Does a municipal short-term rental licence transfer automatically when an investment property is sold?

Generally no. Where a municipality requires a licence to operate a short-term rental, that licence is typically tied to the specific operator or, in some cases, to the property along with conditions the operator must meet, and it does not automatically continue in your name simply because you bought the property. Assuming the previous owner's licence carries forward with the sale is a common and risky assumption for buyers planning to continue short-term rental use.

Before closing, confirm with the specific municipality whether the licence requires a fresh application, a new inspection, or a formal transfer process, since requirements vary considerably between municipalities and some do not permit any transfer at all. If you intend to operate the property as a short-term rental immediately after closing, verify this well in advance rather than discovering after the sale that you are not actually licensed to operate as you planned, which can mean lost income and possible bylaw enforcement while you sort out the application process.