Updated: Jan 22, 2019
On December 28, 2018, Governor Baker signed into law an act "Regulating & Insuring Short-Term Rentals.” This is a Massachusetts state law, which will go into effect on July 1, 2019. While this law does not prohibit short-term rentals, it does [according to the Greater Boston Real Estate Board] “establish a tax on such uses as well as certain registration and regulatory requirements."
Boston was grappling with what to do in light of the many properties offered as short-term rentals i.e. 'AirBnBs'. Some believe they lead to higher rental prices for long term tenants, and others believe they disrupt neighbors and create a transient feeling in the neighborhood. Regardless of your opinion, one thing is for sure: they're here to stay.
What is a Short-Term Rental?
Have you ever rented an Airbnb for a weekend getaway? If so, you’ve had experience with a short-term rental. Any property can be classified as a “short-term rental” if they meet the following conditions: “at least one room in a dwelling is rented to an occupant for less than a period of thirty-one days and such accommodations are reserved in advance,” as stated by the GBREB. The law specifically exempts "at will" tenancies, and appears to also exempt other forms of tenancies (i.e. one month or longer rentals).
What are the Requirements for Short-Term Rentals?
Anyone operating a short-term rental must register their property and possess a Certificate of Registration prior to renting out their property. The specific requirements of registration, and the accompanying fees will be created by the Executive Office of Housing and Economic Development, and local municipalities will also be authorized to create registration systems.
If a property is used for more than 14 days per calendar year, the property is subject to the tax provisions of this statute. The taxes are imposed as followed:
5.7% - MA State Tax
6% (6.5% for Boston) - Local Municipalities can impose this and an additional 3% for professionally managed properties (owners of two or more properties in a town). Click here for the current tax rate for each town.
2.7% (Cape & Islands) - Fund for the Cape Cod and Islands Water Protection Fund.
Anyone operating a short-term rental is required to post a notice in the unit confirming the location of any fire extinguisher, gas shut-off valve, fire exits and fire alarms in the unit and building. Local municipalities may require additional safety inspections.
Anyone operating a short-term rental is required to maintain liability insurance in an amount not less than $1,000,000, covering bodily injury and property damage, unless the operator uses a rental platform that offers such coverage (Airbnb, HomeAway, VRBO offer this free).
To read the full statute, click here.
New Documents to Use with Short-Term Rentals:
We're always happy to discuss any aspects of short-term rentals so don't hesitate to reach out. It's been a relative grey area for the past few years and we're finally seeing the city hash out specific rules and regulations that change the landscape.