MA Homeowners Who Operate Short-Term Rentals Must Now Register, Tax & Insure their Properties

    Posted by MAIA on January 9, 2019

    On December 28, MAIA issued a Special Legislative Bulletin regarding revisions to the MA short-term rentals (“Airbnb”) bill, noting that the MA legislature had agreed to allow a tax exemption for properties rented less than two weeks per year. On December 31, Governor Baker signed the revised bill into law.

    MAIA has already had several inquiries about this change, and in this update we will attempt to summarize the key provisions that affect agents and homeowners, and answer some FAQs.

    Q. What does the law require from short-term rental owners?

    1. Referred to as “operators” in the law, homeowners who intend to operate short-term rentals must:
      • Register their property with the MA Department of Revenue;
      • Collect a 5.7% state lodging tax, along with any applicable city, town, or regional (Cape Cod) taxes; and
      • Maintain $1 million liability insurance to cover each short-term rental.

    Note: Although operators who rent for 14 days or less per year can apply for an exemption from the taxes, they are still required to register and insure the property.

    Q. What is the effective date of the law?

    1. Although the law doesn’t take effect until July 1, 2019, it applies to bookings being made NOW (since January 1, 2019) for stays on or after July 1, 2019.
    Q. Definition of “Tenants”?
    1. There has been some confusion regarding the following section of the law:

    “Such coverage shall defend and indemnify the operator and any tenants or owners in the building for bodily injury and property damage arising from the short-term rental.”

    Based on initial research, it appears that the word “tenants” here refers to the tenants or owners of other units in a condo/apartment building, not to the short-term renters, who are termed “occupants” in the law. 

    We continue to seek clarity on this issue and anticipate Division of Insurance guidance over time.

    Q. Where can I access the full law?

    1. HERE

    MAIA will continue to provide updates as the details are ironed out.

    For questions pertaining to any of the legislative matters discussed here, please contact MAIA President & CEO Nick Fyntrilakis at nfyntrilakis@massagent.com or 508-634-7352.

     

    Topics: The Massachusetts Agent

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