On June 1, 2026, Kelowna becomes the first municipality in British Columbia to opt out of the province's short-term rental principal residence rule. For the first time since BC's Short-Term Rental Accommodations Act took effect in May 2024, a BC city can legally host full-investment Airbnb and VRBO properties that aren't owner-occupied.
The exemption is tied to Kelowna's rental vacancy rate, which hit 6.3% in 2025 — the highest of any metropolitan area in Canada. But the rules are narrower than the headlines suggest. Here's what actually changed, who qualifies, and what hasn't.
What Changed on June 1, 2026
Under BC's Short-Term Rental Accommodations Act, short-term rentals (under 90 days) in communities with populations over 10,000 must be the host's principal residence or a secondary suite on that property. That rule applies to more than 60 BC communities.
Effective June 1, 2026, Kelowna is exempt from the principal residence requirement. Hosts operating an eligible Kelowna property no longer need to live there. Full-time investment short-term rentals are once again legal — but only in specific zones and only for properties that meet Kelowna's local rules.
Key Takeaway
Why Kelowna Qualified
Under the Act, a BC municipality can apply to opt out of the principal residence requirement if its rental vacancy rate stays at 3% or higher for two consecutive years, measured by Canada Mortgage and Housing Corporation (CMHC) data.
| Year | Vacancy Rate | Meets 3% Threshold |
|---|---|---|
| 2024 | 3.8% | Yes |
| 2025 | 6.4% | Yes (highest of any Canadian metro) |
Kelowna was the only BC city that formally requested an opt-out for 2026 and asked the province to expedite the timeline — typically opt-outs would take effect November 1 after a March 31 application deadline. A one-time regulation moved Kelowna's effective date up to June 1, ahead of its 2026 summer tourism season and the Memorial Cup hockey tournament.
Where Short-Term Rentals Are Actually Allowed in Kelowna
This is where most of the nuance lives. The provincial opt-out removes one rule — but Kelowna layered its own zoning on top. Only properties inside Kelowna's new STR sub-zone can operate as a principal-use short-term rental.
The STR sub-zone was created in preparation for the opt-out and covers tourism-oriented areas — primarily:
- Buildings in and around the downtown Kelowna core
- Waterfront developments along Okanagan Lake
- Specific strata developments pre-approved by the city for STR use
- Commercially-zoned tourism properties
⚠️ Residential zoning is excluded
What Hosts Still Need to Do
The provincial opt-out doesn't remove the provincial registration or the Kelowna business licence. Every short-term rental host in Kelowna still needs both.
- Provincial STR registration through the BC short-term rental registry — requires a valid local business licence at time of application
- Kelowna business licence for short-term rentals, renewed annually
- Property in the STR sub-zone — confirmed via the city zoning map
- Platform compliance — Airbnb, VRBO, and other listing platforms must display the provincial registration number on every listing
Stratas can still prohibit short-term rentals through their own bylaws, and Kelowna has stated it won't mediate internal strata disputes over STR use. Owners in strata-titled buildings need to confirm both the city's zoning and their strata's bylaws before operating.
What's Next for Other BC Cities
Kelowna is first, but the province built a framework for future opt-outs. Starting in 2027, the application process gets faster:
| Step | Deadline |
|---|---|
| Municipality submits opt-out application | February 28 |
| Province reviews and approves | Spring |
| Opt-out takes effect | June 1 |
Any BC municipality with a rental vacancy rate of 3% or more for two consecutive years can apply. Based on current CMHC data, most Metro Vancouver and Fraser Valley communities are well below the 3% threshold and won't qualify anytime soon. Kelowna's opt-out is a unique case — not the start of a wave.
💡 The policy logic
FAQs About Kelowna's Opt-Out
When does Kelowna's opt-out take effect?
June 1, 2026. The province granted a one-time accelerated timeline so Kelowna can operate under the new rules ahead of its 2026 summer tourism season.
Can I Airbnb my single-family home in Kelowna now?
Only if your property sits inside the city's STR sub-zone (mostly downtown and waterfront tourism areas). If your home is in a residential neighbourhood that wasn't rezoned, the provincial principal residence rule still applies to you — you'd need to be living in the home.
Does this apply to my condo in Kelowna?
Only if the specific strata building has been included in the STR sub-zone. Even then, your strata bylaws can still prohibit short-term rentals. Both checks — zoning and strata bylaws — need to pass before you can operate.
Will other BC cities like Vancouver, Surrey, or Victoria get an opt-out?
Not soon. The eligibility test is a 3%+ vacancy rate for two consecutive years. Most major BC cities have vacancy rates well under 3% right now, so they don't qualify. If vacancy loosens over time, the new streamlined 2027 timeline would let them apply.
Do hosts still need a provincial registration?
Yes. The opt-out removes the principal residence rule — it doesn't remove provincial STR registration. Every host still needs a registration number displayed on their listings, and that registration requires a valid Kelowna business licence at the time of application.
The Bottom Line
Kelowna's opt-out is real, but narrower than the headlines. The provincial principal residence rule is gone for qualifying properties, but Kelowna's own zoning is the new gatekeeper — and it limits full-time investment short-term rentals to tourism-zoned areas, not residential neighbourhoods.
If you own a Kelowna property and are thinking about short-term rental use, the first question isn't whether your home qualifies under provincial rules — it's whether it sits in the STR sub-zone on the city's zoning map. That's where the decision is actually made.
Sources: BC Government announcement, City of Kelowna short-term rentals, CBC News.
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