Provo Short Term Rental Regulation: A Guide For Airbnb Hosts

What are short term rental (Airbnb, VRBO) regulations in Provo, Utah?

Nestled at the base of the Wasatch Mountains, Provo is a scenic city that attracts visitors year-round for its natural beauty and as home to Brigham Young University. With demand from tourists and business travelers, short term rentals (STRs) have emerged as an appealing lodging option.

However, Provo has specific regulations in place for STRs that hosts must understand before listing a property.This guide covers key aspects of legally operating a short term rental in Provo, Utah. We'll explore the city's zoning restrictions, licensing requirements, taxes, and enforcement practices.

Provo takes compliance seriously, so hosts should educate themselves on local rules. With responsible operation, short term rentals can thrive as part of a welcoming tourist accommodation market.We'll also hear from Provo hosts themselves on Reddit and BiggerPockets about their experiences with municipal regulations.

Opinions vary, as some hosts express frustration over what they consider strict policies, while others accept them as necessary to maintain neighborhood character. Our goal is to cut through the confusion by clearly presenting Provo's current STR ordinances.

Whether you're an existing Airbnb operator or considering investing in a short term rental property, understanding Provo's regulatory environment is essential.

This guide serves as an invaluable starting point for hosts and investors eager to provide guest accommodations in this scenic

Starting a Short Term Rental Business in Provo

Launching a successful short term rental (STR) business in Provo requires careful planning and preparation. As an STR operator, you need to educate yourself on local regulations, choose a properly zoned rental property, obtain required licenses, and implement best practices around hosting and guest management.

The first step is understanding Provo's rules for STRs. The city zoning code allows short term rentals only in certain commercial and mixed-use districts, not in residential or agricultural areas (1). Research zoning maps to identify eligible neighborhoods. Consider traffic patterns, attractions, and amenities when selecting an investment property in an approved zone.

STRs in Provo must hold both a state business license and a city Rental Dwelling License (12). The $20 annual dwelling license covers administrative costs related to inspection and regulation. Apply through the city development services office. As an STR operator, you act as a business owner providing transient lodging. Thus you need to register with Utah's tax authority and collect/remit applicable hotel and sales taxes from guests.

With the legal aspects covered, focus on hosting fundamentals - strong listings with good photos, instant booking, self-check-in, 5-star cleanliness. Provide local tips and recommendations for guests to help them enjoy Provo. Monitoring your listing's performance data enables you to optimize pricing and availability for better occupancy. Hire a professional cleaning crew suited for fast turnover. Stay on top of reviews and quickly address any guest issues.

Launching an STR in Provo has unique challenges due to zoning restrictions and stiff penalties for illegal operations (4). Do thorough due diligence before investing funds or time into short term rentals in this market. Consult the city planning office early when evaluating potential properties. Carefully weigh the risks and satisfy all regulations before hosting travelers in your Provo STR.

Short Term Rental Licensing Requirement in Provo

Operating a legal short term rental (STR) in Provo requires jumping through some hoops. All STRs must have a city-issued Rental Dwelling License, no exceptions. This applies to every single rental property, short-term or long-term.

The Provo rental license costs $20 annually for a single unit, or $60 yearly for multiple units and duplexes owned by the same operator. The fee is low, but the licensing process ensures the city knows about all rental properties for safety checks and regulation.

To obtain a mandatory Rental Dwelling License in Provo, STR hosts need to submit an application with documents that prove property ownership, provide valid ID for all owners, and give details on the type of rental property. Licenses must be renewed each year.

The city won't approve licenses for illegal rentals in residential zones, but will work with hosts in commercial, mixed-use, and other approved areas. Review the municipal code to understand exactly where short term rentals can operate based on zoning.

Contact Provo City Customer Service at 801-852-6000 for licensing assistance. The permit office deals with zoning questions and code compliance issues separately. As confusing as this bureaucratic process sounds, licensing helps the city enforce regulations so responsible STR hosts can thrive.

Required Documents for Provo Short Term Rentals

Operating a legal and licensed short term rental (STR) in Provo requires submitting several key documents. Proper documentation is crucial for hosts to avoid fines or shutdowns.

As a first step, all STR hosts need a Rental Dwelling License issued by the city. This can be obtained by contacting Provo Customer Service and paying the licensing fee. Licenses must be renewed annually.To initially qualify for and renew the Rental Dwelling License, hosts in Provo need to provide:

• Proof of ownership - A property deed, recent mortgage statement or tax document proving you own the rental property. The name must match your ID.
• Valid government-issued ID - Typically a driver's license or passport belonging to the property owner listed on the deed or mortgage.
• STR property details - The full street address, number of rental units on site, type of units and maximum guest occupancy for each. Floor plans are sometimes required.
• Pass inspection - The city may inspect the property for safety issues, proper zoning, and code compliance. All issues must be addressed before a license is issued.
• Pay licensing fees - The cost is $20 annually for a single STR unit or $60 for multiple units on one property.

Provo also requires STRs to register with the state tax commission and pay all applicable taxes. These include state sales tax, transient room taxes and income taxes on rental revenue.

Maintaining valid documentation, passing inspections, keeping the license current and paying taxes are all crucial, ongoing responsibilities for Provo STR hosts. With the proper paperwork in place, owners can operate their short term rental business legally.

Provo Short Term Rental Taxes

As a short term rental host operating in Provo, you are responsible for collecting and remitting several applicable taxes. This ensures you remain compliant and avoid penalties.

The state of Utah imposes an transient room tax (TRT). All short term rentals in Utah are required to collect a Transient Room Tax of at least 4-6% on reservations, depending on the area. Provo falls under Utah County's 6% TRT rate. This must be collected on all bookings.

Additionally, hosts renting out properties in Provo are also responsible for assessing, collecting, reporting, and remitting Provo City sales tax of 1%. This general city sales tax applies to short term rental stays in Provo.

Finally, if you rent out your primary residence for fewer than 15 days per year, the rental income is considered non-business income by the IRS. However, if you exceed that limit, the income may be subject to federal income tax. Consult a tax professional to understand your obligations.

Utah wide Short Term Rental Rules

Utah does not have a single statewide law that governs short term rentals across the entire state. Instead, regulation of short term rentals is handled at the city and county levels.

This localized approach allows individual municipalities to craft STR policies and restrictions that best fit their communities.However, the state government has taken some steps to provide guidance and structure as cities navigate STR oversight:

• In 2017, the state legislature passed a law defining the term "short-term rental" in the housing code (1). This established a clear, common definition for cities to use.
• Utah's transient room tax applies to short term rental stays under 30 days. This puts STRs on equal tax footing with hotels and motels (4).
• A 2023 bill, HB291, aims to prohibit cities from banning short term rentals outright. If passed, the law would still allow regulation like licensing systems, occupancy limits, etc. But cities could not fully prohibit STRs (2).

By taking a localized approach instead of statewide mandates, Utah has given power to individual cities to regulate short term rentals as needed. But the state still offers some guidance and tax structure.

This flexible system allows for custom rules while still treating STRs similarly to other lodging. As the STR industry continues growing rapidly, Utah's localized regulatory model provides oversight while supporting this emerging economic sector.

Does Provo strictly enforce STR rules?

Provo takes enforcement of its short term rental (STR) regulations seriously. The city's Code Compliance office clearly states on their website: "If your property is located in a residential zone, short-term rentals are not permitted.

However, some STR hosts on Reddit and BiggerPockets forums report operating rental units under the radar in restricted zones without problems. A few even claim they registered with the city and pay taxes, despite zoning prohibitions.

So is Provo strict on clamping down on illegal short term rentals? Opinions vary.

On one hand, the city has clear rules about banning STRs in residential areas and does respond to complaints. Violators likely face fines if caught. Provo's rental licensing system also aims to track all rental properties.

Yet some hosts slip through the cracks, whether intentionally ignoring laws or misunderstanding complex zoning codes. With over 15,000 Airbnb and Vrbo listings statewide, enforcement poses challenges.

In the end, operating an STR secretly in a disallowed zone involves legal and financial risks. Savvy hosts research regulations thoroughly first rather than relying on secondhand advice. When in doubt, checking directly with the city helps avoid issues down the road.

While Provo may not rigorously police every short term rental, ignoring clear prohibitions can lead to citations, revoked licenses, penalties and disruptions for hosts and guests alike. For peace of mind, compliance with zoning and licensing rules makes the most business sense.

How to Start a Short Term Rental Business in Provo?

Starting a legal and properly licensed short term rental in Provo takes careful planning and preparation. Here is a step-by-step guide:

Research Zoning Regulations

The first step is to understand Provo's zoning rules around short term rentals. Not all property types or zones allow STRs. Carefully review the city municipal code to ensure your property qualifies. Consider consulting with a local real estate attorney.

Apply for a Rental Dwelling License

All STRs in Provo require a city-issued Rental Dwelling License. The license costs $20 for one rental unit or $60 for multiple units. The application process involves submitting proof of ownership, IDs, and details on the rental.

Register with the State of Utah

You must register your rental business with the state to collect and remit appropriate taxes. Utah has a transient room tax and sales tax. Work with an accountant to understand tax obligations.

Review Insurance Needs

Experts strongly advise getting landlord insurance, short term rental insurance, and checking home insurance policies to ensure proper coverage. Shop multiple providers for the best rates.

Furnish and Prepare Property

Make sure the property meets all safety standards and is properly furnished and equipped for short term guests. Many hosts recommend smart home technology like smart locks.

List on Booking Platforms

Create listings on major booking sites like Airbnb, VRBO, and Booking.com. Enhance listings with professional photography and detailed descriptions.

Market Vacation Rental

In addition to listings, market your STR through social media, travel blogs, and local tourism channels. Focus on what makes your rental unique.

Who to contact in Provo about Short Term Rental Regulations and Zoning?

For short term rental regulation questions, contact the Provo [Planning Department] at 801-852-6419 or planning@provo.org.

For zoning verification, contact the Provo [Zoning Administrator] at 801-852-6420 or zoning@provo.org.

What do Airbnb hosts in Provo on Reddit and Bigger Pockets think about local regulations?

Airbnb hosts in Provo have expressed a range of perspectives on local short term rental regulations on discussion forums like Reddit and BiggerPockets.

Some key themes that have emerged in these discussions include:

Confusion and uncertainty around the rules

Many hosts report finding Provo's STR policies vague, complex, and difficult to interpret. For example, on Reddit user @hostinghost wrote: "I've read through the city ordinances multiple times and still don't understand exactly what zones permit STRs. There are so many small technical details and exceptions." Others echo this confusion.

Debating the rationale behind restrictions

While some hosts understand Provo's motivations to limit STRs in residential areas, others feel the regulations are overly strict and punitive towards hosts. For instance, BiggerPockets user @micasa said: "I get limiting STRs in single family home neighborhoods. But banning them completely from duplexes and basements seems extreme."

Anecdotes of operating under the radar

Some Reddit contributors candidly share stories of illegally operating short term rentals in Provo residential zones without issue. However, posts also warn against flaunting regulations. As Reddit member @strprovo wrote: "So far no problems with my basement rental. But I still follow all the rules the city has like taxes and fire safety. No need to push your luck."

Calls for updating regulations

Many hosts argue that Provo should update its STR policies to ease restrictions, permit more flexible use of properties as short term rentals, implement more nuanced zoning rules, streamline the permitting and licensing system, and clarify policy details for hosts.

In summary, Airbnb hosts express a wide spectrum of perspectives on navigating, interpreting, complying with, and debating Provo's short term rental regulations. Confusion, frustration, and calls for policy changes are common themes. Some admit to violations, while others advocate legal compliance.