platform collection arrangements do not eliminate the need to understand one’s own obligations. 

These are potentially more consequential costs than an extra cleaning visit. 

Revenue is not profit 

Consider an illustrative three-bedroom cottage generating $36,000 a year in accommodation revenue.

That sounds substantial until the expenses are counted: licensing, insurance, property taxes, heating, electricity, internet, cleaning, platform commissions, repairs and maintenance. Waterfront owners may also face septic work, dock repairs, landscaping and snow removal. 

If annual operating costs total $18,000, the property produces $18,000 before mortgage payments and income taxes. Add $16,000 in mortgage payments and the remaining annual cash is $2,000. A major repair could erase it. 

This is a hypothetical calculation, not a verified average for Kawartha Lakes. It excludes any separately collected cleaning fees and assumes the stated expenses capture the relevant operating costs. Individual results depend on rates, booked nights, debt, property condition and how much work owners do themselves. 

Cash flow is not the same as investment return: Mortgage principal payments build equity, and property values can rise or fall. A mortgage-free family cottage may be financially comfortable with relatively few bookings, while a heavily financed investment property could struggle despite considerable gross revenue. 

The example makes one point clear. Revenue is not what the owner takes home. 

More than dirty dishes 

Airbnb’s checkout policy reflects changing expectations about what guests should do before leaving. 

Hosts can still make reasonable requests, such as placing used dishes in the sink, gathering towels or separating waste into designated indoor bins. Airbnb says local circumstances may justify exceptions, including wildlife-resistant garbage containers. Rules and requests must be disclosed before booking; hosts cannot add new obligations afterward through messages or signs.

For cottages with limited waste collection, small laundry facilities or tight changeover schedules, cleaners may need more time. Owners may respond by adjusting prices, stocking extra linens or changing turnover arrangements. 

The restrictions on contracts may matter just as much. Under Airbnb’s updated policy, hosts generally cannot require a separate rental agreement unless an exception applies, such as a legal requirement, an optional amenity, a stay of at least 28 nights or a Luxe listing. Airbnb also restricts host-imposed fines and directs damage disputes toward its established procedures. Its AirCover protections have conditions and exclusions; they are not a blanket guarantee against every loss. 

Those changes apply to reservations booked through Airbnb under the new policy, not automatically to Vrbo, other cottage-rental websites or direct bookings. Municipal and tax requirements continue to apply regardless of booking channel. 

The community’s stake 

The benefits and costs extend beyond the property line. 

Visitors spend money at restaurants, grocery stores, marinas, shops and attractions. Cottage rentals create work for cleaners, landscapers, tradespeople and property managers. That activity matters in a tourism-oriented region. 

But neighbours may experience noise, parking problems, garbage and frequent turnover. Housing effects are harder to measure. A year-round home converted to tourist accommodation may reduce the supply available to permanent residents. A seasonal cottage unsuitable for year-round living is a different case. 

An online listing count cannot, by itself, establish how many homes have been removed from long-term housing.

What the city knows 

A report presented to Kawartha Lakes council in December 2024 identified about 422 short-term rental licences issued by the end of October that year, with another 278 locations being tracked for possible licensing or compliance concerns. 

Those are historical figures, not a current count. Council also sought information about staff time and departmental costs associated with the licensing program. 

Updated figures and the program’s full cost accounting would help residents assess whether licence revenue covers oversight and whether enforcement is improving safety and neighbourhood conditions. Without that information, neither conclusion should be assumed. 

A changing calculation 

It would be premature to declare short-term rentals unprofitable across Kawartha Lakes. A popular waterfront property with little debt and steady bookings can have very different prospects from a recently purchased cottage carrying large financing costs. 

Owners also have different goals. Some seek a commercial return. Others simply want enough rental income to keep a family property they might otherwise have to sell. 

The larger shift is in expectations. Guests want convenience. Municipalities expect compliance. Neighbours want consideration. Owners need revenue sufficient to cover the work and risk. 

Airbnb’s new dishwashing rule may be the most visible change, but licensing, taxes, contracts and operating expenses may have a greater effect on the bottom line. 

For anyone thinking of renting out a cottage, the crucial calculation is no longer just what a summer weekend can earn. 

It is what remains after the bills are paid, the guests have gone home and somebody else has done the dishes.