Tag Archives: Airbnb

UPDATE: Airbnb Hosts Beware: Boston Proposes Regulations on Short Term Rentals

By on April 16, 2018

Airbnb Hosts Beware, as the Massachusetts Legislature is now considering a bill to tax Airbnb and the short term rental industry.

Recently, the Massachusetts House of Representatives passed a bill (H 4327) that places a tax on short-term rental units as well as establishes a state registry of short-term rentals. The short-term rental tax established by the bill is imposed via a tired system depending on the amount of units any one host rents/owns. More specifically, and based on the short-term rental rent:
• Hosts that rent two or fewer units (“Residential Hosts”) are subject to a 4% tax;
• Hosts that rent three to five units (“Investor Hosts”) are subject to a 5.7% tax on the short-term rental rent; and,
• Hosts that rent more than six units (“Professionally Managed Hosts”) are subject to an 8% tax on the short-term rental rent.
The bill also allows city and towns to impose an additional tax on the same short-term rentals, however, such tax is limited to:
• 5% on Residential Hosts;
• 6% on Investor Hosts; and,
• 10% on Professionally Managed Hosts.

While the House bill still has a ways to go before becoming law, Massachusetts Governor Charlie Baker has indicated that he would like to sign a short-term rental bill this legislative session.
Boston residents who participate in the short-term-rental economy are well advised to understand, and keep an eye on, proposed changes in housing law as regulations begin to promulgate in response to a growing industry.

Airbnb Hosts Beware: City of Boston Proposes Regulations on Short Term Rental Industry

By on February 5, 2018

Boston Mayor, Marty Walsh, recently proposed a citywide ordinance that will, if adopted by City Council, subject short-term rentals – such as those advertised through the popular home-sharing website, Airbnb – to regulations and reporting requirements.

The proposed ordinance requires that all short-term-rentals register with the city and pay an annual fee based on a tiered rental classification system. The classification system additionally dictates how many days per year various properties may be rented and the maximum number of guests per night. The ordinance also imposes a room occupancy excise tax on all short-term rentals. Short-term-rentals that are noncompliant with city codes will be ineligible for registration. Further, beyond requiring individual owner/host compliance, the ordinance also places reporting requirements on the booking companies themselves. 

Specifically, the ordinance classifies three types of short-term rental units:

  1. Limited Share Units
  2. Home Share Units; and
  3. Investor Units

Limited Share Units are rentals that are the host’s primary residence such that the host is present through the duration of the short-term rental. Limited Share Units may be offered for short-term rent 365 days of the year and will be subject to an annual $25.00 registration fee.

Home Share Units are also rentals that are the host’s primary residence that may be offered for short-term rent 365 days of the year. The host, however, need not be present through the duration of the short-term rentals, so long as the number of days booked for rental when the host is not present does not exceed 90 (consecutive or nonconsecutive) per year. Home Share Units will be subject to an annual $100.00 registration fee.

Investor Units are rentals that are not the host’s primary residence. Investor Units may be offered for short-term rental for up to 90 days (consecutive or nonconsecutive) per year and will be subject to an annual $500.00 registration fee.

Boston residents who participate in the short-term-rental economy are well advised to understand, and keep an eye on, proposed changes in housing law as regulations begin to promulgate in response to a growing industry.

Airbnb Tax Dropped from Budget after House Negotiations

By on August 8, 2017

This post updates our previous post regarding proposed taxation of revenue generated by Airbnb rentals.  Despite prior consideration of an Airbnb tax as early as July 2017, the proposal was dropped from the fiscal year 2018 budget proposal. Earlier this year, the state Senate pushed to apply Massachusetts’ state hotel tax, and local levies, on private residences rented for short stays by Airbnb and its competitors, but lawmakers in the House could not agree on a budget measure.

Although the so-called Airbnb tax will not be included in the 2018 fiscal year budget, Representative Aaron Michlewitz, a leader in the efforts to install an Airbnb tax, remains confident that the legislature will institute a tax plan for short-term housing. It seems all parties concerned — from Governor Charlie Baker to industry leader Airbnb — agreed that short-term housing in Massachusetts should be subject to some taxation along the way.  Thus far, however, no consensus could be reached to keep the tax on the 2018 budget proposal.  Expect more updates on this matter as they develop in state government.

Massachusetts Bill Would Regulate Short-Term Rentals Like Airbnb

By on August 26, 2015

Like many larger cities in the United States, Boston residents often offer up their homes or apartments to tourists looking for inexpensive short-term rentals.  These short-term rental arrangements are currently unregulated in Massachusetts.  However, recent negative press for services like Airbnb has prompted Massachusetts legislators to pursue regulating and taxing short-term housing rentals. 

Early this year, Massachusetts State Representative Aaron Michlewitz proposed a bill that would regulate short-term housing rentals, like those offered through Airbnb, Flipkey and Homeaway.  As drafted, House Bill 2618 would amend Chapter 64 of the Massachusetts General Laws to create a new Chapter 64M. 

Similar to the tax imposed on hotels, the proposed law would impose a 5% excise tax on short-term rentals and would allow local cities and towns to impose their own excise tax, up to 6% (Boston is permitted to impose a 6.5% tax).  Like a receipt from a hotel, the owner of the short-term rental would be required to give a detailed statement setting forth the amount collected in taxes. 

If passed, the new law would require the Department of Housing and Community Development to establish a “Short-Term Residential Registry.”  Each city and town in Massachusetts would have to develop a system for evaluating applicants by December 31, 2015.  Before renting a short-term rental, owners would be required to pay a $50 fee and apply for a two-year license with their city or town. 

In addition to owners offering their homes as rentals, the law would impose obligations upon listing websites like www.airbnb.com.  Those sites would be required to notify potential customers of the existence of the new law, the requirements of receiving and maintaining a short-term residential license, and the registration number of the residential unit.  A website that fails to provide such disclosures can be subject to a $1,000 per day fine. 

An owner who offers a short-term rental in violation of the proposed law would be guilty of a misdemeanor and subject to a $1,000 fine.  Moreover, if a city, town or the State Attorney General institutes a civil action against a person or entity in violation of the proposed law, the violator could be subject to a $1,000 per-day civil penalty.  The new law would also allow an “interested party” (e.g. a homeowner’s association) to join the suit.  Meaning, if a city, town or Attorney General commences an action, an affected homeowner’s association could seek its own relief against the violator.  In that scenario, the violator may be forced to pay the interested party’s attorneys’ fees and costs. 

If you currently rent your home on a short-term basis, or are considering doing so, make sure you continue to monitor House Bill 2618.  If it becomes law and you fail to comply, you could be subject to substantial penalties.