A well-known tourist hub in the Muskoka region, popular year-round for its lakes, cottages, and access to Algonquin Provincial Park, with peak activity in summer and fall, is now implementing stricter short-term rental regulations. On August 11, 2025, the Town of Huntsville announced a series of significant changes to its Short-Term Rental Accommodation (STRA) and Community Planning Permit (CPP) By-laws, aiming to preserve housing availability, improve affordability, and maintain high safety and operational standards in the local short-term rental market.These changes will have implications for property investors, operators, and prospective buyers considering Huntsville for STR opportunities.STRA Program Purpose and Compliance RequirementsThe STRA program, first introduced to ensure that all rentals of less than 30 days comply with Ontario Building Code and Fire Protection Standards, remains mandatory for anyone renting out a room, unit, or entire property on a short-term basis.All STRA operators must obtain a license and collect the 4% Municipal Accommodation Tax (MAT) on accommodation revenue (excluding incidental charges such as cleaning or deposits). MAT funds are directed toward tourism promotion and quality-of-life initiatives that benefit residents and visitors alike.Key New Regulations for 2025As of July 2025, the STRA By-law has been amended to include three notable changes.1. One-Year Ownership RequirementProperty owners must now hold title for at least one year before listing their property for short-term rental. This measure targets speculative buying solely for immediate STRA conversion. During that first year, owners may use the property personally or rent it for periods of 30 days or longer. The rule exempts existing 2025 STRA license holders who are still within their first year of ownership.2. Cap on STRA LicensesA new ceiling of 250 STRA licenses has been introduced, with approvals issued on a first-come, first-served basis. In 2024, Huntsville granted 224 licenses, but because licenses expire each December 31 and availability changes annually, the number of new approvals that are possible before reaching the cap will vary. Once the limit is hit, new applicants will have to wait until the annual renewal period, which starts on November 1.3. Extended Strike Tracking for Non-ComplianceThe Town’s “three strikes and you’re out” enforcement model now tracks violations over a two-year period rather than resetting annually. This change addresses repeat offenders who historically avoided license loss by spacing out violations year to year. Now, three violations within two years will result in revocation.Zoning Change: Restrictions in UR1 PrecinctThe CPP By-law will soon be amended to prohibit new STRAs in the Urban Low Density Precinct (UR1). Existing licensed STRAs in UR1 will be allowed to continue operating, even if sold, so long as they maintain continuous operation. If a property ceases STRA activity for more than two years, the right lapses and cannot be reinstated.For investors, this creates a form of “grandfathered” asset value; licensed UR1 STRAs may hold strategic resale appeal, but only if they remain active and compliant.Licensing Costs and TimelinesFor 2025, the Town has set STRA licensing fees:New applications: $750 for principal residences; $1,000 for secondary residencesRenewals: $375 for principal residences; $750 for secondary residencesLicenses cannot be transferred between parties, meaning buyers must apply anew after a purchase, further emphasizing the importance of the one-year ownership rule. All licenses expire on December 31 of the year issued.The average approval time for new applications is six weeks, and all applications are now submitted through Huntsville’s Cloudpermit platform. The system allows for document uploads, status tracking, and direct communication with Town staff.New STRA license applications require proof of ownership, property details, insurance, safety and waste plans, and layout drawings. Approved applications undergo a compliance review followed by a site inspection to confirm safety measures, amenities, and overall property condition. If denied, applicants receive a written explanation and have 14 days to file an appeal with the Licensing Committee. Decisions from the Committee are final.Renewal ProcessFor existing license holders, renewal applications open November 1 and must be submitted by the first weekend in February. Renewals are processed on a first-come, first-served basis, and incomplete applications will not be considered.Takeaways for InvestorsHuntsville’s updated STRA rules create both barriers to entry and opportunities for strategic positioning. The one-year ownership rule slows the speed at which new purchases can be monetized through STRA operations, requiring more upfront planning. The 250-license cap means securing a license early will be critical. Meanwhile, the two-year violation tracking increases the operational risk of license loss for non-compliant hosts, making professional property management more valuable. Zoning restrictions in UR1 additionally turn licensed STRAs into potentially scarce, grandfathered assets, which could appreciate in value if maintained continuously.