New Massachusetts Short-Term Rental Law
Massachusetts is in the final stages of considering new legislation taxing and regulating the short-term rental market. This matters to you even if you don’t broker rentals because as buyer’s agents, you should know and disclose these new regulations to buyers who are interested in purchasing a home with the idea that they will rent it during the summer or off-season months on a short-term basis. This impacts anyone in the Commonwealth offering their home or a portion of a residential dwelling through AirBNB, VRBO, Homeaway or personal agreements for less than 31 days.
Throughout the debate, we helped influence the legislation and were successful in several areas that protected the best interest of real estate agents. One example is where we successfully removed the requirement that real estate brokerages obtain $1 million in liability coverage for each stay they book. Instead, this insurance requirement is an owner’s responsibility. With the impact of online portals and this new sharing economy, we were not able to defeat the taxation of these units.
Please note, the legislation allows for LOCAL options to create limits, permits or inspections. This is where we all need to stay vigilant. We know that Lenox has a proposed bylaw change that would significantly change the rental market for 2nd home owners- please contact Sandy Carroll immediately if you learn of others. We would like to review all proposals, to make sure private property rights and homeowners are protected within the limits of the law and zoning regulations.
The following information should help you understand the proposed changes to the short-term rental market under these new proposed regulations.
| EFFECTIVE DATE | For stays starting January 1, 2019 that are booked November 1, 2018 or later. |
| REGISTRATION | All properties must register with the state. State registry will be online with only the address of the property displayed. There is no statewide inspection requirement. Governor Baker’s amendment proposes that the online registry not contain the property address. |
| DURATION OF STAY | For any stays of 31 days or less *Tenancy at will is exempted |
| APPLICABLE | A proposed amendment by Governor Baker would create an exemption from the law for properties listed for 14 days or less per calendar year. |
| TAX RATE |
Click here for a list of the existing local option rooms tax in each town in Massachusetts. Or look below for bekshire towns listed. |
| TAX COLLECTION | By law, the property owner is required to collect and remit the tax. However, the law requires intermediaries (which includes REALTORS® who post the property for rent online) who enter into a written agreement with the owner or operator to collect rent or facilitate the collection or payment of rent on behalf of the operator to collect and remit the taxes. The Department of Revenue will issue regulations to clarify how often taxes should be remitted to the Department. This also means that a Realtor who does not collect or facilitate the collection of rent on behalf of the owner or operator does not need to collect and remit the tax. |
| INSURANCE | Every operator that rents out their property must carry not less than $1 million of liability coverage for each stay unless the hosting platform provides equal or greater coverage. 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. A hosting platform shall provide notice to the operator of the insurance requirement, which we expect will be in the form a disclosure for real estate brokerages. |
| CITIES & TOWNS AUTHORITIES | A city or town MAY:
|
| DEFINITIONS | The Governor’s proposed amendment also changes the definition of “occupancy” to comply with convention center bond requirements
Hosting Platform: A service through a digital platform that allows the operator to do the following actions:
Operator: person operating a bed and breakfast establishment, hotel, lodging house, short-term rental or motel in the commonwealth including, but not limited to, the owner or proprietor of such premises, the lessee, sublessee, mortgagee in possession, licensee or any other person otherwise operating such bed and breakfast establishment, hotel, lodging house, short-term rental or motel. Intermediary: a person or entity, other than an operator, that facilitates the sale, use or possession of an occupancy and charges a room charge to the general public; provided, however, that the term “facilitates” shall include a person or entity that brokers, coordinates or in any other way arranges for the purchase, sale, use or possession occupancies by the general public; provided further, that the term “intermediary” shall include a hosting platform and operator’s agent. |
Local Options: Taxation |
||||||
|
Meals Local Option
|
Rooms Local Option
|
Retail Marijuana Sales
|
||||
|
Municipality
|
Local Tax Rate
|
Effective Date
|
Local Tax Rate
|
Effective Date
|
Local Tax Rate
|
Effective
Date
|
|
Adams
|
0.75%
|
10/1/2015
|
6.00%
|
10/1/2015
|
3.00%
|
10/1/2018
|
|
Cheshire
|
3.00%
|
10/1/2018
|
||||
|
Clarksburg
|
0.75%
|
7/1/2011
|
6.00%
|
10/1/2018
|
3.00%
|
10/1/2018
|
|
Dalton
|
0.75%
|
7/1/2010
|
6.00%
|
7/1/2010
|
||
|
Great Barrington
|
0.75%
|
7/1/2010
|
6.00%
|
7/1/2010
|
||
|
Hancock
|
4.00%
|
1/1/1990
|
||||
|
Lanesborough
|
0.75%
|
10/1/2011
|
6.00%
|
10/1/2010
|
||
|
Lee
|
0.75%
|
4/1/2010
|
6.00%
|
4/1/2010
|
3.00%
|
10/1/2018
|
|
Lenox
|
0.75%
|
7/1/2011
|
6.00%
|
4/1/2010
|
||
|
Marlborough
|
0.75%
|
4/1/2014
|
6.00%
|
1/1/2011
|
||
|
North Adams
|
0.75%
|
7/1/2010
|
6.00%
|
10/1/2009
|
3.00%
|
7/1/2018
|
|
Pittsfield
|
0.75%
|
1/1/2011
|
6.00%
|
1/1/2010
|
3.00%
|
7/1/2018
|
|
Richmond
|
4.00%
|
7/1/2002
|
||||
|
Williamstown
|
0.75%
|
7/1/2010
|
6.00%
|
7/1/2010
|
3.00%
|
7/1/2018
|