Kelowna Short-Term Rental Rules 2026: Can You Still Airbnb Here?

On June 1, 2026, Kelowna became the first municipality in British Columbia to opt out of the province's principal-residence requirement for short-term rentals. The change puts 2,196 units across 16 tourism-built properties back in play for whole-home, year-round Airbnb operation, with no requirement that the owner live there. But the exemption is not city-wide. Buy a condo in the wrong building and the old rules still apply, backed by municipal fines of up to $3,000 per infraction per day. This guide walks through the Kelowna short-term rental rules for 2026, building by building, so you know exactly what to verify before you write an offer.

Kelowna Short-Term Rental Rules 2026 at a Glance

1. The provincial baseline: in BC communities of 10,000 or more people, a host may short-term rent only their principal residence, plus one secondary suite or accessory dwelling unit on the same property. The principal residence requirement covers more than 60 communities.
2. Kelowna's exemption: since June 1, 2026, properties rezoned into Kelowna's STR sub-zone are exempt. In those buildings, short-term rental is a permitted principal use, with no owner-occupancy requirement and no night limits.
3. Everywhere else in Kelowna, the principal-residence requirement still applies.
4. Two more gates remain: your strata can still ban short-term rentals entirely, and every host needs a City of Kelowna business licence plus provincial registration.
5. The scale: as of the March 2, 2026 council meeting, 16 properties containing 2,196 eligible units had applied for the sub-zone.

What Changed on June 1, 2026

Under BC's Short-Term Rental Accommodations Act, a community can opt out of the principal-residence requirement only after maintaining a rental vacancy rate of at least 3% for two consecutive years, measured by CMHC data. Kelowna cleared that bar and was the only local government in BC to request an opt-out in 2026. The Province passed a special one-time regulation to accelerate the effective date to June 1, 2026, ahead of the summer tourism season, per the April 2026 provincial release.

Kelowna hosted the 2026 Memorial Cup at Prospera Place from May 22 to 31 and the BC Summer Games from July 22 to 26; the exemption took effect the day after the Memorial Cup ended, catching the balance of the summer season. Every other large BC city, including Vancouver, Victoria and Kamloops, remains under the principal-residence rule.

Why Kelowna Earned the Exemption

CMHC's October 2025 survey put the Kelowna metro vacancy rate at about 6.4%, the highest of any Canadian metropolitan area, up from 3.8% a year earlier. Within the City of Kelowna survey zone the rate was 6.9%, and Rutland reached 7.5%. About 1,300 new rental units were added to Kelowna's rental pool in 2025, and the softness showed on the ground: a new rental building at 285 Dougall Rd. in Rutland sat half unoccupied four months after completion, with landlords offering two months of free rent.

Province-wide, rental vacancy rose from 1.2% in 2023 to 3.5% in 2025, and Kelowna asking rents fell 5.7% year over year, per the Province's April 2026 release. With tenants no longer scrambling for housing, the case against vacation rentals in tourism-built condo towers lost its force.

The STR Sub-Zone: Where Kelowna Short-Term Rental Rules Now Allow Full-Time Airbnb

The exemption applies only to properties rezoned into Kelowna's STR sub-zone. Inside the sub-zone, short-term rental is a permitted principal use: no owner occupancy, no night caps. Outside it, nothing changed.

The first cohort is a restoration, not a free-for-all. All 16 applicant properties were historically licensed as short-term rentals before the provincial rules changed in May 2024, and strata consent was required before a property could apply. Before that change, roughly 700 Kelowna units held principal-use STR licences and about 400 held secondary-use licences. Chief planner Nola Kilmartin told council it was "extremely unlikely" that all 2,196 eligible units would actually operate as short-term rentals, and each host still needs an individual City business licence before taking a booking.

Which Kelowna Buildings Qualify

News coverage of the applications named a recognizable list of tourism-built properties: Sole on KLO, Aqua on Capozzi, Brooklyn and Sole downtown on St. Paul Street, Playa del Sol, Caban, Mission Shores, Pinnacle Point by the Bear and Quail golf courses, Waterscapes, Discovery Bay and Sunset Waterfront Resort on Sunset Drive, plus three stratas in McKinley Beach's CD18 zone.

The clusters map to areas any Kelowna buyer knows: the downtown waterfront on Sunset Drive, the Bernard District, South Pandosy and KLO, Lower Mission along Lakeshore and Truswell, Quail Ridge near UBC Okanagan and the airport, and McKinley Beach about 15 minutes north of downtown. Before relying on any name, confirm the current version on the City of Kelowna's short-term rental page; the reported lists date to March 2026 and the City maintains the authoritative one.

If you are weighing a sub-zone condo against a conventional rental property, our Kelowna investment guide walks through how we evaluate the numbers, and you can browse current Kelowna listings to see what is for sale in these buildings today.

Inside vs Outside the Sub-Zone: The Rules Side by Side

Licences, Registration and Fees: What a Kelowna Short-Term Rental Costs to Run

Kelowna requires an STR business licence, reported at a $345 annual fee plus a $50 application fee as of mid-2026. Those figures come from secondary sources, so confirm current fees directly with the City of Kelowna before you budget.

On top of the city licence sits BC's short-term rental registry, launched January 20, 2025. Every host must register with the Province and renew annually: $100 per year for an STR the host lives in, $450 per year if not, and $600 per year for strata hotel units. Registration numbers must appear on all listings, and platforms have been removing unregistered listings since June 1, 2025.

Then come taxes. Short-term accommodation in BC carries 8% PST plus up to 3% MRDT in participating areas, on top of 5% GST, under the Province's PST accommodation bulletin. The small-operator exemption does not cover anyone listing on Airbnb or Vrbo, so effectively every platform listing collects, and GST registration becomes mandatory once revenue passes $30,000 over four consecutive quarters.

One more line item for out-of-town buyers: BC's speculation and vacancy tax rates doubled for the 2026 tax year to 1% of assessed value for Canadian citizens and permanent residents and 3% for foreign owners, per the provincial rate table. Kelowna and West Kelowna are inside the taxable region. Do not assume short-term rental use earns an exemption; get professional tax advice before you buy.

Strata Bylaws: The Second Gate

The city's sub-zone approval does not override strata bylaws. A strata corporation can still restrict or ban short-term rentals regardless of zoning, and under BC's Strata Property Regulation a strata can fine up to $1,000 per day for breaching a bylaw that limits or bans STRs, a ceiling in force since November 30, 2018.

So the buyer's sequence is always the same: zoning first, strata bylaws second. A condo in a sub-zone building with an STR ban in its bylaws is not an Airbnb property, full stop.

Enforcement Is Real: What Happens If You Skip the Kelowna Short-Term Rental Rules

The enforcement stack has teeth. Municipal ticketing fines run up to $3,000 per infraction per day, and maximum regional district fines for prosecuted bylaw offences rose from $2,000 to $50,000 under the provincial legislation. The Act also removed legal non-conforming use protections, so a pre-existing grandfathered operation lost that shield.

The Province's Compliance and Enforcement Unit can compel records, issue binding compliance orders, impose administrative monetary penalties and seek court injunctions. Unregistered hosts have listings delisted and bookings cancelled. Detection is not left to chance: platforms must share listing data with the Province monthly, and that data flows to local governments.

Kelowna uses it. The City denied a business licence for an unlicensed seven-unit operation at 911 Bernard Avenue, and the BC Supreme Court upheld the denial in early 2026. Platform data showed the property logged more than 1,000 documented guest nights in 12 months while unlicensed.

Buying a Condo for Airbnb in Kelowna: What to Verify Before You Offer

The market backdrop favours buyers doing this homework now. The July 2026 Central Okanagan benchmark condo price was $490,700, down 2.0% year over year, while single-family homes rose 2.3% to $1,072,400, per the Association of Interior REALTORS. Condos are the cheapest entry point in the market, and the segment where every sub-zone building sits.

Before removing conditions on any "Airbnb-able" unit, verify five things:

• Sub-zone status: is the property on the City's current approved list? Confirm with the City, not a listing remark.
• Strata bylaws: read them. Bylaws can change, and a ban outranks the zoning.
• Licence status: whether an existing STR business licence transfers with a sale is a question for the City. Confirm status and transferability before conditions come off.
• The full cost stack: city licence, $450 provincial registration, roughly 11% in PST and MRDT before GST, and possibly speculation and vacancy tax.
• The fallback math: CMHC's October 2025 survey put Kelowna average rents at $1,596 for a one-bedroom and $2,118 for a two-bedroom. Make sure the purchase works as a long-term rental too, because with vacancy near record highs, that fallback is softer than it was.

Key Takeaways

• Kelowna is the first BC municipality exempt from the principal-residence requirement, effective June 1, 2026.
• The exemption applies only inside the STR sub-zone: 16 properties, 2,196 eligible units as of March 2026, all licensed STR buildings before May 2024.
• Outside the sub-zone, Kelowna short-term rental rules still limit hosting to your principal residence plus one suite or ADU.
• Stratas can still ban STRs and fine $1,000 per day, whatever the zoning says.
• Compliance costs are real: city licence, $100 to $600 provincial registration, 8% PST plus up to 3% MRDT, and enforcement backed by monthly platform data-sharing.
• A vacancy rate of about 6.4% is both why Kelowna got the exemption and why your long-term rental fallback needs conservative math.

Frequently Asked Questions

Can you still Airbnb in Kelowna in 2026?

Yes, in two ways. Anywhere in the city, you can short-term rent your own principal residence plus one secondary suite or ADU with a licence. Inside the STR sub-zone, you can run a whole unit year-round without living there.

Which Kelowna buildings allow short-term rentals without living there?

As of March 2, 2026, 16 properties containing 2,196 units had applied for the sub-zone, clustered downtown, in South Pandosy and KLO, along the Lower Mission and at McKinley Beach. Always confirm a specific building against the City's current list.

Do I need a licence for a Kelowna short-term rental?

Yes, two registrations minimum: a City of Kelowna STR business licence, reported at $345 per year plus a $50 application fee, and BC registry registration at $100 to $600 per year. Your registration number must appear on every listing.

Can my strata ban short-term rentals even in the sub-zone?

Yes. The municipal exemption does not override strata bylaws. A strata can restrict or ban STRs and fine up to $1,000 per day for breaches. Read the bylaws before you buy, every time.

What are the fines for running an illegal Airbnb in Kelowna?

Municipal tickets run up to $3,000 per infraction per day, and prosecuted regional district offences carry fines up to $50,000. The Province can also delist your property and cancel bookings.

Does an existing STR licence transfer when I buy the unit?

Treat that as unconfirmed until the City tells you otherwise. Confirm licence status and transferability with the City of Kelowna before removing conditions.

Will more Kelowna buildings join the STR sub-zone?

Unclear. The initial cohort was limited to properties historically licensed before May 2024, and we have not seen a confirmed process for adding buildings later. Do not buy in an unlisted building on the assumption it can join. For more on how we vet investment properties, see our investment page or our FAQ.

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The Kelowna short-term rental rules in 2026 reward buyers who verify and punish buyers who assume. If you are considering a sub-zone condo, we will pull the strata bylaws, confirm the building's status with the City and run the numbers with you before you commit. Browse current Kelowna listings to see what is available right now, and reach out when you find one worth a closer look.