Mystic, Connecticut Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Mystic, Connecticut?

Mystic, a popular tourist destination in southeastern Connecticut, has been grappling with how to regulate the growing short-term rental market in recent years. The town falls within two municipalities - Groton and Stonington - each with its own approach to short-term rental regulations. Here's an overview of the current landscape for short-term rentals in Mystic.

Starting a Short-Term Rental Business in Mystic

Starting a short-term rental business in Mystic requires navigating the regulations of either Groton or Stonington, depending on which side of the Mystic River your property is located.

In Groton, there is currently no specific legislation regulating short-term rentals. However, the town is actively considering ways to regulate these properties through either a change to zoning regulations or the development of a new town ordinance. The town has engaged the Horsley Witten Group to seek solutions that balance the needs of all community members. Residents can provide feedback and stay updated on the process through the Greater Groton project page.

On the Stonington side, the town's zoning code does not currently regulate short-term rentals, as decided by the Planning and Zoning Commission in 2017. However, Stonington has been working on a resident-driven process to develop a Municipal Ordinance for short-term rentals. The proposed ordinance, set for a Town Meeting vote on February 27, 2023, would require short-term rental operators to register their properties with the town. This registration process aims to maintain a responsible party should the rental become a public safety or nuisance issue.

Despite the lack of specific regulations, some Mystic short-term rental operators have faced challenges from neighbors filing violation notices based on the interpretation that current zoning laws do not permit "transient rentals." This highlights the need for clear and consistent regulations to provide certainty for both operators and residents.

Prospective short-term rental hosts in Mystic should carefully review the current regulations and any proposed changes in their specific municipality. Engaging with local officials, attending community forums, and staying informed on the evolving regulatory landscape will be key to successfully starting and operating a short-term rental business in the area.

Short-Term Rental Licensing Requirements in Mystic

The licensing requirements for short-term rentals in Mystic depend on which town the property is located in, as Mystic spans both Groton and Stonington.

In Groton, the town recently approved short-term rental regulations in April 2024. According to the official town website, the licensing requirements include:

• Providing an off-street parking space for every bedroom in the rental unit
• Showing that the rentals will not negatively impact the residential character of the neighborhood
• Designating a local contact person, who can be a property manager or co-host if the owner is not available, who can respond to any issues within 60 minutes
• Obtaining a zoning permit from the town's Planning and Development Services department

To apply for a zoning permit, short-term rental owners in Groton must submit an application to:

Planning and Development Services
134 Groton Long Point Road
Groton, CT 06340

The application fee is $50, and the process typically takes 2-4 weeks. Operating a short-term rental without a valid permit in Groton can result in fines of $150 per day.

In Stonington, voters rejected a proposed ordinance to regulate short-term rentals in March 2023. As a result, there are currently no specific licensing requirements for short-term rentals on the Stonington side of Mystic.

However, the failed ordinance would have required short-term rental owners to register annually with the town and pay a $100 registration fee. It also would have imposed a $250 fine for the first failure to register, with additional penalties for continued non-compliance.

While the ordinance did not pass, it provides insight into the types of regulations Stonington has considered for short-term rentals. The town may revisit the issue after the fall 2023 election.

For the most current information on short-term rental licensing requirements, contact the Planning and Development Services department in Groton or the Town of Stonington directly.

Required Documents for Mystic Short-Term Rentals

The documents required to register a short-term rental in Mystic vary depending on whether the property is located in Groton or Stonington.

In Groton, based on the recently approved zoning regulations effective May 15, 2024, short-term rental owners must submit the following when applying for a zoning permit:

1. Completed Zoning Permit Application: This form, available from the Planning and Development Services department, collects basic information about the property owner and the rental unit.
2. Site Plan: A detailed site plan showing the rental unit's location, parking spaces, and any outdoor amenities. The plan helps ensure compliance with parking and other zoning requirements.
3. Floor Plan: A floor plan of the short-term rental unit, including room dimensions and locations of safety features like smoke detectors. This is used to determine the unit's maximum occupancy.
4. Proof of Residency: Documentation showing the rental is the owner's primary residence, such as a driver's license or utility bill. This is required under Groton's new regulations limiting short-term rentals to primary residences.

In Stonington, while voters rejected a proposed ordinance in March 2023, the draft provides insight into potential future requirements. The failed ordinance would have required short-term rental owners to submit:

1. Annual Registration Form: Including the owner's name, rental address, contact information for the owner or agent, and proof of residency or ownership.
2. Parking Plan: Showing the number and location of available off-street parking spaces for renters.
3. Floor Plan: Identifying the number of bedrooms and locations of fire extinguishers and smoke/carbon monoxide detectors.
4. Proof of Insurance: Demonstrating the owner has appropriate liability insurance coverage for the rental.

While not currently mandated, these documents provide a framework for what Stonington may require if short-term rental regulations are revisited in the future.

To obtain the most up-to-date list of required documents, contact the Planning and Development Services department in Groton or the Stonington Town Clerk's office.

Mystic Short-Term Rental Taxes

Short-term rental hosts in Mystic, Connecticut, are subject to several state and local taxes. Here's a breakdown of the applicable taxes and rates:

1. Connecticut Room Occupancy Tax: The state of Connecticut imposes a 15% room occupancy tax on the total payment received for occupancy of a room or rooms in a hotel, motel, lodging house, or bed-and-breakfast establishment for 30 consecutive calendar days or less. This tax applies to short-term rentals of all or a portion of a home.
2. Connecticut Sales and Use Tax: Connecticut charges a 6.35% sales and use tax on most goods and services, including short-term rentals. However, this tax is typically included in the room occupancy tax rate and is not charged separately.
3. Local Occupancy Taxes: Currently, neither Groton nor Stonington, the two towns that make up Mystic, impose additional local occupancy taxes on short-term rentals. However, this could change as the towns consider new regulations for vacation rentals.

It's important to note that rental contracts for a period of less than 90 days, including month-to-month contracts, are considered short-term rentals subject to room occupancy tax for the first 30 days of occupancy. Beginning on the 31st consecutive day of occupancy by the same person, the tax no longer applies.

Tax Deductions and Write-Offs

Short-term rental hosts in Mystic may be able to deduct certain expenses related to their rental business on their federal and state income tax returns. Some common deductions include:

1. Mortgage interest and property taxes (for the portion of the property used for rental)
2. Utilities, such as electricity, gas, water, and internet
3. Cleaning and maintenance costs
4. Repairs and replacements
5. Supplies and amenities provided to guests
6. Insurance premiums
7. Advertising and platform fees
8. Depreciation of furniture and equipment

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

As the regulatory landscape for short-term rentals continues to evolve in Mystic and across Connecticut, it's crucial for hosts to stay informed about any changes to tax requirements and to collect and remit all applicable taxes to the proper authorities.

Connecticut Wide Short-Term Rental Rules

While there is currently no comprehensive statewide legislation regulating short-term rentals in Connecticut, hosts in Mystic must be aware of several state-level requirements and potential changes on the horizon.

One key statewide rule is the Connecticut Room Occupancy Tax. The state imposes a 15% tax on the total payment received for occupancy of a room or rooms in a hotel, motel, lodging house, or bed-and-breakfast establishment for 30 consecutive calendar days or less. This tax applies to short-term rentals of all or a portion of a home, and hosts are responsible for collecting it from guests and remitting it to the Department of Revenue Services.

However, the regulatory landscape for short-term rentals in Connecticut may soon be changing. State lawmakers are considering a new bill, Bill 335, which would grant municipalities the authority to regulate short-term rental allowances within their jurisdictions. If passed, this legislation could pave the way for local ordinances addressing concerns related to overcrowding, disruptive guests, parking issues, and the impact of short-term rentals on residential neighborhoods.

Under the proposed bill, municipalities could impose zoning restrictions, guest occupancy limits, parking requirements, and other measures on short-term rentals. The bill aims to provide structure for how short-term rentals can fit into residential neighborhoods and give communities more control over the growing vacation rental market.

While the bill would not require towns to take action, it would provide a framework for those looking to establish stricter regulations. Mystic hosts should closely monitor the progress of Bill 335 and be prepared to adapt to any resulting changes in local ordinances.

In the meantime, hosts in Mystic should review any existing local regulations, such as zoning laws, rental permits, and safety requirements, to ensure compliance. They should also stay informed of any updates to state-level legislation and tax obligations.

As the short-term rental market continues to evolve in Connecticut, hosts who remain vigilant and adaptable will be best positioned to navigate the changing regulatory landscape and provide a positive experience for their guests.

Does Mystic Strictly Enforce STR Rules?

Based on discussions in online forums like BiggerPockets and Reddit, it appears that Mystic and the surrounding towns have been relatively Airbnb-friendly compared to some other cities in Connecticut. However, the regulatory landscape is evolving, and enforcement may become stricter in the coming years.

Currently, the level of enforcement varies between the two towns that make up Mystic. Groton has not had specific short-term rental regulations, allowing many hosts to operate without major issues. However, with the recently approved zoning changes effective May 15, 2024, Groton will start requiring short-term rental owners to obtain a zoning permit and meet certain requirements. It remains to be seen how strictly these new rules will be enforced.

On the Stonington side, voters rejected a proposed ordinance to regulate short-term rentals in March 2023. As a result, there are currently no specific licensing requirements or enforcement mechanisms in place. However, some hosts have reported challenges with neighbors filing zoning violation notices, arguing that short-term rentals are not permitted under current laws. This suggests that even without formal regulations, hosts may face pushback in some neighborhoods.

Compared to cities with more established short-term rental regulations, like New York or San Francisco, Mystic has been more lenient. Many hosts have been able to operate successfully, particularly in tourist-friendly areas like downtown Mystic or near the beaches. The lack of strict enforcement has allowed the short-term rental market to grow in recent years.

However, as concerns about housing affordability and the impact of short-term rentals on residential neighborhoods grow, both Groton and Stonington are likely to face pressure to increase regulation and enforcement. The proposed statewide legislation, Bill 335, could also empower local municipalities to impose stricter rules on short-term rentals.

In conclusion, while Mystic has been relatively Airbnb-friendly compared to some other cities, the regulatory landscape is shifting. Hosts should be prepared for potential changes in local ordinances and increased enforcement in the coming years. Staying informed, engaged with local officials, and compliant with any new regulations will be key to operating a successful short-term rental business in Mystic.

How to Start a Short-Term Rental Business in Mystic

Starting a short-term rental business in Mystic requires careful planning and compliance with local regulations. Here's a step-by-step guide to help you get started:

1. Research Local Regulations: Familiarize yourself with the short-term rental regulations in Groton and Stonington, the two towns that make up Mystic. As of 2023, Stonington does not have specific regulations for short-term rentals, while Groton is in the process of developing new rules through either a zoning change or a town ordinance. Stay informed about any updates to local laws that may impact your business.

Tip: Attend community meetings, engage with local officials, and join local host groups to stay up-to-date on regulatory changes and connect with other short-term rental operators in the area.

2. Determine Your Property's Eligibility: Ensure your property is located in an area that allows short-term rentals. In Groton, check with the Planning and Development Services department to confirm your property's zoning and any specific requirements. In Stonington, review your property's deed restrictions and any applicable homeowners association rules.

Tip: If you're considering purchasing a property for short-term rental use, work with a local real estate agent who understands the regulations and can help you find a suitable property.

3. Prepare Your Property: Make any necessary repairs, upgrades, and improvements to ensure your rental is safe, comfortable, and attractive to guests. Consider the amenities and features that will make your property stand out, such as high-speed internet, a well-equipped kitchen, or outdoor living spaces.

Tip: Invest in high-quality furnishings, linens, and decor to create a welcoming and memorable experience for your guests. Hire a professional photographer to showcase your property's best features in your online listing.

4. Obtain Necessary Permits and Licenses: While Stonington does not currently require a specific permit for short-term rentals, Groton may implement a registration or licensing process as part of its new regulations. Monitor any changes and comply with all local requirements.

Tip: Even if not required, consider obtaining a general business license and liability insurance to protect your investment and demonstrate your commitment to operating responsibly.

5. Create a Business Plan: Develop a comprehensive business plan that outlines your target market, pricing strategy, marketing approach, and financial projections. Consider your competition, unique selling points, and potential challenges.

Tip: Seek guidance from local business resources, such as the Greater Mystic Chamber of Commerce or SCORE, to refine your business plan and access valuable mentorship and support.

6. List Your Property: Choose a vacation rental platform, such as Airbnb or Vrbo, to list your property. Craft a compelling description, showcase your property's unique features, and set competitive rates based on local market conditions and your target audience.

Tip: Optimize your listing with high-quality photos, detailed amenity information, and a clear cancellation policy. Respond promptly to inquiries and maintain a high level of communication with potential guests.

7. Manage Your Bookings: Establish a system for managing reservations, guest communication, and check-in/check-out procedures. Consider using a vacation rental management software or partnering with a local property management company to streamline operations and provide 24/7 guest support.

Tip: Develop a comprehensive guest guidebook with information about your property, house rules, and local attractions and recommendations to enhance the guest experience and encourage positive reviews.

8. Be a Responsible Host: Foster positive relationships with neighbors and the community by following local regulations, minimizing disturbances, and being responsive to any concerns. Participate in local events and initiatives to demonstrate your commitment to being a good neighbor.

Tip: Establish clear house rules, set appropriate occupancy limits, and enforce quiet hours to maintain a peaceful environment for both guests and neighbors.

Starting a short-term rental business in Mystic requires navigating an evolving regulatory landscape and being proactive in engaging with the community. By staying informed, preparing your property, and prioritizing responsible hosting practices, you can build a successful and sustainable vacation rental business in this charming coastal town.

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

If you have questions about short-term rental regulations and zoning in Mystic, here are the key contacts and resources:

Town of Groton Planning and Development Services
134 Groton Long Point Road
Groton, CT 06340
Phone: (860) 446-5970
Email: planning@groton-ct.gov
Website: https://www.groton-ct.gov/departments/plandev/

Contact the Planning and Development Services department for information on Groton's recently approved zoning regulations for short-term rentals, effective May 15, 2024. They can provide guidance on the permitting process, site plan requirements, and any other zoning-related questions.

Town of Stonington Planning Department
152 Elm Street
Stonington, CT 06378
Phone: (860) 535-5095
Email: kdowling@stonington-ct.gov
Website: https://www.stonington-ct.gov/planning-department

While Stonington voters rejected a proposed short-term rental ordinance in March 2023, the Planning Department can provide the most current information on any future regulatory efforts and how they may impact short-term rental operators.

Greater Mystic Chamber of Commerce
62 Greenmanville Ave
Mystic, CT 06355
Phone: (860) 572-9578
Email: info@mysticchamber.org
Website: https://www.mysticchamber.org/

The Greater Mystic Chamber of Commerce can be a valuable resource for connecting with other short-term rental operators, staying informed about local business regulations, and promoting your rental to potential guests.

Online Communities

1. Mystic CT Short-Term Rental Owners Facebook Group - A private group for short-term rental owners in Mystic to share information, ask questions, and support one another.
2. r/Mystic - The Mystic subreddit, where local news, events, and issues are discussed, including short-term rental regulations.
3. BiggerPockets Forum- A forum for real estate investors in Connecticut, with occasional discussions on short-term rentals and local regulations.

Engaging with online communities can provide insights from other hosts navigating the regulatory landscape in Mystic and help you stay connected to the local short-term rental community.

By reaching out to the appropriate municipal departments and participating in local business and online communities, short-term rental hosts in Mystic can stay informed about the evolving regulations and access valuable resources to support their businesses.

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

Airbnb hosts in Mystic have been discussing the impact of local regulations on online forums like Reddit and BiggerPockets. Here are some insights from local hosts:

Reddit - r/Connecticut: In a thread about Connecticut's appeal as a vacation destination, one commenter noted that "Mystic has always been something of a CT 'destination' for vacations for out-of-state folks. They get the aquarium, the seaport, and of course, Mystic Pizza, which somehow still draws people in." This suggests that despite any regulatory challenges, Mystic remains a popular tourist spot.

BiggerPockets Forum: In a post titled "Looking for a Property Management Company in Southeastern CT," a user mentioned that when New York City banned short-term rentals under 30 days in September 2023, 15,000 landlords suddenly found themselves without income. While not specific to Mystic, this highlights the potential impact of strict regulations on short-term rental hosts.

Reddit - r/Connecticut: In a thread about ideas for a 21st birthday celebration, one user suggested "renting a mansion from Airbnb cuz they're surprisingly really cheap" and "work your way toward Mystic." This indicates that despite any regulations, there are still appealing short-term rental options available in the Mystic area.

BiggerPockets Forum: In a discussion about a potential investment property in New London, near Mystic, a user shared their experience doing a quick drive-by of some multifamily homes. While not directly related to short-term rentals, it shows investor interest in the surrounding area.

While there are limited discussions specifically about Mystic's short-term rental regulations on these forums, the general sentiment seems to be that Mystic remains an attractive destination for both tourists and investors. Hosts appear to be navigating any regulatory challenges to continue operating short-term rentals in the area.

However, the broader conversations about the impact of strict regulations in other cities serve as a reminder for Mystic hosts to stay informed and engaged with local policymakers to ensure a balanced approach that supports both the tourism economy and long-term housing needs.

Disclaimer: While we here at BNBCalc strive to keep all of our city 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 city 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.