Kelowna’s short-term rental rules changed in 2026. Here is what a carriage home or secondary suite can and can't do under the current rules.
Written by Serge, Founder, Kelowna Carriage Homes
BC’s Short-Term Rental Accommodations Act, in effect since May 2024, restricts short-term rentals, bookings under 90 consecutive days, in communities over 10,000 people to a host’s principal residence. A host can also rent out one secondary suite or accessory dwelling unit, such as a carriage home, on that same property.
Kelowna became the first BC municipality to opt out of the provincial principal-residence requirement, effective June 1, 2026, after its rental vacancy rate reached roughly 6.3% to 6.4% in 2025, well above the 3% threshold the province requires for two consecutive years to qualify (BC Gov News release on the opt-out process). Kelowna received this as a one-time special exception; other municipalities follow a slower standard timeline.
The exemption applies only to properties inside a City-designated short-term-rental subzone: a specific list of buildings and tourism-zoned addresses, currently around two dozen, including developments like McKinley Beach and select downtown buildings, not to residential neighbourhoods generally (Kelowna short-term rental rules overview). Most buildings and lots in Kelowna remain outside this subzone.
Almost all carriage homes and secondary suites sit on standard residential lots outside the STR subzone. For those properties, the provincial principal-residence rule still applies: short-term or nightly rental of the unit is legal only if the owner lives in the main house as a principal residence, since a legal secondary suite or carriage home is allowed as the one exempted second unit under that rule.
Any short-term rental under 90 consecutive days in Kelowna needs a City business licence. A Minor licence, for secondary-use short-term rental while living on the property, currently carries a roughly $345 annual fee on top of a $50 application, with processing typically taking 2 to 4 weeks (Kelowna short-term rental licensing details). A Minor licence generally requires the owner to occupy the property for a set minimum portion of the year.
Even where zoning and provincial rules allow it, a strata corporation can prohibit or restrict short-term rentals in its own bylaws, with fines that can reach into the hundreds of dollars per day for a violation. A mortgage lender’s occupancy terms can matter here too, so both are worth checking before counting on short-term income.
CMHC’s 90%-of-value insured refinance product for adding a secondary suite, introduced January 15, 2025, specifically excludes short-term rental use and requires a minimum 90-day tenancy term. Combining that financing tool with a short-term rental plan for the same unit is not compliant (CMHC refinance program details).
For most owners, a new carriage home or secondary suite is a long-term rental by default, not a short-term one, unless the owner is renting out their own principal residence and using the new unit as the permitted second unit. Anyone considering a nightly-rental income model on a standard residential lot should confirm current zoning and licensing status with the City directly before counting on it as the plan; rules in this area have changed twice in three years and can change again.
See financing options for how the 90-day tenancy rule affects a refinance plan.
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