Regulation & Licensing · 2026
What the Law Requires in Chester & Lunenburg
Start with the province. Under Nova Scotia's Short-term Rentals Registration Act, every accommodation offered for 28 consecutive days or less must be registered before it operates, and the regulations count advertising or taking reservations as operating. A whole home that is the host's primary residence pays C$50 a year. A commercial short-term rental, a home the host owns or a condominium unit that isn't the host's primary residence, pays by tier: C$2,000 a unit in seven Halifax-area communities, C$240 in Clark's Harbour, Digby, Lockeport, Mulgrave and Shelburne, and C$500 a year everywhere else, which takes in Chester, Mahone Bay and Lunenburg. Hotels, motels, bed and breakfasts, rented rooms in a primary residence and other traditional accommodations pay C$50 a location for one to four bedrooms and C$150 for five or more. The application needs the municipality's confirmation that the use complies with its land-use by-law, and whole-home and rented-room hosts must prove primary residence with at least two documents. Each civic address needs its own number, processing usually takes two to three weeks, registrations can't be transferred, so a buyer must register before operating, and the registration year runs from April 1 to March 31.
Advertising and enforcement come next. Hosts must include the registration number in every online advertisement, and platforms must check that postings carry a valid number and take listings down when the minister asks. The province puts the fine for running an unregistered rental at up to C$100,000 a year, and since December 1, 2025 it can also issue administrative penalties of C$2,000 for a first offense, C$4,000 for a second and C$8,000 after that. The same amendments require anyone whose mailing address is outside Nova Scotia to name an office or representative in the province, which matters for owners who live in Ontario, Quebec or the United States, and limit commercial registrations to units the applicant owns or condominium units. A part-time summer house may fit the personal vacation home category instead, at the traditional-accommodation fee: it must be meant mainly for seasonal use by the owner, their family and close friends, not be a primary residence or sit on the same property as one, not be meant mainly to earn rental income or to be lived in year-round, be the owner's only such dwelling, and be rented no more than 150 days in a registration year.
In the Municipality of the District of Chester, every accommodation needs a municipal licence to advertise, promote or carry on business, one licence per property. The licence is free, and the municipality says it can serve as the proof of land-use compliance the province asks for. The municipality sorts accommodations into three kinds: short-term rentals of a residential dwelling for 28 days or less, traditional tourist accommodations such as motels, hotels, inns, bed and breakfasts and campgrounds with roofed units, and unusual lodgings such as bunkies, domes, stationary RVs and yurts. An application needs proof of insurance with C$2,000,000 in liability coverage, a site sketch showing the property's boundaries, every building, which buildings will be rented, the driveway and the parking, a letter from the condominium board where there is one, and the owner's authorization if someone else applies. Staff check that the property has a valid occupancy permit and no open work orders, and review takes about 30 days. Planning is a separate track. On April 24, 2025, council gave first reading to proposed amendments to the Municipal Planning Strategy and Land Use Bylaw that would add a short-term rental policy and general provision and define short-term rentals separately from traditional tourist accommodations, and the public hearing followed on May 15, 2025. The hearing notice left the decision to a later council vote, and we couldn't confirm the outcome, so treat the amendments as proposed and ask the planning office where they stand before you buy, build or add a unit.
The two towns are stricter. Mahone Bay's Municipal Planning Strategy, in effect since March 20, 2024, directs its Land Use By-law to allow short-term rentals, along with hotels, motels and inns, in the zones that put commercial uses first. In other zones it limits the number of short-term rentals per lot and allows them only on lots where proof of primary residency is given to the development officer, so a house whose occupier lives elsewhere can't be rented short-term there; bed-and-breakfast rooms let by a resident owner or manager are allowed in residential and commercial zones. The Town of Lunenburg needs a development permit for the short-term rental use, which is free, and a zoning confirmation letter at C$63.60, with a floor-plan sketch that shows the rental unit. Its residential zones allow one short-term rental per lot, the whole home or one bedroom, so only one unit of a duplex qualifies, and basement, garage, garden and granny suites can't be rented short-term at all. The Municipality of the District of Lunenburg, which takes in Blue Rocks and the countryside around both towns, issues zoning confirmations for a fee, requires a building permit before any building is used for sleeping, including a converted storage building, and an occupancy permit before guests use the space; it processes letters and permits within 14 days.
Taxes complete the picture. Nova Scotia's HST dropped from 15% to 14% on April 1, 2025. A host registered for GST/HST charges it and files it; for hosts who aren't registered, Airbnb collects it on stays of 30 nights or fewer, cleaning fees included. Airbnb's list of the Canadian local taxes it collects names one levy in Nova Scotia, Halifax's 3%, and nothing between Hubbards and Blue Rocks, so the Town of Lunenburg's 3% levy from January 1, 2027 is yours to collect, with a return due within 30 days of each month's end, nil returns included. Mahone Bay's by-law list shows no levy, and owners in the Chester and Lunenburg district municipalities should ask whether one is coming. The federal rule applies everywhere: from the 2024 tax year, the CRA disallows income-tax deductions for the days a short-term rental, meaning stays of less than 90 consecutive days, wasn't permitted where it sits or fell short of a provincial or municipal registration, licensing or permit requirement. All of this is orientation, not legal advice; a Nova Scotia lawyer, an accountant and your municipality have the final word, and Cavmir's part is the marketing.