Massachusetts short-term rentals will now be subject to new regulations starting in July of 2019 thanks to a bill signed by Governor Charlie Baker at the end of December.
Massachusetts Airbnb Regulations
According to the new law, short-term rentals, such as Airbnb rentals and other vacation homes, will be subject to the 5.7% state lodging tax that is already in place for local hotels and traditional bed and breakfasts.
The bill also provides cities and towns with the ability to impose an extra 6% tax (6.5% in Boston) on these Airbnb rentals if they wish to. If a vacation rental owner rents out 2 or more units in the same community, they may be subject to a 9% tax if the city chooses to impose the extra fees. There will also be a 3% community impact fee for Airbnb rentals as well.
Besides allowing cities/towns to impose additional taxes, the new Massachusetts Airbnb regulations will also allow local governments to set additional restrictions as they please. Boston has already imposed short-term rentals restrictions which severely limit who can actually list their property for rent on the vacation rental website. Airbnb responded to this with a lawsuit.
Massachusetts will also be the first state to require that vacation rental owners register their Airbnb rentals with the state in order to operate legally. There will also be a requirement for short-term rental owners and those renting out rooms to obtain $1 million in liability insurance.
The new Massachusetts Airbnb regulations won’t affect vacation rental owners who rent out a room or space for less than 14 days a year. Gov. Baker was a proponent of this exemption in the new regulations.
Why Were the New Airbnb Regulations Imposed?
The major reason for the new Massachusetts short-term rental regulations comes from the growing popularity of Airbnb in the state. Before the bill, vacation rental property owners offered considerably cheaper rooms than local hotels thanks to the lack of any additional tax fees. The goal of the bill is to level out the competition between the traditional hotel industry and the emerging Airbnb industry.
What Does Airbnb Have to Say About the New Massachusetts Airbnb Regulations?
Airbnb has spoken out against the new short-term rental regulations calling them “flawed.” This is what a spokesperson for the company had to say:
“We’re proud of the community we’ve built in Massachusetts, with over 1.2 million travelers using Airbnb to visit the Commonwealth and nearly 2 million Bay Staters using Airbnb to travel at home and abroad in 2018 alone. While we are deeply disappointed in the flawed bill that emerged from Beacon Hill during the lame duck session, we will continue the fight to protect our community and the economic engine of short-term rentals for hosts, guests, and local small businesses.”
Sources say that the short-term rental conglomerate has not ruled out taking the state to court over the new regulations as it has done in Boston. They believe, however, that despite the new Massachusetts Airbnb regulations, the home-sharing industry will not experience hindered growth in the state.
Andrew Kalloch, Airbnb’s head of policy for Massachusetts, said:
“Home-sharing is here to stay because it offers fantastic economic value to guests and a fabulous economic opportunity to hosts.”
The company plans to release a report to show how Airbnb has had a positive effect on the economy in Massachusetts as Airbnb hosts made an estimated $256 million last year.
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