If you intend to rent your own home this summer, be prepared for the changes in the State Law effective July 1, 2019. On December 28, 2018, Governor Baker signed An Act Regulating and Insuring Short-Term Rentals, which sets forth a complete framework for the regulation of short-term leases. The new law has numerous new requirements, including registration, the charge of each State and local taxes, payment of fees, and insurance.
A brief-term rental includes an apartment, residence, cottage, and condominium rental where at least one room or unit is rented out by an operator through the use of superior reservations. The Act consists of the law of online condominium groups such as Airbnb, FlipKey, and VRBO. Hotels, resorts, lodging houses, and bed and breakfast institutions aren’t considered short-term rentals.
All brief-term rental operators may be required to register with the Massachusetts Department of Revenue (“DOR”). Operators may also select to permit an intermediary, or different agent, to handle the condo in their assets, which can register and pay returns and taxes because of DOR on their behalf. The State will keep a quick-time period rental registry that will be available to the general public.
The new law imposes State and local excise taxes on quick-time period rentals, which are rented for more than 14 days in a calendar year starting on July 1, 2019. This taxation will apply to any condominium contract entered into on or after January 1, 2019. Short-term rentals may be required to pay the five percent.7% State excise tax fee to the DOR, and groups can add up to six local taxes. Zero %, and 6.Five percent in Boston.
There are also new insurance necessities under the Act. Operators of short-term leases must keep liability coverage of not less than $1,000,000 to cover every short-term rental unless such short-term apartment is obtainable through a hosting platform that maintains such insurance. Finally, neighborhood municipalities may additionally charge a further network effect fee of up to 3% on positive brief-time period leases. There are some different fees authorized by certain municipalities, and these fees, not like taxes, are paid without delay to the municipality. The law additionally allows for local laws to impose fines for violations of neighborhood legal guidelines. If you have any questions concerning neighborhood fees or policies, it is strongly recommended that you talk with your nearby municipality.
