New York Short-Term Rental Regulation: A Guide For Airbnb Hosts

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

New York has some of the strictest short-term rental regulations in the United States, especially in New York City. Navigating the complex web of state and local laws is crucial for anyone looking to start an Airbnb or VRBO business in the Empire State. This article breaks down the key rules and requirements for operating a short-term rental in New York.

Starting a Short-Term Rental Business in New York

To legally operate a short-term rental business in New York, hosts must follow these general steps:

Register the business: Short-term rental operators should register their business with the state and obtain an Employer Identification Number (EIN) from the IRS if operating as an LLC, corporation, or partnership.

Obtain necessary licenses and permits: While New York State does not require a statewide short-term rental license, many cities and counties have their own permitting requirements. For example, New York City mandates that hosts register with the Mayor's Office of Special Enforcement (OSE) and include their registration number in all listings.

Comply with zoning and occupancy rules: Local zoning laws often restrict where short-term rentals can operate and how many guests are allowed per stay. In NYC, short-term rentals are generally prohibited in Class A multiple dwellings (like apartment buildings) unless the host is present and there are no more than two paying guests.

Collect and remit taxes: Short-term rental hosts must collect state and local sales taxes, as well as any applicable hotel occupancy taxes. In NYC, this includes a 5.875% city hotel room occupancy tax, $1.50 per day hotel unit fee, and 8.875% city sales tax on top of the state sales tax.

Failure to comply with these regulations can result in hefty fines. In New York City, illegal short-term rental operators face penalties ranging from $1,000 to $7,500.

Short-Term Rental Licensing Requirement in New York

New York State does not have a statewide short-term rental licensing requirement. Instead, the regulation of short-term rentals is left to local city and county governments. However, New York City has its own strict licensing rules for short-term rentals.

As of January 9, 2022, New York City adopted Local Law 18, also known as the Short-Term Rental Registration Law. This law requires all short-term rental hosts in the city to register with the Mayor's Office of Special Enforcement (OSE) and obtain a registration number.

To apply for a short-term rental registration in New York City, hosts must:

• Be a permanent occupant of the dwelling unit (either as an owner or tenant)
• Certify that their lease agreement does not prohibit short-term rentals
• Describe the units that short-term occupants will be allowed to occupy
• Certify that they understand and agree to comply with applicable codes, laws, and other legal requirements
• Provide booking service information for all listings on platforms like Airbnb and VRBO34

The application fee for a short-term rental registration in New York City is $145. Hosts must apply through the city's Short-Term Rental Registration portal, providing personal and property details.

In addition to obtaining a registration number, hosts must also:

1. Conspicuously display their registration certificate inside the rental unit
2. Include their registration number in all advertisements and listings
3. Collect and remit applicable taxes, including state and local sales taxes, hotel room occupancy taxes, and per-night hotel unit fees

Starting September 5, 2023, booking platforms like Airbnb and VRBO are prohibited from processing transactions for unregistered short-term rentals in New York City. The city's initial enforcement will focus on ensuring platforms use the verification system correctly and stop processing unverified transactions.

Failure to comply with these regulations can result in hefty fines for both hosts and booking platforms. Hosts face penalties ranging from $1,000 to $5,000, while platforms can be fined up to $1,500 per violation.

It's important to note that even with registration, there are still significant limitations on short-term rentals in New York City. Hosts cannot rent out an entire apartment for stays under 30 days unless the host is present throughout. They are limited to having no more than two paying guests at a time in their primary residence.

In summary, while New York State does not require a short-term rental license, New York City has implemented a strict registration system to regulate the industry. Hosts must carefully review the requirements and operational constraints before listing their property to avoid costly penalties. Consulting with a local attorney well-versed in short-term rental law can help ensure full compliance.

Required Documents for New York Short-Term Rentals

To register a short-term rental in New York City, hosts must provide a comprehensive set of documents to the Mayor's Office of Special Enforcement (OSE). These documents serve to verify the host's identity, establish their legal right to rent the property, and ensure compliance with safety regulations. Here are the key required documents:

Proof of Identity: Hosts must submit a copy of an unexpired government-issued photo ID, such as a driver's license, passport, or IDNYC card. This document verifies the host's identity and must match the name used in the registration application.

Proof of Permanent Occupancy: Hosts must provide two documents from an approved list to prove they are the permanent occupant of the rental unit. Acceptable documents include utility bills, bank statements, insurance documents, or government correspondence showing the host's name and address. These documents must be dated within the past 60 days.

Lease Agreement (for tenant hosts): If the host is a tenant rather than the property owner, they must submit the portion of their lease showing the rental period, unit address, and names and signatures of all parties. This establishes the host's legal right to sublease the unit for short-term rentals.

Diagram of Normal and Emergency Exit Routes: Hosts are required to post a diagram showing normal and emergency exit routes within the rental unit. This diagram must be included in the registration application to verify compliance with safety requirements.

Liability Insurance: While not explicitly required for registration, hosts are strongly encouraged to obtain liability insurance that covers the specific use of the property for short-term rentals. Some listing platforms like Airbnb provide limited coverage, but additional insurance is recommended to fully protect hosts.

Property Ownership Documentation (for owner hosts): If the host is the owner of the property, they may need to provide proof of ownership, such as a deed or property tax bill. This requirement varies depending on the specific circumstances of the application.

Hosts must submit these documents electronically through the OSE's online Short-Term Rental Registration portal at https://www1.nyc.gov/site/specialenforcement/registration-law/str-registration-portal.page. The registration application also requires hosts to agree to abide by all applicable short-term rental laws and regulations.

It's crucial for hosts to carefully review the OSE's requirements and ensure they have all necessary documents before beginning the registration process. Incomplete applications or missing paperwork can result in delays or rejection of the registration. By diligently preparing the required materials, hosts can streamline the process and move one step closer to legally operating a short-term rental in New York City.

New York Short-Term Rental Taxes

Operating a short-term rental business in New York involves paying several different taxes at the state and local levels. It's crucial for hosts to understand and comply with these tax obligations to avoid penalties and ensure the legal operation of their rental property. Here's a breakdown of the key taxes that apply to short-term rentals in New York:

New York State Sales Tax: Short-term rentals are subject to the statewide sales tax rate of 4%. This tax is administered by the New York State Department of Taxation and Finance and applies to rentals of less than 90 consecutive days.

Local Sales Tax: In addition to the state sales tax, many cities and counties in New York impose their own local sales taxes on short-term rentals. These rates vary by jurisdiction but typically range from 3% to 4%. For example, New York City has a local sales tax of 4.5%, bringing the total sales tax rate for short-term rentals in the city to 8.5%.

Local Lodging/Hotel/Occupancy Tax: Many localities in New York also levy a separate lodging, hotel, or occupancy tax on short-term rentals. These taxes are based on a percentage of the rental price and are used to fund local tourism promotion efforts and infrastructure. Rates vary widely across the state, ranging from 3% to 6%. In New York City, the Hotel Room Occupancy Tax is 5.875% of the listing price (including cleaning fees) for reservations of fewer than 30 consecutive days.

Hotel Unit Fee: New York City charges an additional $1.50 per day fee on each short-term rental unit. This fee is paid by the host and is separate from the occupancy and sales taxes.

It's important to note that in most cases, vacation rental platforms like Airbnb and Vrbo do not automatically collect and remit these taxes on behalf of hosts in New York. This means that hosts are responsible for registering with the appropriate tax authorities, collecting the taxes from guests, and filing periodic tax returns to remit the collected taxes.

Tax Deductions for Short-Term Rental Hosts

While short-term rental taxes can add up, hosts may be able to offset some of these costs by claiming certain expenses as tax deductions. Some common deductible expenses for short-term rental businesses include:

1. Mortgage interest and property taxes
2. Rental insurance premiums
3. Cleaning and maintenance costs
4. Utilities (if paid by the host)
5. Supplies and amenities provided to guests
6. Advertising and platform fees
7. Depreciation of furniture and equipment used in the rental

Hosts should keep detailed records of all rental-related expenses and consult with a tax professional to ensure they are claiming all eligible deductions and complying with all tax laws.

In summary, short-term rental hosts in New York must navigate a complex web of state and local taxes, including sales taxes, occupancy taxes, and per-night fees. Failure to properly collect and remit these taxes can result in significant penalties. By understanding their tax obligations and taking advantage of available deductions, hosts can minimize their tax burden and run a successful short-term rental business in the Empire State.

Does New York Strictly Enforce STR Rules?

New York City has taken a firm stance on enforcing its short-term rental rules to regulate the growing market of Airbnb, VRBO, and other similar platforms. Since the regulations came into effect in September 2023, the city has demonstrated a commitment to ensuring compliance and maintaining the integrity of its housing market.

Compared to other major cities, New York is decidedly not Airbnb-friendly. The stringent requirements for host registration, occupancy limits, and host presence during guest stays have effectively created a "de facto ban on short-term rentals" in the city, according to Airbnb. The company has unsuccessfully fought against these regulations, arguing that they unfairly target their business model.

Despite the strict rules, some hosts continue to operate short-term rentals in New York City without proper registration or in violation of the regulations. However, this comes with significant risks. Failure to comply with the law can result in hefty fines ranging from $1,000 to $7,500 per violation. The city has also been proactive in identifying and penalizing non-compliant listings.

The general consensus among the real estate investing community on platforms like BiggerPockets and Reddit is that New York City is not an ideal location for short-term rental investments due to the restrictive regulations and active enforcement. Many investors advise against pursuing STRs in the city, as the potential risks and penalties outweigh the potential rewards.

In addition to holding individual hosts accountable, New York City has also placed responsibility on booking platforms themselves. Platforms that facilitate short-term rentals are expected to ensure that hosts are registered and compliant with city regulations. Failure to do so can lead to penalties, including fines for processing payments from unregistered hosts.

Despite legal challenges and lawsuits from various stakeholders, New York City has remained steadfast in its enforcement efforts. The city has continued to implement and enforce its regulations, demonstrating a commitment to regulating the short-term rental market effectively.

The strict enforcement of STR rules in New York City has had a significant impact on the industry. Hosts are compelled to comply with regulations to avoid penalties, leading to a more regulated and transparent short-term rental market in the city. This enforcement has also helped address concerns about the impact of short-term rentals on the availability of long-term housing options.

In summary, New York City strictly enforces its short-term rental rules, making it one of the least Airbnb-friendly cities in the United States. While some hosts may still operate despite the regulations, the risks of non-compliance are high. Investors looking to enter the short-term rental market are generally advised to consider other locations with more favorable regulatory environments.

How to Start a Short-Term Rental Business in New York

Starting a short-term rental business in New York requires careful planning and adherence to strict regulations, especially in New York City. Here's a step-by-step guide to help you navigate the process:

1. Research local regulations: Before investing in a property or listing your existing home, thoroughly research the short-term rental regulations in your specific city and county. Pay close attention to zoning laws, occupancy limits, and registration requirements. In New York City, familiarize yourself with the Multiple Dwelling Law and the city's Short-Term Rental Registration Law.
2. Determine your rental strategy: Decide whether you want to rent out a portion of your primary residence or invest in a separate property for short-term rentals. Keep in mind that in New York City, you can only legally rent out a portion of your home while you are present during the guest's stay.
3. Register your business: If you plan to operate your short-term rental as a business entity (e.g., LLC or corporation), register your business with the New York State Department of State. Obtain an Employer Identification Number (EIN) from the IRS for tax purposes.
4. Obtain necessary permits and licenses: In New York City, you must register your short-term rental with the Mayor's Office of Special Enforcement (OSE) and obtain a registration number. This process involves submitting personal and property details, agreeing to comply with applicable laws, and paying a $145 fee. Other cities may have their own permitting requirements.
5. Prepare your property: Ensure your rental property is safe, clean, and well-maintained. Install smoke and carbon monoxide detectors, provide fire extinguishers, and create a diagram of emergency exit routes. Furnish and decorate the space to make it inviting for guests.
6. List your property: Choose a vacation rental platform like Airbnb or VRBO to list your property. Create an attractive listing with high-quality photos, detailed descriptions, and accurate information about amenities and house rules. In New York City, you must include your OSE registration number in all listings.
7. Set competitive rates: Research similar listings in your area to determine competitive nightly rates. Consider factors like seasonality, events, and demand when setting your prices. Utilize dynamic pricing tools to automatically adjust rates based on market conditions.
8. Manage bookings and communication: Respond promptly to guest inquiries and booking requests. Maintain a clear and friendly communication style to build trust with potential guests. Use the booking platform's calendar to keep track of reservations and avoid double bookings.
9. Arrange cleaning and maintenance: Develop a reliable system for cleaning and maintaining your rental property between guest stays. You can choose to handle these tasks yourself or hire a professional cleaning service. Ensure the property is thoroughly cleaned and restocked with essential amenities before each new guest arrives.
10. Comply with tax obligations: Register with the appropriate state and local tax authorities to obtain a sales tax certificate and any necessary occupancy tax permits. Collect the required taxes from your guests and remit them to the proper agencies on a regular basis. Keep accurate records of all income and expenses for tax purposes.

By following these steps and staying informed about local regulations, you can establish a successful short-term rental business in New York. Remember to prioritize guest satisfaction, maintain open communication, and stay adaptable in the face of changing market conditions and regulatory landscapes.

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

For inquiries about short-term rental regulations and zoning in New York City, the primary point of contact is the Mayor's Office of Special Enforcement (OSE). The OSE is responsible for overseeing and enforcing the city's laws related to short-term rentals.

You can reach out to the OSE through the following channels:

1. Phone: (646) 576-3533 (for general inquiries related to OSE matters)
2. Email: registration@ose.nyc.gov (for questions specifically about short-term rental registration)
3. Address: 22 Reade Street, 4th Floor, New York, NY 10007

If you suspect an illegal short-term rental operation in your neighborhood, you can file a complaint by calling 311 or submitting an online complaint through the NYC 311 website.

For hosts looking to connect with others and stay informed about short-term rental regulations in New York City, there are several online communities and resources available:

1. Airbnb NYC Hosts Forum: This Facebook group is a platform for Airbnb hosts in New York City to share experiences, ask questions, and discuss local regulations.
2. NYC Airbnb Hosts Coalition: This advocacy group represents the interests of short-term rental hosts in New York City, providing resources and updates on regulatory developments.
3. Short Term Rental Advocacy Center: This website offers a wealth of information on short-term rental laws across the United States, including New York City. It also provides a forum for hosts to connect and share insights.

By engaging with these communities and staying in touch with the OSE, short-term rental hosts in New York City can navigate the complex regulatory landscape and ensure compliance with local laws. It's essential to stay proactive and informed to avoid potential fines and legal issues while running a successful short-term rental business in the city.

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

New York's short-term rental regulations have been a hot topic of discussion among Airbnb hosts on various online forums. Many hosts have shared their experiences, concerns, and opinions about the strict rules, particularly in New York City. Here are some notable examples:

Reddit - r/AirBnB: In a thread titled "New York City's new short-term rental registration law," hosts discuss the challenges of complying with Local Law 18. One host commented, "I've been trying to register my apartment for weeks, but the process is so confusing and time-consuming. I'm worried I might have to stop hosting altogether."

Bigger Pockets Forum: A host started a thread called "Navigating NYC's Airbnb Regulations" to seek advice from fellow investors. They wrote, "I bought a property in Manhattan with the intention of using it for short-term rentals, but I'm realizing that the laws make it nearly impossible. Has anyone found a legal workaround?"

Airbnb Community Center: In a post titled "NYC Host Registration Experience," a host shared their story of registering with the city: "It took me several attempts to gather all the required documents and information. The process is not designed for the average host. I had to hire a lawyer to help me navigate the system."

The general sentiment among hosts in New York, particularly in New York City, is one of frustration and confusion. Many feel that the regulations are overly burdensome and make it nearly impossible to operate a short-term rental business legally. Some hosts have chosen to stop hosting altogether, while others are seeking legal advice to find ways to comply with the rules.

However, there are also hosts who support the regulations, arguing that they help preserve housing stock for long-term residents and prevent the negative impacts of unregulated short-term rentals on local communities.

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.