Your cancellation policy decides what a cancelled booking is worth. Pick a loose one and a guest can walk away the day before check-in and you get nothing. Pick a tight one and you keep the money when plans change — but some guests will not book at all. In October 2025 Airbnb rebuilt this setting: Strict is gone for new listings, a new Limited policy arrived, and every short stay now carries a 24-hour grace period you cannot turn off. This guide explains what each policy actually pays a Toronto host, shows the payout on the same booking under each one, and gives a seasonal pick for a Toronto condo.
TL;DR
- There are now four standard policies for stays under 28 nights: Flexible, Moderate, Limited, and Firm. Strict was retired for new listings on October 1, 2025, and most existing Strict listings were moved to Firm.
- Every policy starts with a 24-hour grace period. A guest who books at least 7 days before check-in can cancel within 24 hours of booking for a full refund, whatever policy you set.
- The payout gap is large. On a 4-night, $600 booking cancelled 3 days out, Flexible pays $0, Moderate pays about $375, and Limited or Firm pays the full $600 — before Airbnb’s 15.5% host fee.
- Firm is Toronto’s most-used policy, at about 41% of listings in market data published in October 2026. It fits peak season and event dates. Looser policies fit slow months, especially February.
- You can soften Firm without giving up protection: add the non-refundable option at about 10% off, and check whether date-specific policies are available on your account, so peak dates stay Firm and slow dates run looser.
On this page:
- What Changed in October 2025
- The Four Policies, Side by Side
- What Each Policy Pays: One Booking, Four Outcomes
- The 24-Hour Grace Period You Cannot Turn Off
- The Non-Refundable Option
- Date-Specific Policies: Firm for Peak, Loose for Slow
- Stays of 28 Nights or More Play by Different Rules
- The Toronto Seasonal Pick
- When Airbnb Overrides Your Policy — and When You Cancel
- How to Choose, and How to Change Yours
- Frequently Asked Questions
What Changed in October 2025
On October 1, 2025, Airbnb restructured cancellation policies for stays of 27 nights or fewer. Three changes matter to a Toronto host.
Strict was retired for new listings. Hosts who already had Strict were given a window to opt in and keep it. Hosts who did not were moved to Firm, the closest replacement. If you have not checked your setting since last fall, you may be running a policy you never picked. Check it before you read the rest of this guide.
A new policy, Limited, was added. Limited sits between Moderate and Firm. Guests get a full refund up to 14 days before check-in, 50% from 7 to 14 days out, and no refund inside 7 days. It was built for hosts who wanted real protection without Firm’s 30-day free-cancellation window.
A universal 24-hour grace period was added to every standard policy. More on that below — it applies even on Firm and even on a non-refundable rate.
Airbnb also says hosts who moved from Strict to Firm earned about 10% more on average, because the slightly friendlier terms won more bookings than they lost to cancellations. That is Airbnb’s own figure, not a guarantee. It points the right way, though: the tightest policy is not always the one that pays most over a year.
Two newer features sit on top of the policies. Reserve Now, Pay Later lets eligible guests reserve with nothing paid upfront, which can raise booking volume and can also raise cancellations, because the guest has less committed. And date-specific policies, covered below, let you vary the policy by date range instead of running one policy all year.
The Four Policies, Side by Side
These are Airbnb’s current standard terms for stays under 28 nights, taken from Airbnb’s own cancellation policy page. Cleaning fees are refunded in full when a guest cancels inside the free-cancellation window. After that window, the payout rules below apply.
| Policy | Full refund until | If the guest cancels after that |
|---|---|---|
| Flexible | 24 hours before check-in | You are paid for each night the guest stays, plus 1 additional night. If they never check in, you are paid for the first night. |
| Moderate | 5 days before check-in | You are paid for each night stayed, plus 1 additional night, plus 50% of all unspent nights. |
| Limited | 14 days before check-in | From 7 to 14 days out, you are paid 50% of all nights. Inside 7 days, you are paid 100% of all nights. |
| Firm | 30 days before check-in | From 7 to 30 days out, you are paid 50% of all nights. Inside 7 days, you are paid 100% of all nights. |
Read the table as two questions. First, how late can a guest cancel for free? That is the booking side — a shorter free window can cost you bookings, because free cancellation is one of the top things guests say they look for. Second, once the free window closes, how much do you keep? That is the protection side. Flexible and Moderate keep paying partial amounts based on nights stayed. Limited and Firm are simpler: half in the middle window, everything inside the last week.
Your long-stay setting is separate. Stays of 28 nights or more follow the long-term policies in the section below, whatever your standard policy says.
What Each Policy Pays: One Booking, Four Outcomes
Policy names do not show the money. Run the same booking through each one.
Take a typical downtown condo booking: 4 nights at $150 a night, $600 in nightly charges. The $150 figure is the median booked rate in AirROI’s Toronto data for the 12 months to September 2026 — the average was higher, at $232, and half of listings booked between $89 and $280 a night. Cleaning is left out of this table on purpose: it is refunded on a free cancellation and follows the policy after that, so the nightly money is the clean comparison.
| Guest cancels | Flexible | Moderate | Limited | Firm |
|---|---|---|---|---|
| 20 days before check-in | $0 | $0 | $300 (50%) | $300 (50%) |
| 3 days before check-in | $0 | $375 | $600 (100%) | $600 (100%) |
| On check-in day, never arrives | $150 (first night) | $375 | $600 (100%) | $600 (100%) |
The Moderate figure at 3 days out is its formula at work: no nights stayed, plus 1 additional night, plus 50% of the remaining 3 unspent nights — that is 2.5 nights of 4, or $375.
Two deductions still apply to whatever you keep. Airbnb’s 15.5% host-only fee comes off the payout. Keep $600 and the fee takes $93, leaving $507. Keep $300 and you net $253.50. Our guide to Airbnb management fees in Toronto shows how that fee gross-up works on your nightly rate.
Gross kept is not profit kept. A cancelled stay still has a formula behind it:
What you keep = (nightly rate × nights the policy pays) − 15.5% host fee − any cleaning you already paid for − rebooking discount if you cut the price to refill the dates.
That last line is the Toronto problem. A late cancellation in June can often be refilled. A late cancellation in February usually cannot, and a cleaning crew booked for a turnover that never happens is a real cost — a core one-bedroom turnover runs about $115 in 2026, from our Toronto cleaning fee guide. The policy is what stands between that gap and your income.
The 24-Hour Grace Period You Cannot Turn Off
Every standard policy now includes this rule: if a reservation is confirmed at least 7 days before check-in, the guest can cancel within 24 hours of booking and receive a full refund, including taxes.
It applies on Flexible, Moderate, Limited, and Firm. It applies to the non-refundable option too. You cannot opt out of it, and changing your policy does not remove it.
In practice it costs most hosts little. A guest who cancels a day after booking, weeks before arrival, leaves you the calendar back with time to rebook. What it does change is how you read a new booking: a reservation made far in advance is not firm money until that first day passes. Do not schedule paid work — a deep clean, a furniture delivery — on the strength of a booking that is still inside its grace period.
Bookings made less than 7 days before check-in do not get this grace period. There, your policy’s own window is the only one that counts.
The Non-Refundable Option
The non-refundable option is not a fifth policy. It is a discounted rate you offer alongside your standard policy. The guest chooses at booking: your normal rate with your normal policy, or a lower rate — typically about 10% off the base price — with no refund if they cancel.
If a guest on the non-refundable rate cancels, you keep the full payout for all nights booked. The cleaning fee is still refunded if they cancel before check-in, because no cleaning was done. The 24-hour grace period still applies.
Why offer a discount to get protection you could take for free with Firm? Because the guest makes the choice, not you. Two prices on the same listing let a sure guest save money and an unsure guest pay for flexibility. Your listing keeps a friendly headline policy for search and booking conversion, while a share of guests lock themselves in voluntarily.
It pairs best with Limited or Moderate as the base policy. On Firm, the non-refundable rate can only be booked up to 14 days before check-in — inside your strongest window it adds little. On Flexible it can be booked until the day before check-in, and on Moderate until 5 days out, which is where late, firm bookings are worth the most.
Date-Specific Policies: Firm for Peak, Loose for Slow
Until recently, one policy covered every date on your calendar, all year. Airbnb now lets hosts set a different policy for a specific date range from the calendar. Everything outside the range keeps your default policy. If a booking spans two ranges, the policy tied to the guest’s check-in date applies. Changes apply to new bookings only — existing reservations keep the policy they booked under.
Airbnb launched this feature in the United States first and has been rolling it out by market, so check your own calendar settings to confirm it is available on your account before you build a plan around it.
Where it helps a Toronto host is obvious once you see it:
- Protect 10 to 20 high-value dates — TIFF in September, the summer weekends, the winter holidays, a big concert or sports weekend — with Firm, while the rest of the year runs Moderate or Limited.
- Loosen near-term, unbooked dates. An empty weekend two weeks out converts better on a friendlier policy, and a late booking at a partial payout risk beats no booking.
- Align it with your other seasonal settings. If you already run seasonal prices and minimum stays, use the same date ranges. A protected peak weekend left on Flexible by mistake is the one error this feature makes easy. Our guides to dynamic pricing for Toronto Airbnbs and minimum stay settings in Toronto cover those two settings.
If date-specific policies are not on your account yet, you get most of the same effect the manual way: run your seasonal default, and change the listing policy ahead of your peak booking window, remembering that only new bookings take the new policy.
Stays of 28 Nights or More Play by Different Rules
Reservations of 28 or more consecutive nights do not use your standard policy at all. They use a long-term policy, and you choose between two:
- Long-term Firm: full refund if the guest cancels at least 30 days before check-in. After that, you are paid 100% for all nights spent, plus 30 additional nights — or all remaining nights, if fewer than 30 remain.
- Long-term Strict: full refund only if the guest cancels within 48 hours of booking and at least 28 days before check-in. After that, the same payout: nights spent plus the next 30 nights, or all remaining nights if fewer remain.
The logic is simple. A cancelled month is far harder to refill than a cancelled weekend, so both long-term policies protect roughly a month of income once the free window closes.
For a Toronto host, this is the winter lane. A 28-plus-night booking sits outside the City’s short-term rules — no 180-night cap use, no short-term registration night counted — and fills the months when short stays slow down. Set the long-term policy on purpose instead of inheriting the default, and make it match any written agreement you use for monthly guests. Our guide to mid-term rentals in Toronto covers how those stays fit a condo’s year.
The Toronto Seasonal Pick
Start from what Toronto hosts already do. In market data published in October 2026, Firm is the most-used policy in Toronto, at about 41% of listings. That does not make Firm right for every condo, every month. It tells you guests in this market book Firm listings every day — a Firm policy is not the booking killer hosts fear.
A practical setup for a downtown condo:
- Peak — June through September, TIFF, holidays, event weekends: Firm. Demand is high, lead times are long, and a late cancellation destroys your best-priced nights. If a guest cancels 10 days out in August, Firm still pays you half, and inside a week it pays in full. Our Toronto occupancy guide shows how concentrated those peak months are.
- Shoulder — April, May, October: Limited, or Firm with the non-refundable option on. You still get paid in full inside 7 days, but the 14-day free window is friendlier for guests booking a month out and comparing listings.
- Slow — November through March, February above all: Moderate, or Limited if cancellations have burned you. February is Toronto’s low month. An empty condo earns $0 with any policy. The looser window, plus a non-refundable rate beside it, is built for this season: flexible headline, locked-in discount bookings underneath.
Remember the cap as you choose. An entire-unit Toronto listing can only sell 180 short-term nights a year. A peak night lost to a Flexible cancellation is not just lost income — a prime night from a capped calendar is gone, and winter nights cannot replace its rate. That scarcity is the strongest argument for Firm when demand is high, and it disappears in February, when nights are plentiful and guests are not. The seasonal flip is the point. Want the earnings side of that calendar modelled on your own unit first? Get an income estimate for your Toronto condo, or see the full worked numbers in our guide to how much a Toronto condo can earn on Airbnb.
When Airbnb Overrides Your Policy — and When You Cancel
Your policy is the default, not a guarantee. Airbnb can refund a guest in full over the top of it in defined cases:
- Major disruptive events — events beyond anyone’s control, such as declared emergencies, government travel restrictions, or large-scale disruption, can let guests cancel without penalty under Airbnb’s Major Disruptive Events policy, whatever you set.
- Rebooking and refund cases — if a guest arrives and the place is inaccessible, unsafe, unclean, or materially not as listed, Airbnb can refund them from your payout. That is not a cancellation, but the money effect is the same. Accurate listings and a real turnover clean are policy protection too.
- Personal problems usually do not override. A guest’s changed plans, ordinary illness, or bad weather are handled by your policy, not by an override. If a guest asks you to waive the policy as a favour, that is your call — and under Home Again’s standing approach, policy is policy unless the problem was the host’s fault.
The other direction is stricter. If you cancel a confirmed reservation, you get no payout for it, Airbnb charges a host cancellation fee — a percentage of the reservation, with a minimum of $50 — your calendar can be blocked for those dates, and cancellations count against Superhost, which requires a cancellation rate under 1%. A host cancellation to dodge a guest’s firm policy is the most expensive version of the same night. Avoid it unless a genuine emergency leaves no choice, and document that emergency for Airbnb.
How to Choose, and How to Change Yours
Answer three questions, in order:
- How hard are your dates to refill? A downtown condo near the Rogers Centre in July refills. The same condo in February does not. Hard-to-refill dates argue for protection, easy-to-refill dates argue for conversion — and date-specific policies now let you split the difference.
- How far ahead do your guests book? Toronto’s average lead time in recent AirROI data was about 41 days. If most of your bookings land more than a month out, Firm’s 30-day free window still gives those guests a real exit — and your protection only starts after the point most guests have settled their plans anyway.
- What can one bad cancellation cost you? Price it with the worked example above: your rate, your likely stay length, your cleaning cost. If one late cancellation wipes out a month of profit, protect. If it costs you one refillable weekend, convert.
Changing the policy itself is quick: open the listing, go to booking settings, choose the new cancellation policy, and save. The new policy applies to new bookings only. Existing reservations keep the policy they were booked under — so make seasonal changes before the booking window for that season opens, not after the calendar fills.
Review the setting twice a year: once before the summer booking window, once before winter. Check three things each time — the standard policy, the long-term policy, and whether the non-refundable option is on. It takes five minutes, and it is the cheapest revenue protection a host can buy. Home Again sets and reviews this for every unit we run — it is a standard part of our Airbnb management in Toronto setup, and the policy call is made per unit, per season, not once for the whole portfolio.
Frequently Asked Questions
What is the best Airbnb cancellation policy for a Toronto host?
For most Toronto condos, Firm in peak season — roughly June through September, plus event dates — and Limited or Moderate in slow months. Firm is already the most-used policy in Toronto, at about 41% of listings. Add the non-refundable option at about 10% off so guests who are sure of their plans can lock in, whichever base policy you run.
What happened to Airbnb’s Strict cancellation policy?
Airbnb retired Strict for new short-stay listings on October 1, 2025, and added the Limited policy the same day. Hosts who had Strict and did not opt in to keep it were moved to Firm. A Strict policy still exists, but only for long-term stays of 28 nights or more.
How much do I get paid if a guest cancels?
It depends on the policy and the timing. On a $600, 4-night booking cancelled 3 days before check-in: Flexible pays $0, Moderate pays about $375 (one night plus 50% of the unspent nights), and Limited or Firm pays the full $600. Cancelled 20 days out, Flexible and Moderate pay $0 and Limited and Firm pay $300. Airbnb’s 15.5% host fee comes off whatever you keep.
Can a guest always cancel free within 24 hours of booking?
Only when the reservation was confirmed at least 7 days before check-in. Then yes — every standard policy, and the non-refundable option, allows a full refund within 24 hours of booking, and the host cannot opt out. Bookings made inside 7 days of check-in have no grace period, only the policy’s own terms.
Can I set different cancellation policies for different dates?
Yes, where Airbnb has rolled the feature out — it launched in the United States first and is expanding by market, so check your calendar’s custom settings. You set a date range and apply a different policy to it; bookings that span ranges use the policy tied to the check-in date, and changes apply to new bookings only.
Does my cancellation policy apply to monthly stays?
No. Stays of 28 nights or more use a separate long-term policy — Firm or Strict — which you set independently. Under long-term Firm, a guest cancels free up to 30 days before check-in; after that you are paid for nights spent plus 30 additional nights, or all remaining nights if fewer remain.