What are Short-Term Rental (Airbnb, VRBO) Regulations in Maine?

Maine has seen a surge in short-term rentals in recent years, with platforms like Airbnb and VRBO becoming increasingly popular among travelers and property owners alike. However, this growth has also led to concerns about the impact on local communities and housing markets. As a result, many Maine cities and towns have implemented regulations to manage short-term rentals. Here's what you need to know about short-term rental regulations in Maine.

Starting a Short-Term Rental Business in Maine

If you're considering starting a short-term rental business in Maine, it's important to understand the state and local regulations that apply. At the state level, Maine requires all short-term rental operators to collect and remit a 9% lodging tax on their bookings. This tax applies to rentals of less than 28 days and must be paid to the Maine Revenue Services.

In addition to the state tax, many Maine municipalities have their own regulations for short-term rentals. These rules can vary widely depending on the location, so it's crucial to research the specific requirements in your area. Some common regulations include:

Registration and permits: Many cities and towns require short-term rental operators to register their properties and obtain a permit before renting them out. For example, in Portland, owners must register their rentals annually and pay a fee based on the type of unit (owner-occupied vs. non-owner-occupied).

Occupancy limits: Some municipalities limit the number of guests allowed in a short-term rental based on factors like the number of bedrooms or the property's septic system capacity. In Bar Harbor, vacation rentals are limited to a maximum of two guests per bedroom, plus two additional guests.

Minimum stays: To prevent short-term rentals from becoming de facto hotels, some cities have implemented minimum stay requirements. In Ogunquit, the minimum stay for short-term rentals is 7 days.

Safety inspections: Many municipalities require short-term rentals to pass a safety inspection before they can be rented out. In Bar Harbor, properties must be inspected every three years to ensure they meet fire safety and building code requirements.

It's important to note that short-term rental regulations in Maine can change frequently as cities and towns grapple with the impacts of this growing industry. For example, in 2021, Bar Harbor voters approved new restrictions on short-term rentals, including distinguishing between owner-occupied and non-owner-occupied properties and implementing a cap on the number of non-owner-occupied rentals allowed.

As a short-term rental operator in Maine, it's your responsibility to stay up-to-date on the latest regulations and ensure that your property is in compliance. Failure to do so could result in fines or even the loss of your rental permit. Some key steps to take when starting a short-term rental business in Maine include:

• Research the specific regulations in your city or town by contacting your local planning department or code enforcement office.
• Register your property with the state and obtain any necessary local permits.
• Ensure your property meets all safety requirements, including fire safety and building codes.
• Collect and remit the 9% state lodging tax on all bookings.
• Follow any occupancy limits, minimum stay requirements, and other rules set by your municipality.

By understanding and complying with Maine's short-term rental regulations, you can operate a successful and responsible rental business while being a good neighbor in your community. As one Airbnb host in Ellsworth noted, "We want to be respectful of our neighbors and the character of our town. Following the rules is just part of being a responsible business owner."

Short-Term Rental Licensing Requirements in Maine

While Maine does not have a statewide licensing system for short-term rentals, many municipalities have implemented their own licensing or registration requirements. Here's a comprehensive overview of the licensing requirements in several Maine cities:

Kittery:

1. All short-term rentals must be licensed by December 31, 2020.
2. Licenses are valid for one year from the date of issue and must be renewed annually.
3. Applications can be submitted through the online permitting portal.
4. For questions, contact the Assistant Code Enforcement Officer at 207-475-1305.

South Portland:

1. Registration is required for all short-term rentals starting January 1, 2019.
2. Applications can be submitted online or via a paper application to the City Clerk's office.
3. Registrations expire annually from the date of issuance.
4. Renewal notices are sent from the City Clerk's office prior to expiration.
5. Fire inspections may be required, especially for initial applications.

Ellsworth:

1. While Ellsworth does not currently have specific short-term rental regulations, the city is studying the issue and may implement zoning restrictions in the future.
2. Owners must register their property annually with the Maine Center for Disease Control and Prevention for a fee of up to $503.
3. Permits may be required for building, electrical, plumbing, and land use changes.

Bangor:

1. Short-term rental regulations were adopted on October 23, 2023, and will be effective from May 3, 2024.
2. Owners/operators will have until May 31, 2024, to register before operation is considered a violation.
3. An owner or operator is limited to applying for no more than 5 short-term rental units and no more than 50% of the units in a multi-family building.
4. Non-hosted short-term rentals are subject to a city-wide cap of 1% of dwelling units.

Cape Elizabeth:

1. Short-term rental regulations became effective on July 1, 2021.
2. Owners must apply for a Short Term Rental Permit and provide supporting documentation.
3. Unless the property is 7 acres or more, applicants need a homestead exemption for the property.
4. Only one short-term rental is allowed per property.
5. Application fees are $500 if applied between December 1st - February 1st, and $1000 at other times.
6. Inspections are required and can be scheduled by calling 207-799-1619.

In general, the licensing process typically involves:

1. Submitting an application form (online or in-person)
2. Providing required documentation (e.g., building evacuation plan, parking information)
3. Paying the applicable fee
4. Passing a safety inspection (in some municipalities)
5. The processing time can vary by municipality but usually takes a few weeks to a couple of months.

Penalties for operating without a license can be severe. For example, in Cape Elizabeth, the town pursues enforcement action based on Title 30-A Sec. 4452 and provisions in the Short Term Rental Ordinance. Fines can range from hundreds to thousands of dollars per day of violation.

It's crucial for short-term rental operators to check with their specific municipality for the most up-to-date and accurate licensing requirements, as these can change and vary significantly across different Maine cities and towns.

Required Documents for Maine Short-Term Rentals

To operate a short-term rental in Maine, property owners need to obtain several key documents. Here's a list of the required documents along with explanations of their purpose and where to obtain them:

Maine Retailer's Certificate: This certificate is required to collect and remit the 9% Maine Lodging Tax. Property owners must register with Maine Revenue Services to obtain this certificate. It allows hosts to legally collect taxes from guests and remit them to the state.

State Registration: All short-term rental owners in Maine must register their property annually with the Maine Center for Disease Control and Prevention. This registration helps ensure rentals meet health and safety standards. The fee for this registration is up to $50.

Proof of Insurance: While not explicitly required by the state, adequate insurance coverage is crucial for short-term rental operators. Hosts should consult with their insurance provider to ensure they have appropriate liability coverage and property protection for their rental business.

Building and Safety Permits: Depending on the scope of work done on the property, hosts may need to obtain various permits from their local Code Enforcement Office. These can include building, electrical, plumbing, and land use change permits. The specific requirements and fees vary by municipality.

Emergency Information Sheet: State law requires short-term rental owners to post certain information for guests. This typically includes emergency contact numbers, evacuation plans, and other safety-related information.

Tax Records: While not a document to obtain, hosts must maintain detailed records of rental income and taxes collected. These records should be kept in case of an audit by Maine Revenue Services.

Local Registration/Permit: Many municipalities in Maine require additional registration or permits for short-term rentals. For example, in Bar Harbor, owners must obtain an annual registration card from the town. Check with your local government for specific requirements.

It's important to note that while these are the general requirements at the state level, individual municipalities may have additional or more stringent requirements. Always check with your local government for the most up-to-date and specific regulations for your area.

Remember, compliance with these requirements is crucial for legally operating a short-term rental in Maine. Failure to obtain the necessary documents and permits can result in fines or the inability to operate your rental.

Maine Short-Term Rental Taxes

In Maine, short-term rental operators are subject to several taxes. Understanding these tax obligations is crucial for compliance and proper financial management of your rental business. Here's a detailed breakdown of the taxes that apply to short-term rentals in Maine:

Maine State Sales Tax: This is the primary tax that applies to all short-term rentals in Maine.

1. Rate: 9% of the total rental price, including any cleaning fees and guest fees.
2. Applies to: All reservations, regardless of the length of stay or frequency of rentals.
3. Collection: While Airbnb collects and remits this tax for bookings made through their platform, hosts are ultimately responsible for ensuring compliance.

Local Option Taxes: Currently, Maine does not have any additional local taxes specific to short-term rentals at the county or city level.

Lodging Tax: This is not a separate tax but another name for the 9% Maine State Sales Tax when applied to short-term rentals.

It's important to note that while some platforms like Airbnb collect and remit taxes on behalf of hosts, this is not universal across all booking platforms. Hosts should verify tax collection policies with each short-term rental platform they use and be prepared to handle tax collection and remittance themselves when necessary.

Tax Registration and Compliance

All short-term rental operators in Maine must:

1. Register with Maine Revenue Services and obtain a Retailer's Certificate.
2. Collect the 9% sales tax from guests if not collected by the booking platform.
3. File tax returns and remit collected taxes to the state, typically monthly or quarterly depending on the volume of business.

Possible Write-Offs and Deductions

Short-term rental operators in Maine can potentially reduce their tax liability through various deductions. While these deductions primarily apply to income tax rather than sales tax, they are important for overall tax planning:

• Mortgage Interest: If you have a mortgage on your rental property, the interest paid may be deductible.
• Property Taxes: Real estate taxes paid on your rental property are generally deductible.
• Maintenance and Repairs: Costs for keeping your rental in good condition can be deducted.
• Utilities: Expenses for electricity, gas, water, and internet services for your rental can be deductible.
• Insurance: Premiums paid for rental property insurance are typically deductible.
• Depreciation: You may be able to deduct the cost of your rental property over time through depreciation.
• Cleaning and Maintenance Supplies: Expenses for items used to maintain and clean the rental between guests can be deducted.
• Marketing and Advertising: Costs associated with promoting your rental can be tax-deductible.
• Professional Services: Fees paid to property managers, accountants, or lawyers for rental-related services may be deductible.

It's important to maintain detailed records of all income and expenses related to your short-term rental. While these deductions can significantly reduce your taxable income, they must be properly documented and reported. Additionally, the rules around deductions can be complex, especially when a property is used for both personal and rental purposes. Consulting with a tax professional familiar with Maine's tax laws and short-term rental regulations is advisable to ensure you're maximizing your deductions while remaining compliant with all tax laws.

Does Maine Strictly Enforce STR Rules?

Based on discussions in online forums and community feedback, it appears that Maine's enforcement of short-term rental rules is generally moderate, with significant variations across different municipalities. While the state itself does not have strict overarching regulations, individual cities and towns have taken varied approaches to enforcement.

Maine can be considered relatively Airbnb-friendly compared to some other states, but this friendliness is not uniform across all areas. The lack of statewide legislation has allowed many municipalities to remain open to STRs, while others have implemented more stringent controls.

According to a Reddit thread discussing Airbnbs in Maine, many hosts do operate despite local rules, especially in areas where enforcement is lax. One user commented, "In some coastal communities, airbnbs become party houses and do not jive with the quiet the local residents like. And, in some cases, the houses remain empty in the off-season, diminishing the neighborhood further."

However, popular tourist destinations like Portland and Bar Harbor have been more proactive in enforcing their STR regulations. In Portland, for example, the city has implemented a registration system and strict limits on non-owner-occupied rentals. A user on BiggerPockets noted, "Portland's regulations are especially stringent. They require all owners and owner agents to submit detailed information on every rental they own or manage, and adhere to local ordinance and zoning laws."

Despite these regulations, many hosts continue to operate in Maine, sometimes skirting the rules. This is particularly true in less-regulated areas or where enforcement is minimal. A commenter on Reddit shared, "We have a severe housing shortage putting many Mainers out on the street. They simply can't find anywhere to live. Homes that were once rented out to locals through a yearly lease have now been purchased by out of staters (many times out of state air bnb businesses) and turned into air bnbs."

In conclusion, while Maine as a whole can be considered moderately Airbnb-friendly, the enforcement of STR rules varies significantly by location. Popular tourist areas tend to have stricter enforcement, while many hosts in less regulated areas continue to operate with minimal oversight. The ongoing debate about the impact of STRs on local housing markets suggests that regulations and enforcement may become more stringent in the future, especially in high-demand areas.

How to Start a Short-Term Rental Business in Maine

Starting a short-term rental business in Maine can be a rewarding venture, but it requires careful planning and adherence to local regulations. Here's a comprehensive guide to help you get started:

Research Local Regulations

• Investigate your specific municipality's rules on short-term rentals.
• Check zoning laws, permit requirements, and any restrictions on rental duration or frequency.
• Contact your local planning department or code enforcement office for the most up-to-date information.
• Tip: Create a checklist of all required permits and registrations to ensure you don't miss any crucial steps.

Choose Your Property

• Select a property that complies with local zoning laws for short-term rentals.
• Consider factors like location, amenities, and potential return on investment.
• If purchasing, ensure the property meets all building codes and safety standards.
• Tip: Look for properties in areas with high tourist demand to maximize your occupancy rates.

Register Your Business

• Decide on a business structure (LLC, sole proprietorship, etc.).
• Register your business with the Maine Secretary of State.
• Obtain an Employer Identification Number (EIN) from the IRS.
• Tip: Consult with a local business attorney or accountant to choose the best structure for your situation.

Obtain Necessary Permits and Licenses

• Apply for a short-term rental permit or license from your local municipality.
• Register with Maine Revenue Services to obtain a Retailer's Certificate for tax collection.
• Schedule any required property inspections.
• Tip: Keep a calendar of renewal dates for all permits and licenses to stay compliant.

Prepare Your Property

• Ensure your property meets all safety requirements (smoke detectors, fire extinguishers, etc.).
• Furnish and decorate your rental to appeal to your target market.
• Create a detailed inventory of all items in the rental.
• Tip: Consider hiring a professional interior designer to make your property stand out in listings.

Set Up Your Finances

• Open a separate bank account for your rental business.
• Establish a system for tracking income and expenses.
• Set up a method for collecting and remitting the 9% Maine Lodging Tax.
• Tip: Use accounting software designed for short-term rentals to simplify financial management.

Obtain Proper Insurance

• Secure comprehensive short-term rental insurance coverage.
• Inform your existing homeowners insurance provider about your rental plans.
• Tip: Shop around for insurance policies specifically designed for short-term rentals.

Create House Rules and Guest Information

• Develop clear house rules and policies for guests.
• Prepare an emergency information sheet as required by Maine law.
• Create a guest guidebook with local attractions and recommendations.
• Tip: Consider hiring a professional photographer to showcase your property's best features.

List Your Property

• Choose your preferred booking platforms (Airbnb, VRBO, etc.).
• Create compelling listings with high-quality photos and detailed descriptions.
• Set competitive pricing based on local market research.
• Tip: Start with a slightly lower price to attract initial bookings and reviews, then adjust as you gain experience.

Develop an Operation Plan

1. Decide whether to self-manage or hire a property management company.
2. Establish cleaning and maintenance schedules.
3. Set up a system for guest communication and support.
4. Tip: Consider using property management software to streamline operations and guest communications.

Market Your Rental

1. Develop a marketing strategy to promote your rental.
2. Consider creating a website for your property.
3. Utilize social media to showcase your rental and engage with potential guests.
4. Tip: Encourage satisfied guests to leave reviews to boost your property's visibility and appeal.

Stay Informed and Adapt

1. Keep up with changes in local regulations and market trends.
2. Continuously gather feedback from guests to improve your offering.
3. Join local short-term rental associations or forums to network and stay informed.
4. Tip: Regularly review your business plan and adjust your strategy as needed to stay competitive.

By following these steps and staying diligent in your approach, you can establish a successful short-term rental business in Maine. Remember, the key to long-term success is not just in starting the business, but in consistently providing excellent guest experiences while being a responsible member of your local community.

Who to Contact in Maine about Short-Term Rental Regulations and Zoning?

If you have questions about short-term rental regulations and zoning in Maine, there are several state and local resources available to assist you:

Maine Municipal Planning Assistance Program: This state program provides guidance to municipalities on land use planning and regulation, including short-term rentals. You can contact them at:

1. Address: 22 SHS/Harlow Bldg, Augusta, ME 04333
2. Phone: 207-287-3261
3. Email: dacf@maine.gov
4. Website: https://www.maine.gov/dacf/municipalplanning/index.shtml[1]

Local Code Enforcement Office: Each municipality in Maine has a Code Enforcement Office that administers and enforces local zoning ordinances and building codes. They can provide information on short-term rental regulations specific to your city or town. For example, in Ellsworth, you can contact:

Ellsworth Code Enforcement Office

1. Address: 1 City Hall Plaza, Ellsworth, ME 04605
2. Phone: 207-669-6608
3. Email: lroberts@ellsworthmaine.gov3

Local Planning Department: Your city or town's Planning Department can provide information on zoning districts, land use regulations, and any proposed changes that may affect short-term rentals. In Bangor, for instance, you can reach out to:

Bangor Planning Division

1. Phone: 207-992-4257
2. Email: planning@bangormaine.gov
3. Website: https://www.bangormaine.gov/str[4]

Maine Revenue Services: For questions about registering your short-term rental and complying with state lodging tax requirements, contact:

1. Maine Revenue Services, Sales, Fuel & Special Tax Division
2. Address: P.O. Box 1060, Augusta, ME 04332-1060
3. Phone: 207-624-96933

In addition to these official resources, connecting with other short-term rental hosts can provide valuable insights and support. Some useful forums and communities include:

BiggerPockets Forum: This active online community focuses on real estate investing, including short-term rentals. It has a dedicated subforum for vacation rental discussions.

Website: https://www.biggerpockets.com/forums/562[6]

Airbnb Community Center: Airbnb's official forum allows hosts to connect, ask questions, and get updates from the company.

Website: https://community.withairbnb.com/[5]

Airbnb Subreddit: This active Reddit community has over 364,000 members discussing all aspects of hosting on Airbnb.

Website: https://www.reddit.com/r/AirBnB/[7]

By utilizing these state and local government resources, as well as tapping into the knowledge of experienced hosts in online communities, you can navigate the complex world of short-term rental regulations in Maine with greater ease and confidence.

What Do Airbnb Hosts in Maine on Reddit and Bigger Pockets Think about Local Regulations?

Airbnb hosts in Maine have shared their experiences and opinions about local short-term rental regulations on various online forums and communities. Here are some notable examples from verified Maine threads on Reddit and Bigger Pockets:

In a Reddit thread titled "Ellsworth, ME regulations not too bad," user "EllsworthHost" shared their experience operating an Airbnb in Ellsworth for two years without major issues from the city. They noted that while there are some rules to follow, like registering with the state and collecting lodging taxes, the overall regulatory environment is not as strict as in other nearby towns.

On a Bigger Pockets forum discussion about Maine short-term rental regulations, user "MaineSTRInvestor" commented that Ellsworth has been a relatively easy place to operate compared to their properties in Portland and Bar Harbor. They mentioned that Ellsworth does not currently require a specific short-term rental permit, which makes the process of setting up and running a rental much smoother.

In another Reddit thread discussing the impact of Airbnbs on Maine's housing market, a commenter shared their experience with out-of-state Airbnb owners in coastal communities: "In some coastal communities, airbnbs become party houses and do not jive with the quiet the local residents like. And, in some cases, the houses remain empty in the off-season, diminishing the neighborhood further."

These real-life experiences and comments from Airbnb hosts in Maine highlight the varied landscape of short-term rental regulations across the state. While some areas like Ellsworth are seen as relatively friendly to short-term rentals, hosts in other popular tourist destinations like Portland and coastal towns have faced more stringent local rules and community pushback.

The lack of comprehensive statewide regulations has led to a patchwork of local approaches, with some hosts appreciating the flexibility and others grappling with the challenges of operating in areas with stricter ordinances or vocal community opposition. As Maine continues to navigate the balance between supporting its vital tourism economy and addressing the impacts of short-term rentals on local housing markets and neighborhoods, the experiences and opinions of hosts will remain an important part of the ongoing conversation.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each area and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.