Best Practices in Regulation, Licensing, and Taxation of Short Term Rentals

Leverage our expertise to benefit your community

Our experience in working with municipalities since 2011 has given us a perspective on best practices to achieve the objectives the municipalities establish regarding short term rentals.

The ordinances, fees and taxes, and compliance procedures work together as a tailored package to achieve those objectives. We have found that setting three goals for this package achieves the best long term results for the municipality:

  • Make compliance requirements clear and reasonably easy to achieve
  • Make it evident to property owners that non-compliance is expensive and futile
  • Establish systems and procedures that ensure the cost of  monitoring compliance goes down over time

The key items outlined below highlight our experience in achieving these goals.

Regulation of Short Term Rentals

Assuming that commercial hotels, motels and B&Bs are licensed, the focus is on individual units that are rented for a relatively short period of time to different individuals.

• Most municipalities choose 30 days as the duration cut-off.

Restrictive sometimes choose 60 days.

Most municipalities do not include properties that are corporate housing – renting to new or visiting employees of a local company.

Must also decide whether to differentiate between rental of entire units (homestays), a separate room within a unit (homeshare) or a bed (roomshare). Encouraging often establish more lenient rules and lower fees for the latter two.

Licensing of Short Term Rentals

Taxation of Short Term Rentals