Portsmouth, Rhode Island Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Portsmouth

If you own residential property in Portsmouth, Rhode Island, and plan to rent it out for periods less than 31 consecutive days, you must register the property with the Portsmouth Town Clerk before any tenants occupy the premises. The registration fee is $130 per dwelling unit, which includes the inspection fee. Registration forms are valid from January 1 to December 31 of the same year, regardless of when you register.

Once registered, the property is subject to a home inspection by the Building Official and Fire Marshal. You are responsible for scheduling these inspections, and the property must pass before you can begin renting. Upon satisfactory inspection, the Building Official will issue a short-term rental permit stating the maximum occupancy for the unit, which is 2 persons per bedroom (individuals 12 years or older).

The number of bedrooms cannot exceed what is supported by the property's septic system design. Your completed registration remains on file with the Police and Fire Departments.

Since Portsmouth began regulating short-term rentals in 2018, the number of registered properties has grown from 25 to 137 as of 2024. Despite this growth, there have been minimal complaints, with only 5 known complaints in 2023.

However, some residents have expressed concerns about short-term rentals leading to loud house parties, increased traffic, and parking issues, especially in neighborhoods with narrow roads like Common Fence Point and Island Park. The Town Council is considering prohibiting short-term rentals in these areas.

Fines for violating the short-term rental ordinance can be steep, ranging from $100 per day for a first offense up to $500 per day for third and subsequent violations. Three or more violations within a 12-month period can result in revocation of the rental permit for one year.

Overall, Portsmouth's short-term rental regulations aim to balance the rights of property owners with the concerns of neighbors and the community. By registering your property and following the guidelines, you can operate a successful and compliant short-term rental business in Portsmouth.

Short-Term Rental Licensing Requirements in Portsmouth

To legally launch and operate a short-term rental in Portsmouth, RI, property owners must register their rental dwelling unit(s) with the Town Clerk before allowing any tenants to occupy the premises. Here are the key requirements and steps in the licensing process:

1. Complete the Short-Term Rental Registration Form, providing:

• Property address and Tax Assessor's plat/lot number
• Number of rental dwelling units
• Owner's name, permanent mailing address, and phone number
• Local representative's contact information (if applicable)
• Usual rental period (weekly, monthly, etc.)

2. Pay the $130 registration fee per dwelling unit, which includes the inspection fee. Registrations are valid from January 1 to December 31 of the same year, regardless of when you register.

3. Schedule and pass inspections by the Building Official and Fire Marshal. The Building Official will then issue your STR permit, specifying the maximum occupancy (2 persons per bedroom, age 12+). Note that the number of bedrooms cannot exceed what your property's septic system supports.

4. Provide guests with a summary of town ordinances on parking, noise, trash, pets, occupancy limits, and other relevant rules. The Town Clerk's office can provide this handout.

Failing to register your STR or violating the ordinance can result in significant fines:

1. $100 per day for a first offense
2. $250 per day for a second offense
3. $500 per day for third and subsequent offenses

Fines accrue daily for ongoing violations. Three or more violations within 12 months can lead to your rental permit being revoked for one year. Revocations can be appealed to the Zoning Board of Review.

To report issues with STRs, neighbors can call the 24/7 hotline at (401) 336-5552 or file a complaint online at https://safe.hostcompliance.com/portsmouth-ri/tips. Provide thorough documentation, including photos, videos, and sound recordings.

The licensing process typically takes 2-4 weeks, depending on how quickly you schedule the required inspections. With 137 registered STRs as of 2024, up from just 25 in 2018, Portsmouth is seeing strong growth in this sector while aiming to preserve neighborhood character and quality of life through these regulations.

Required Documents for Portsmouth Short-Term Rentals

To register your short-term rental property in Portsmouth, RI, you'll need to submit the following documents to the Town Clerk's office:

1. Short-Term Rental Registration Form: This form requires information such as the property's Tax Assessor's plat and lot number, rental unit address, number of rental units, owner's name and contact details, local representative's contact information, and usual rental period (weekly, monthly, etc.). The form is available online at the Portsmouth ViewPoint portal.
2. Proof of Insurance: At the time of application, you must provide proof of insurance specifically covering short-term rentals. This can be either a rider that expressly covers STRs or a commercial insurance policy with a minimum liability coverage of $1,000,000. The policy must list the Town of Portsmouth as an "additional insured" party. Maintain this insurance for the duration of your STR permit.
3. Inspection Reports: Once you've submitted your registration form, you must schedule inspections with the Building Official (401-683-3611) and Fire Marshal (401-683-1200). These inspections verify compliance with building codes, occupancy limits, parking requirements, and fire safety measures like smoke and CO detectors. The officials will provide inspection reports that you submit with your application. You cannot rent your property until it passes these inspections.
4. Registration Fee: Include a check or money order for $130 per rental dwelling unit, payable to the Town of Portsmouth. This covers the registration and inspection fees for the calendar year, regardless of when you register.

After submitting these documents and passing your inspections, the Building Official will issue your short-term rental permit. This permit will state your unit's maximum occupancy, which is 2 persons per bedroom (age 12+), not to exceed the number of bedrooms supported by your property's septic system design.

Display the permit, your STR agreement with renter names, and a summary of town ordinances (noise, parking, trash, etc.) inside your rental unit's main access door. The Town Clerk can provide the ordinance handout.

Ensure you maintain the required renter information (names, addresses, vehicle details) throughout the rental period and for 90 days after. Provide this to town officials upon request for any lawful investigation.

By carefully following these documentation and registration steps, you'll be well on your way to legally operating your Portsmouth short-term rental. The process typically takes 2-4 weeks, so plan accordingly before welcoming your first guests.

Portsmouth Short-Term Rental Taxes

As a short-term rental operator in Portsmouth, RI, it's crucial to understand the various taxes that apply to your business. Here's a breakdown of the key taxes you'll need to collect and remit:

Rhode Island Sales Tax: You must collect and remit a 7% sales tax on the listing price, including any cleaning fees, for reservations of 30 nights or less.

Rhode Island Statewide Hotel Tax: For rentals of private or shared rooms (not entire homes), you must collect and remit a 5% statewide hotel tax on the listing price, including cleaning fees, for stays of 30 nights or less.

Rhode Island Local Hotel Tax: Collect and remit a 1% local hotel tax on the listing price, including cleaning fees, for all reservations of 30 nights or less, regardless of rental type.

These taxes are considered "trust fund taxes," meaning you are collecting them on behalf of the state and must remit them to the Rhode Island Division of Taxation. If you rent your property year-round, file monthly sales and hotel tax returns. For seasonal rentals, file returns only for the months you have rental income.

Tax Deductions and Write-Offs

As a short-term rental operator, you may be eligible for certain tax deductions to offset your income. Here are some potential write-offs:

1. 14-Day Rule: If you rent your property for 14 days or less per year and use it personally for at least 14 days or 10% of the total rental days, you don't need to report the rental income on your taxes.
2. Rental Expenses: You can deduct ordinary and necessary expenses related to your rental business, such as cleaning fees, property management fees, repairs, utilities, insurance, and depreciation.
3. Occupancy Taxes: The sales and hotel taxes you collect and remit are not considered income and can be deducted from your gross rental receipts.

Be sure to keep accurate records of your income and expenses, and consult with a tax professional to ensure you're taking advantage of all available deductions. By understanding Portsmouth's short-term rental taxes and potential write-offs, you'll be well-positioned to run a compliant and profitable rental business.

Rhode Island Statewide Short-Term Rental Rules

In addition to Portsmouth's local regulations, short-term rental hosts must also comply with statewide rules set by the Rhode Island Department of Business Regulation (DBR). As of January 4, 2022, all short-term rentals (defined as 30 days or less) listed on third-party booking websites like Airbnb and Vrbo must be registered with the DBR.

To register, hosts must provide the following information for the DBR's online database:

1. The property owner's name and address
2. The address of the short-term rental property
3. The number of rooms for rent
4. The intended use of the property (entire unit or shared space)
5. Contact information for the owner or a property manager

The DBR notified hosting platforms that they must ensure their listings are compliant by June 1, 2022. Unregistered properties must be removed from the platforms by that date. Hosts who continue to list unregistered STRs face escalating fines:

1. $250 for the first 30 days of non-compliance
2. $500 for 31-60 days of non-compliance
3. $1,000 for violations lasting more than 60 days

The DBR can enact further rules and charge registration fees as needed to enforce the law. The statewide registration requirement is independent of any additional requirements imposed by municipalities like Portsmouth.

Hosts must also collect and remit the appropriate state taxes on their short-term rental income:

1. 7% sales tax on the listing price for stays of 30 nights or less
2. 5% statewide hotel tax on private/shared rooms for stays of 30 nights or less
3. 1% local hotel tax on all reservations of 30 nights or less

By understanding and following both Portsmouth's local ordinances and Rhode Island's statewide short-term rental regulations, hosts can operate their rental businesses legally and avoid costly penalties. The registration process ensures transparency and accountability in this growing industry that generates significant economic activity across the Ocean State.

Does Portsmouth Strictly Enforce STR Rules?

Portsmouth has taken a balanced approach to regulating short-term rentals, aiming to allow property owners to operate STRs while addressing community concerns. The city's enforcement efforts have been effective without being overly strict compared to some other municipalities.

Since implementing the STR ordinance in 2018, the number of registered properties has grown steadily from 25 to 137 as of 2024. This suggests that many hosts are willing to comply with the registration, inspection, and tax requirements in order to legally operate in Portsmouth.

During this period, the city has received a relatively low number of complaints about STRs - just 48 total complaints logged through the Host Compliance platform since 2019. Of these, only 5 were related to occupancy limits, noise, or parking in 2023. This indicates that most STR operators are following the rules and being good neighbors.

While Portsmouth does impose fines for violations, they are not as severe as some cities. First offenses incur a $100 per day fine, escalating to $500 per day for third and subsequent offenses. Three violations within 12 months can result in permit revocation for a year. However, the city has not needed to issue many fines or revocations to achieve compliance.

Compared to places like New York City, which has effectively banned non-owner-occupied STRs, Portsmouth is much more Airbnb-friendly. The city allows STRs in residential zones as long as hosts register, pass inspections, pay taxes, and follow occupancy and parking rules. This balanced approach has enabled the STR market to grow while mitigating potential negative impacts.

Based on discussions in forums like Bigger Pockets and Reddit, most hosts feel they can operate successfully in Portsmouth by carefully following the regulations. The city's reasonable fees, straightforward registration process, and moderate enforcement create an environment where compliant STRs can thrive.

In summary, Portsmouth has found a middle ground on STR regulation that allows hosts to operate profitably while addressing valid community concerns. The city's growing number of registered STRs and low complaint volumes suggest this approach is working well for hosts, guests, and residents alike. While Portsmouth strictly enforces its STR ordinance, it does so in a way that is fair and not overly burdensome on responsible operators.

How to Start a Short-Term Rental Business in Portsmouth

Starting a short-term rental business in Portsmouth, RI involves several key steps to ensure compliance with local regulations and set yourself up for success. Here's a comprehensive guide:

1. Check zoning and eligibility: Confirm your property is located in a zone that allows STRs and complies with any restrictions (e.g., owner occupancy, rental frequency limits). Portsmouth permits STRs in residential zones, but your property must meet certain criteria.
2. Register your STR with the town: Before renting, you must register your property with the Portsmouth Town Clerk using the online registration form. Provide details like owner contact info, property address, and rental unit specifics. Registration is annual and costs $130 per unit (includes inspection fee). Gather all required info before starting the online registration to streamline the process.
3. Schedule and pass inspections: After registering, contact the Building Official (401-683-3611) and Fire Marshal (401-683-1200) to schedule required inspections. They'll verify compliance with building codes, occupancy limits, parking, and fire safety. You can't rent until you pass these inspections. Address any issues promptly to avoid reinspection delays and fees.
4. Obtain your STR permit: Upon passing inspection, the Building Official will issue your STR permit, which states your maximum occupancy (2 persons per bedroom age 12+, not exceeding septic system capacity). Display the permit inside your unit's main entrance.
5. Register with the state: In addition to local registration, you must also register with the RI Dept. of Business Regulation if you list your STR on sites like Airbnb or Vrbo. Provide owner details, property address, and rental specifics in their online database.
6. Prepare your unit for guests: Outfit your STR with necessary furnishings, linens, kitchenware, and amenities to meet guest expectations. Provide essentials like soap, toilet paper, towels, and trash bags. Consider hiring a cleaner to ensure quality between stays. Cater amenities to your target demographic (e.g., families, business travelers).
7. Create a detailed listing: Craft an appealing, informative listing on your chosen rental platform(s). Include high-quality photos, detailed descriptions, house rules, and local attractions. Be transparent about policies, pricing, and fees. Highlight unique selling points to stand out, like waterfront views or luxury finishes.
8. Implement a dynamic pricing strategy: Use market data and tools to optimize your nightly rates based on demand, seasonality, events, etc. Many listing platforms offer smart pricing tools. Consider length-of-stay discounts or minimum stays to boost occupancy.
9. Automate and streamline operations: Utilize vacation rental software to manage reservations, guest communication, cleaning, pricing, and more. These tools save time and improve the guest experience.
10. Comply with tax requirements: Portsmouth STRs must collect and remit a 7% sales tax, 5% statewide hotel tax (private/shared rooms only), and 1% local hotel tax on all stays under 31 nights. Register with the RI Division of Taxation and file returns monthly or seasonally as required.

By following these steps and prioritizing compliance, effective marketing, and guest satisfaction, you'll be well-positioned to launch and grow a successful short-term rental business in Portsmouth. As always, consult with local officials, legal counsel, and tax professionals for the most current and comprehensive guidance.

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

If you have questions about Portsmouth's short-term rental regulations or zoning requirements, here are the key contacts and resources:

1. Portsmouth Building Official: Call 401-683-3611 to schedule your STR inspection and get your permit after registering. The Building Official can also answer questions about occupancy limits, septic system requirements, and other building code issues.
2. Portsmouth Fire Marshal: Call 401-683-1200 to schedule your fire safety inspection. The Fire Marshal ensures your STR meets requirements for smoke and CO detectors, fire extinguishers, and emergency egress. Consult the updated STR fire code information.
3. Portsmouth Town Clerk: Visit the Town Clerk's STR information page for registration forms, fee information, and helpful FAQs for owners and neighbors. The Clerk's office is located at Portsmouth Town Hall, 2200 East Main Road, Portsmouth, RI 02871. Call 401-683-2101 with any questions.
4. Portsmouth Town Planner: Contact Town Planner Lea Hitchen at 401-643-0332 or lhitchen@portsmouthri.com with questions about zoning districts that allow STRs and any potential changes to the regulations. The Planning Department is a good resource for understanding how STRs fit into Portsmouth's long-term plans.
5. Host Compliance: Portsmouth has contracted with this company to provide a 24/7 hotline for STR-related complaints. Neighbors can report issues to 401-336-5552 or file a complaint online. Host Compliance notifies owners of problem properties to resolve issues.

In addition to these official contacts, Portsmouth STR owners can benefit from connecting with the local and global host community:

Airbnb Community Center: Join the Airbnb Community Forum to ask questions and learn from experienced hosts worldwide.

Rhode Island Airbnb Hosts: Search Facebook for this group to connect with local hosts, discuss state-specific issues, and get recommendations for cleaners, handymen, and other service providers.

Bigger Pockets Short-Term Rental Forum: Check out the STR discussions on Bigger Pockets for insights on everything from financing to automation. While not Portsmouth-specific, you'll find a wealth of knowledge here.

By engaging with both local officials and the wider host community, you'll be well-equipped to navigate Portsmouth's evolving short-term rental landscape. Stay informed, follow the registration process, and provide a great guest experience to run a successful and compliant STR business in this charming coastal town.

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

While there are limited discussions specifically about Portsmouth's short-term rental regulations on Reddit and Bigger Pockets, hosts in nearby Rhode Island communities have shared some relevant insights and experiences:

Newport, RI Airbnb Ban Proposal: In a Reddit thread, users discussed a proposed ban on non-owner-occupied short-term rentals in Newport's residential areas. Some felt the ban was needed to address the housing shortage, while others argued it would hurt tourism and property owners who invested under the current rules. The thread highlights the tension between preserving housing and supporting tourism in coastal towns like Portsmouth.

Tough Rental Market in Newport: Another Reddit post by someone struggling to find a long-term rental in Newport sheds light on the tight housing market. With many properties being used as seasonal rentals, it can be challenging for residents to secure affordable year-round housing. This is a concern Portsmouth officials aim to address through STR regulations.

Building an STR Portfolio in New England: In a Bigger Pockets forum post, an investor asked about building a short-term rental portfolio in New Hampshire vs. Florida. They expressed concern about the risk of towns imposing new STR regulations that could impact their investments. While not specific to Portsmouth, this highlights the regulatory uncertainty STR owners face in many New England communities.

Housing Affordability Crisis in Rhode Island: A Reddit discussion on the high cost of housing in Rhode Island provides context for why some towns are regulating STRs. With limited supply and high demand driving up prices, there is pressure to ensure available housing stock isn't all converted to short-term rentals. Portsmouth's regulations aim to strike a balance between allowing STRs and preserving residential character.

While these discussions don't directly involve Portsmouth STR hosts, they reflect the broader debates happening in coastal New England towns. Many communities are grappling with how to regulate the growing short-term rental industry without stifling tourism or infringing on property rights. Portsmouth's measured approach of requiring registration, setting occupancy limits, and enforcing violations seems to be achieving a reasonable compromise so far. However, hosts should stay engaged with any proposed changes to ensure their voices are heard as the town adapts to this evolving industry.

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.