The Kelowna “Short-Term Rental” Ban: Where Can You Still Buy an Airbnb in 2026?
[kvcoreidx_search]
Kelowna Short Term Rental Ban
In 2024, the BC Government dropped the hammer on short-term rentals (STRs), effectively banning “investment Airbnbs” across the province to save housing stock. For a while, the party was over.
But in 2026, the music is starting to play again—softly.
Driven by a vacancy rate that has risen above the provincial threshold (hitting nearly 7% in late 2025), the City of Kelowna is actively petitioning for an exemption from the provincial ban. If successful, this could reopen the door for lucrative nightly rentals as early as May 1, 2026.
However, it is not a free-for-all. The rules have morphed into a complex game of “Zoning Chess.” You can no longer just buy any condo and list it on Vrbo. You need to buy in specific “protected” buildings or navigate the new “Principal Residence” loophole.
Here is the definitive guide to where you can (legally) buy an Airbnb in Kelowna this year.
1. The “Principal Residence” Rule: The Only Safe Bet (For Now)
Until the provincial exemption is officially signed, the strict rules remain in play.
- The Rule: You can only host short-term rentals in your Principal Residence. This means the home where you live for the majority of the year (typically defined as 240+ days).
- The Loophole: You are allowed to rent out:
- A secondary suite (basement suite).
- A carriage house (laneway home).
- A spare bedroom.
- Crucially: These must be on the same property where you live.
- The Strategy: In 2026, the smartest STR investment isn’t a condo; it’s a house with a carriage house. You live in the main house, rent the carriage house nightly for $300/night in summer, and you are 100% compliant.
2. The “STR Subzone”: The New Gold Rush
This is the game-changer for 2026. The City of Kelowna is creating a new zoning classification—the “STR Subzone”—which will allow for “Major” short-term rentals (i.e., investment properties where the owner does not live).
- The Catch: A building must actively apply to be rezoned into this subzone.
- The “Dirty Dozen”: Currently, about 12 buildings have indicated interest or are in the process of applying. These are generally the buildings that were purpose-built for tourism. If you buy here, you are betting on the exemption passing.
The “Legacy” Resort Buildings to Watch:
These buildings have the highest probability of receiving the new STR status because they have historically operated as hotels/resorts.
- Sunset Drive Corridor (Downtown):
- Discovery Bay: The waterfront giant.
- Sunset Waterfront Resort: Directly on the lagoon.
- The Dolphins: An older, iconic tower with a long history of vacation rentals.
- Lower Mission:
- Playa Del Sol: Across from Rotary Beach. This complex essentially functions as a hotel and is a prime candidate for the new zoning.
- Mission Shores: Luxury townhomes right on the water.
3. The “Downtown Commercial” Zone
There are a handful of newer buildings in downtown Kelowna that were zoned C7 (Central Business Commercial) or similar “hotel” zoning from day one. These were often marketed as “Airbnb-friendly” during construction.
- Brooklyn at Bernard Block: One of the few buildings explicitly designed with a “mission control” for nightly rentals.
- Sole (St. Paul, KLO, Downtown): These micro-suites were built for the transient worker/tourist model.
- Aqua Waterfront Village: As this massive project completes, certain phases are being earmarked for short-term rental allowances, though this is subject to the new 2026 exemption status.
4. The “Student Hybrid” Model (UBCO)
If you want safety, look at the University District.
- The Strategy: Buy a unit in a building like Academy Hill or U-Eight.
- The Cycle: Rent to a student for the 8-month academic year (Sept–April). This guarantees your base income.
- The Summer Bonus: In the summer (May–Aug), when the student leaves, you may be able to run short-term rentals if the building bylaws and city exemption allow it. Even if not, the demand for “summer student” housing or executive rentals is high.
5. What to Avoid: The “Residential” Trap
Do not buy a standard condo in a residential tower (like Skye at Waterscapes or Centuria) hoping to “fly under the radar.”
- The Crackdown: In 2026, enforcement is automated. Platforms like Airbnb are required to share data with the province. If your listing doesn’t have a valid business license, it gets delisted instantly, and fines can hit $3,000 per day.
- Strata Bylaws: Even if the city allows it, many Stratas have voted to ban STRs to keep insurance costs down. Always review the “Form B” and bylaws before making an offer.
6. The 2026 Forecast: May vs. November
The market is currently in a holding pattern waiting for the provincial green light.
- Scenario A (May 2026): The exemption is granted before summer. Prices in buildings like Discovery Bay and Playa Del Sol will likely pop 10-15% overnight as investors rush back in.
- Scenario B (November 2026): The exemption is delayed until the “reset” date in late fall. This creates a buying window now. You can buy a unit in spring 2026 at a “suppressed” price, rent it long-term for 6 months, and be ready to launch your Airbnb empire in 2027.
Airbnb Buyer’s Checklist (2026)
| Building / Zone | Probability of STR Legal Status | Risk Level |
| House w/ Carriage House | 100% (Principal Res) | Low |
| Playa Del Sol | High (Legacy Resort) | Low/Med |
| Sunset Drive (Discovery) | High (Legacy Resort) | Low/Med |
| Brooklyn / Sole | Med/High (Commercial Zoning) | Med |
| Standard Residential Condo | 0% (Unless Principal Res) | Extreme |
STR FAQs
Contact us to receive our “2026 STR Watchlist”—a confidential list of the 12 specific buildings currently applying for the new “STR Subzone” status.
Can I buy a condo and live in it for the summer, but rent it on Airbnb in the winter?
Technically, yes, if it is your principal residence. However, if you leave for months at a time, the city may challenge whether it is truly your “principal” home. You usually need to be there for the majority of the year.
What happens if I buy in Playa Del Sol and the exemption is denied?
You would be stuck with a condo that can only be rented long-term (30+ days). While Playa Del Sol is a great location, the monthly strata fees are high (often covering pool/utilities), which can eat up cash flow on a long-term rental model.
Are license fees increasing?
Yes. To discourage “casual” hosts, the City of Kelowna has discussed raising the business license fee for Major STRs. Expect to pay upwards of $750 – $1,000 per year for the license if the new subzone is approved.
Can I use a property manager?
Yes, and you should. Managing a high-turnover Airbnb in 2026 requires instant response times. Local managers (like Key To The Okanagan or HostAway) take 20-25%, but they handle the strict cleaning protocols and guest vetting that keeps your license safe.
Is West Kelowna different?
Yes. West Kelowna has its own bylaws. Currently, they also follow the provincial principal residence requirement, but “resort zones” like Barona Beach and The Cove have different historical protections. Always verify the specific municipality; rules do not cross the bridge!
Want to beat the rush?
We are helping investors secure units in “Legacy Resort” buildings before the exemption announcement drives prices up. Contact us to see what is available today.
