Naperville Short Term Rental Regulation: A Guide For Airbnb Hosts

What are short term rental (Airbnb, VRBO) regulations in Naperville, Illinois?

The City of Naperville banned short-term rentals in August 2020 through Ordinance No. 20-087.

This makes it illegal to operate or advertise short-term rentals for stays less than 31 days within city limits. Fines can be up to $1,000 per day.There is a limited exception for pre-existing bookings made before August 19, 2020 that occur before October 19, 2020.

After that date, all short-term rentals in Naperville are prohibited.Listings on sites like Airbnb and VRBO must clearly state Naperville's 31-day minimum stay requirement. However, a 2021 Naperville Sun check found some questionable listings remaining. It appears enforcement is still limited1.

Starting a Short Term Rental Business in Naperville

In August 2020, the Naperville City Council passed an ordinance, No. 20-087, banning short-term rentals within the city, which went into effect on September 1, 202013. This means that it is currently unlawful to operate, use, offer for rent, or advertise any property for short-term residential rental within the corporate limits of the City of Naperville13.

The ordinance provides for fines of $1,000 per day for violations, increasing to $2,500 per day for subsequent offenses within 12 months3. As a result, individuals are prohibited from renting out their properties for less than 31 days, including through platforms like Airbnb and VRBO1.Despite the ban, there have been a few instances where properties were listed on these platforms. However, the city staff has taken steps to ensure compliance, including notifying short-term rental platforms of the ban and encouraging their cooperation in not allowing prohibited listings1.

The city has also received a limited number of complaints, and in each case, the property owner was found to be in compliance or made adjustments to comply with the city's regulations1.In light of these regulations, individuals interested in starting a short-term rental business in Naperville should be aware of the existing ban and the associated fines for non-compliance. It is important to stay updated on any changes in the city's regulations and to consult a local lawyer or tax professional for guidance.

Additionally, individuals may consider targeting the market for longer-term rentals, as some property managers have pivoted their business to accommodate individuals in need of housing for several months1.

Short Term Rental Licensing Requirement in Naperville

The Naperville City Council passed Ordinance No. 20-087, banning short-term rentals in the City of Naperville at the August 18, 2020, City Council meeting1. This ordinance went into effect on September 1, 20202. As of now, it is unlawful to operate, use, offer for rent, advertise for rent, or use any property within the corporate limits of the City of Naperville as a short-term residential rental2.However, there is a limited exception for pre-existing short-term rentals. If it can be demonstrated to the satisfaction of the City Attorney that a short-term rental agreement was signed before August 19, 2020, the City ordinance permits the short-term rental to occur1.

The ordinance provides for fines of $1,000 per day for violations of the Ordinance, increasing to $2,500 per day for subsequent offenses within a 12-month period1. It is essential to consult a local lawyer or tax professional to ensure compliance with the city's regulations2.

In summary, the Naperville City Council has banned short-term rentals in the city, with a limited exception for pre-existing agreements signed before August 19, 2020. Violations of the ordinance can result in fines, and it is crucial to consult a local lawyer or tax professional for guidance on compliance.

Required Documents for Naperville Short Term Rentals

Starting a short-term rental business in Naperville, Illinois, involves several steps and requirements. While there is no specific rental license or occupancy permit requirement in Naperville1, it is essential to ensure compliance with the city's regulations. Here are the key documents and steps to consider:

• Property Inspection: Ensure your property meets the city's safety and health standards. This may include inspections for fire safety, electrical safety, and other potential hazards.
• Business License: Obtain a business license from the City of Naperville. This will help you operate legally and ensure compliance with local regulations.
• Tax Registration: Register your short-term rental business with the Illinois Department of Revenue. This will help you understand and comply with the state's tax requirements for short-term rentals.
• Insurance: Obtain the necessary insurance coverage for your short-term rental property. This may include liability insurance, property insurance, and other types of coverage as required by the city and state.
• Advertising Compliance: Ensure your advertising complies with the city's regulations. This may include providing accurate information about the property, its amenities, and any restrictions or rules for guests.
• Guest Screening: Implement a guest screening process to ensure the safety and comfort of your guests. This may include background checks, verification of identity, and other measures to protect your property and your guests.
• Property Management Plan: Develop a plan for managing your short-term rental property, including cleaning, maintenance, and guest communication. This will help you maintain a high level of service and ensure a positive guest experience.

By following these steps and obtaining the necessary documents, you can ensure compliance with Naperville's short-term rental regulations and operate your business legally and safely.

Naperville Short Term Rental Taxes

Naperville, Illinois has strict regulations on short-term rentals, including a ban on operating, using, offering for rent, advertising for rent, or using any property within the corporate limits of the city as a short-term residential rental1. The Naperville City Council passed Ordinance No. 20-087, which went into effect on September 1, 2020, and provides fines of $1,000 per day for violations of the ordinance, increasing to $2,500 per day for subsequent offenses within 12 months1.

While there is no specific information available on short-term rental taxes in Naperville, the city has expanded its hotel/motel use tax to 5.5 percent from 4.4 percent, and for the first time, applied this tax to short-term rental services, such as Airbnb2. The Illinois Hotel & Lodging Association has also lobbied Bloomington-Normal officials for stricter regulations, and Champaign officials are exploring options for "licensing, regulating, and possibly taxing short-term residential units"2.

Illinois wide Short Term Rental Rules

Illinois has state-wide regulations for short-term rentals, which may apply to Naperville as well. Some key points to consider include:

• Illinois Short-Term Rental Act: This act creates the Short-Term Rental Act, which provides that units of local government may not enact or enforce an ordinance, regulation, or plan that has the express or implied purpose of prohibiting or restricting short-term rentals3.
• Taxes: Illinois imposes a tax on persons engaged in the business of short-term rental at the rate of 5% of 94% of the gross rental receipts from such renting, leasing, or licensing2.
• Hotel and Motel Use Tax: This tax applies to short-term rentals, inns, motels, tourist homes, or courts5. The owner of every hotel or motel is responsible for collecting and remitting this tax5.

It is essential to stay updated on any changes in the state's regulations and consult a local lawyer or tax professional for guidance.

Does Naperville strictly enforce STR rules?

Naperville, Illinois has strict regulations on short-term rentals, such as those offered on platforms like Airbnb and VRBO. The Naperville City Council passed an ordinance banning short-term rentals in the city at the August 18, 2020, City Council meeting13. The ordinance, No. 20-087, provides for fines of $1,000 per day for violations of the ordinance, increasing to $2,500 per day for subsequent offenses within a 12-month period13.

It is unlawful to operate, use, offer for rent, advertise for rent, or use any property within the corporate limits of the City of Naperville as a short-term residential rental13. The city has received three complaints of suspected scofflaws, but in each case, it was found that the property owner was either in compliance or made adjustments to comply with the city's regulations4. City staff has also notified short-term rental platforms, including Airbnb and VRBO, of the ban and encouraged their cooperation in not allowing prohibited listings4.

It is safe to say that Naperville strictly enforces STR rules and is not Airbnb-friendly compared to other cities. It is essential to consult a local lawyer or tax professional to ensure compliance with the city's regulations1.

How to Start a Short Term Rental Business in Naperville?

If you're looking to start a short-term rental business in Naperville, you should know that it is currently unlawful to operate, use, offer for rent, advertise for rent, or use any property within the corporate limits of the City of Naperville as a short-term residential rental1. The Naperville City Council passed Ordinance No. 20-087, which bans short-term rentals in the city2. This ordinance went into effect on September 1, 20201.

Therefore, it is not possible to start a short-term rental business in Naperville at this time.It is essential to consult a local lawyer or tax professional to ensure compliance with the city's regulations1. You can also contact the City of Naperville at (630) 420-6060 or visit their website at www.naperville.il.us for information on short-term rental regulations and zoning in Naperville5.If you're interested in renting out your property in Naperville, you should know that fines for renting your place short term can result in fines as high as $1,000 per day and upwards of3. It is essential to do your due diligence and consult a local lawyer or tax professional.

Ordinances and zoning are subject to changes and should always be confirmed with the City of Naperville2.To determine your financial gain by renting out your property over selling, you can use a rental property calculator3. Keep in mind that there are five ways to make money in being a real estate investor3.

If you're considering lasing and managing your Naperville rental yourself, it may not be the best option if you value your time and want to limit your risk3. There are day-to-day obligations when renting your place in Naperville, and it's best to consult a professional property management company like Naperville Property Management, Naperville Homes for Rent5.

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

To inquire about short-term rental regulations or report suspected violations in Naperville:City of Naperville Transportation, Engineering, & Development (TED) Business Group
Phone: (630) 420-6100
Email: businesslicenses@naperville.il.us

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

Naperville has a temporary ban on short-term rentals, which has been in place since 20202. The city has received three complaints of suspected scofflaws, but in each case, it was found that the property owner was either in compliance or made adjustments to comply with the city's regulations3. City staff has also notified short-term rental platforms, including Airbnb and VRBO, of the ban and encouraged their cooperation in not allowing prohibited listings3.

While the city has a temporary ban on short-term rentals, it is essential to stay updated on any changes in the city's regulations and consult a local lawyer or tax professional for guidance1. As of now, it is not possible to start a short-term rental business in Naperville1. The city has a ban on short-term rentals, and it is unlawful to operate, use, offer for rent, advertise for rent, or use any property within the corporate limits of the City of Naperville as a short-term residential rental1.

However, some hosts in Naperville have found ways to pivot their businesses to target people who need several months of housing but don't want to commit to a long-term lease3. Dean Batogowski, who co-manages high-end properties listed on Airbnb, has been able to pivot his business to target this middle market3.In summary, while Naperville has a temporary ban on short-term rentals, some hosts have found ways to adapt their businesses to the current regulations.

It is crucial to stay updated on any changes in the city's regulations and consult a local lawyer or tax professional for guidance.