The popularity of short-term rentals in Boston and in cities across the country means that government has found the need to step in and regulate this type of rental opportunity. From luxurious corporate short-term rentals to thousands of properties listed on Airbnb and similar sites, short-term rentals for business and pleasure continue to be on the rise.
For investors and owners of short-term rental property, a common question is how to best navigate the Massachusetts legislative process. Right now there are no standard regulations in place but this may be about to change. Read on to learn about the pros and cons of short-term rentals and what the future holds for legislature.
Pros of Boston Short-Term Rentals
Investors and property owners who rent out short-term rentals to tourists and/or corporate clients stand to make a lot of money. For example, the ease of attracting the best talent to Boston companies with furnished corporate rentals while they look for a permanent place to live is a win-win situation for everyone involved.
The short-term rental market is not going anywhere. People are looking for more than what a hotel can offer, especially corporate clients. Furnished homes or apartments makes visiting Boston or relocating here easier and more affordable.
Cons of Boston Short-Term Rentals
People are complaining about short-term rentals, particularly when it comes to tourists. With people constantly in and out of a property, staying a night here and a few days there, residents of residential communities are becoming increasingly concerned.
For this reason, Massachusetts is proposing a 5 percent excise tax for these properties, with a 6 percent excise tax exclusively on short-term rentals in Boston. Not only that, short-term rental property owners will also have to apply to be included in a Short-Term Residential Registry and pay a $50 fee to register their property for two years. Violations of this law could see fines of up to $1,000 a day.
At this time, there are no fines being instituted by the Massachusetts government but property owners of short-term rentals, including corporate rentals, need to pay close attention to House Bill 2618. If this piece of legislation is passed, applying for and paying for a license as well as paying taxes will become the norm for short-term rental property owners and investors. These taxes and fees are similar to what the hotel industry is responsible for.
What Does the Future of Short-Term Rental Regulation Hold?
With Boston as one of the first cities to introduce a bill for the regulation and taxing of short-term corporate rentals, we could also see a move by other areas of government to add their own taxes. In fact, the more profitable this business becomes, the more government hands will reach out to grab a piece of the action.
With a strong market for short-term rentals in Boston, we expect regulations to pass and more to be added in the future. As long as these taxes and regulations do not cut deeply into profits, offering short-term rentals will remain an extremely lucrative business to own or invest in Boston and in other cities in the United States.
Do you need help navigating the legislative process in Boston when it comes to your short-term rental property? At The Brennan Group, we can help. Contact us today at 617-305-4120 or fill out our contact form.
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