It is possible to make your home into an Airbnb in Massachusetts, but remember that the state does enforce an occupancy tax. What that means is that you need to go through special steps to register your property with the state and to pay the appropriate taxes for using the property as an Airbnb.
Airbnb and other short-term rental platforms do enforce these tax laws, because Governor Charlie Baker passed a law that makes short-term rental property owners pay hotel occupancy taxes. Depending on where you are, you may also have to pay community impact taxes.
How are Airbnb taxes withheld from your rental?
To make the process of paying these taxes simpler for property owners, taxes are charged to the customer. Then, the tax is sent in an electronic file for credit to your registration number. To get that registration number, you’ll need to register your account with MassTaxConnect.
Airbnb will file these taxes for you, but if you rent through another party, you may have to file them independently.
Why does Massachusetts set such significant registration requirements?
One of the main reasons for the registration requirements in Massachusetts is that there were landlords renting what should have been single-family or apartment buildings by the night rather than to those needing them for long-term stays and residency. Boston, as an example, took this route to try to bring more rentals back into the long-term market because of a housing crunch that was making it difficult for people to find housing in the city.
Registering your Airbnb properly is important
Before you rent out your property on Airbnb or another similar platform, you need to make sure you’ve followed all the necessary regulations. If you make an error when registering your property, you could find that your ability to rent out your property is rescinded or that you face heavy fines for your mistakes.
To make your own life easier, it’s a good idea to look closely into the regulations and to be sure that your property falls into the appropriate guidelines to rent it out as an Airbnb. If not, you may need to look into other options to rent out your property.