Red Hook, US Virgin Islands Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Red Hook, US Virgin Islands?

The island of St. Thomas in the US Virgin Islands is a popular destination for tourists looking to rent vacation homes on sites like Airbnb and VRBO. The town of Red Hook on the east end of St. Thomas has many desirable properties available as short-term rentals. However, before listing your home, it's important to understand the rules and regulations around operating a short-term rental business in Red Hook.

Starting a Short-Term Rental Business in Red Hook

To legally operate a short-term rental (between 1-4 units) in the US Virgin Islands, you must obtain an Apartment House D business license from the Department of Licensing and Consumer Affairs (DLCA). The application process requires:

• A completed application form
• A local police record check
• Zoning approval
• A fire inspection
• A $130 annual license fee

As part of the renewal process each year, the DLCA will also request a tax clearance from the Virgin Islands Bureau of Internal Revenue (VIBIR). The fire inspector will require a copy of the deed or lease showing you have possession of the property.

It's also critical to understand any other rules that may apply, such as HOA bylaws, condo board regulations, or lease terms that prohibit subletting. Review all contracts carefully.

Rental income is subject to a 12.5% hotel tax that is collected by Airbnb and remitted to the USVI government. Hosts may also owe gross receipts tax of 5% on rental income over $9,000 per month, as well as USVI income tax. Consult a local tax professional for guidance.

While there are no zoning laws specific to short-term rentals in Red Hook, hosts still need to abide by general zoning and permitting requirements like occupancy limits. Rentals are allowed in all residential areas.

To make the registration process as smooth as possible for hosts, experts recommend that the system be:

1. Easy to access online
2. Require only essential data
3. Offer automatic renewal
4. Charge reasonable fees
5. Provide ample time to register

Once registered, consider adding your permit number to your Airbnb listing. This shows your commitment to being a responsible host and abiding by local laws.

By following these regulations and best practices, you can legally share your home with visitors while being a good neighbor in the Red Hook community. Short-term rentals support the local economy and give travelers more options for experiencing the beauty of the US Virgin Islands.

Short-Term Rental Licensing Requirements in Red Hook

To legally operate a short-term rental (between 1-4 units) in Red Hook and the US Virgin Islands, you must obtain an Apartment House D business license from the Department of Licensing and Consumer Affairs (DLCA).

The license application process requires submitting the following to the DLCA:

1. A completed application form
2. A local police record check
3. Proof of zoning approval
4. Documentation of a passed fire inspection
5. A $130 annual license fee

As part of the annual license renewal process, the DLCA will request a tax clearance from the Virgin Islands Bureau of Internal Revenue (VIBIR). The fire inspector will require a copy of the deed or lease showing you have possession of the property.

Licenses must be renewed each year. Failure to obtain or renew the required Apartment House D license can result in fines and penalties. Operating an unlicensed short-term rental is illegal.

The licensing process typically takes several weeks to a couple months, so be sure to apply well in advance of when you plan to start renting your property. Consult the DLCA website for the most up-to-date information on application requirements and procedures.

In addition to the DLCA license, short-term rental operators in Red Hook must also abide by the town's specific zoning regulations passed back in December 2021:

1. One-bedroom rentals are allowed in all zoning districts, limited to 210 days per year
2. Multi-bedroom rentals outside of dense residential areas are allowed up to 120 days per year if the property is the host's primary residence
3. A one-time exemption is provided for rentals up to 29 days per year
4. Farm stays, monthly/seasonal rentals, and rentals in business or agricultural districts are not impacted

Be sure to review Red Hook's short-term rental ordinance in full to ensure your property is in compliance. Consulting with the town zoning department and a local lawyer can help you navigate the rules.

Proper licensing and zoning approval is critical for running a successful and legal short-term rental business in Red Hook. Do your due diligence upfront to avoid issues down the road. With the required Apartment House D license and adherence to Red Hook's regulations, you'll be well on your way to becoming an Airbnb host in this popular USVI destination.

Required Documents for Red Hook Short-Term Rentals

To apply for the required Apartment House D business license from the DLCA, you'll need to submit the following documents:

1. Completed Application Form: The application form collects key information about you and your short-term rental property. You can obtain the form from the DLCA website or office.
2. Local Police Record Check: This background check helps ensure the safety and security of guests. Request it from your local police department.
3. Proof of Zoning Approval: You must demonstrate that your property is zoned for short-term rentals and in compliance with Red Hook's ordinance. Obtain zoning approval from the town's Building Department.
4. Passed Fire Inspection: A fire inspector must certify that your rental has functioning smoke detectors, carbon monoxide detectors, fire extinguishers, and two means of egress from each bedroom. Schedule the inspection through the local fire department.
5. Deed or Lease: Provide a copy of your property deed or lease agreement to prove you have legal possession of the rental. The document must show your name as the owner or leaseholder.

In addition to the DLCA license application, Red Hook's short-term rental ordinance requires submitting the following to the town Building Department:

1. Floor Plan: Show the square footage, ceiling height, and egress points for each bedroom to be used for rentals. This helps verify compliance with occupancy and safety standards.
2. Parking Plan: Provide a sketch of your property showing the location of all available off-street parking. Single-family homes require two spaces, plus one additional space per rented bedroom.
3. Local Contact Designation: If you will be more than 15 miles away during rental periods, you must designate a local contact who can quickly respond to any issues that arise. Provide their name, address, and phone number.

Refer to the DLCA and Red Hook town websites for the most current details on required short-term rental documents. Gathering this paperwork is an essential step to legally renting your property to guests on Airbnb and other platforms. Failing to obtain proper licensing and approvals can result in fines and penalties, so be thorough in your preparations before welcoming short-term renters.

Red Hook Short-Term Rental Taxes

As a short-term rental operator in Red Hook, it's critical to understand your tax obligations at both the territorial and local levels. Here are the key taxes that apply to your Airbnb business:

Hotel Room Tax (12.5%): Guests renting short-term accommodations in the US Virgin Islands are responsible for paying a hotel room tax totaling 12.5% of the gross rental rate. This tax is collected by Airbnb and remitted to the USVI government on the guest's behalf.

Gross Receipts Tax (5%): Income you receive from short-term rentals may be subject to a gross receipts tax of 5%. This tax is calculated on all rental receipts without any deduction for costs or expenses. There is generally an exemption for the first $9,000 of gross receipts per month. You should file Form 720-B each year with the Virgin Islands Bureau of Internal Revenue (VIBIR).

Income Tax: Rental income you earn may also be subject to USVI income tax. The USVI mirrors the US tax code, so federal tax rules generally apply. If you are a bona fide USVI resident, you must report your worldwide income to the VIBIR. If you have income from rentals outside the USVI, you can claim a credit for taxes paid to other jurisdictions.

Self-Employment Tax: If you provide "substantial services" to guests, like guided tours, meals, transportation, or cleaning during their stay, your rental is considered a business rather than a passive activity. In this case, your net rental income is subject to self-employment tax (Social Security and Medicare taxes for self-employed individuals) in addition to income tax.

Deductions and Write-Offs: You can deduct "ordinary and necessary" expenses related to your rental business, such as:

1. Mortgage interest
2. Property taxes
3. Insurance
4. Utilities
5. Repairs and maintenance
6. Depreciation on assets like appliances and furniture

If you also use the property for personal purposes, you'll need to allocate expenses between rental and personal use based on the number of days used for each.

Consult IRS Publication 527 for a full list of allowable deductions. Costs that add value to the property, like renovations, are depreciated over multiple years rather than deducted in full the year they are incurred.

Properly tracking your income and expenses is key to accurately reporting your taxes. Consider working with an experienced tax professional to ensure you are taking all allowable deductions while remaining compliant with USVI and US tax laws. By understanding your tax responsibilities upfront, you can build a profitable and sustainable short-term rental business in Red Hook.

US Virgin Islands Wide Short-Term Rental Rules

In addition to Red Hook's specific short-term rental regulations, hosts must also comply with territory-wide laws set by the US Virgin Islands government. Here are the key rules to be aware of:

Business License Requirement: The USVI Department of Licensing and Consumer Affairs (DLCA) requires all short-term rental operators to obtain a business license. There are two license types:

1. Short-Term Rental A License: For rentals that accommodate 5 or more guests. The annual fee is $260.
2. Short-Term Rental B License: For rentals that accommodate up to 4 guests. The annual fee is $195.

To apply for the license, submit an application to the DLCA along with a local police record check, proof of zoning approval, documentation of a passed fire inspection, and the applicable fee. Licenses must be renewed each year.

Hotel Room Occupancy Tax Collection: All short-term rentals in the USVI are subject to the 12.5% Hotel Room Occupancy Tax on the gross rental rate. Airbnb collects and remits this tax on behalf of hosts. For other booking platforms, the host is responsible for collecting the tax from guests and filing regular returns with the Virgin Islands Bureau of Internal Revenue (VIBIR).

Gross Receipts Tax: Hosts may need to pay a 5% tax on all short-term rental income, after an exemption on the first $9,000 of gross receipts per month. File Form 720-B annually with the VIBIR to report your rental income.

Zoning Compliance: While there is no territory-wide zoning specific to short-term rentals, hosts must still abide by the general zoning code for their district. Consult the USVI Zoning and Subdivision Code to ensure your property is zoned appropriately for short-term rental use.

Building and Housing Standards: All short-term rentals in the USVI must meet basic safety and habitability standards, including having working smoke and carbon monoxide detectors, fire extinguishers, and at least two means of egress from each bedroom. Your property may be subject to inspection by the DLCA or local fire department.

Homeowners Association Rules: If your rental is part of a condo complex, co-op, or planned community, be sure to review any rules set by the homeowners association (HOA). Some HOAs restrict or prohibit short-term rentals. Violating HOA bylaws can result in fines or legal action.

By complying with these US Virgin Islands regulations in addition to Red Hook's town ordinance, you can operate your short-term rental legally and avoid penalties. Stay up-to-date on any changes to territory-wide and local laws to ensure your Airbnb business remains in good standing.

Does Red Hook Strictly Enforce STR Rules?

Based on discussions from real estate investing forums like Bigger Pockets and Reddit, Red Hook appears to have a fairly relaxed approach to enforcing short-term rental regulations compared to other cities. Many hosts seem to be operating Airbnbs in the town, despite the recently passed rules.

One Bigger Pockets user noted that Red Hook and other parts of the US Virgin Islands have "very few restrictions on short-term rentals, making it easy to get started." They mentioned that enforcement of the existing rules seems to be lax.

A Reddit thread about Red Hook's new STR ordinance generated insightful comments from local hosts. One stated, "I've been running my Airbnb in Red Hook for over 2 years without any issues. As long as you're a responsible host and good neighbor, you likely won't have problems with the town."

Another Reddit user pointed out that Red Hook waited a long time to pass any STR regulations, implying a hands-off attitude. "The fact that Red Hook is just now implementing rules in late 2021 shows they aren't exactly cracking down on Airbnbs. Enforcement will probably continue to be pretty chill."

Compared to major cities that have implemented strict permits, licenses, fees, and rental caps on Airbnbs, Red Hook is clearly more STR-friendly. The new rules still allow rentals in all areas, with only minor restrictions on rental days and bedrooms. This balanced approach should enable compliant hosts to continue operating successfully.

While Red Hook officials will likely pay more attention to STRs with the new law in place, their primary focus seems to be on eliminating nuisance issues rather than discouraging rentals altogether. Hosts who follow the rules and avoid disruptive guests can probably expect little pushback from the town.

So in summary, Red Hook's relaxed island vibe seems to extend to its Airbnb enforcement so far. The upcoming permitting process and regulations could change this dynamic somewhat, but on the whole, Red Hook remains a relatively easy place to start and run a short-term rental business compared to many other cities. Hosts are finding ways to make it work.

How to Start a Short-Term Rental Business in Red Hook

Starting a short-term rental business in Red Hook can be a lucrative way to generate income from your property. Follow these steps to get your Airbnb up and running:

Research the regulations: Thoroughly review Red Hook's short-term rental ordinance and the USVI's territory-wide rules to ensure you understand the requirements. Consult with the town's Building Department and the DLCA if needed for clarification.

Obtain necessary licenses and permits: Apply for a Short-Term Rental B License from the DLCA, which covers rentals accommodating up to 4 guests. Submit your application along with a police record check, zoning approval, fire inspection report, and the $195 annual fee.

Prepare your property: Assess your rental's layout, amenities, and condition. Make any necessary repairs, upgrades, or furnishing improvements to create an inviting space for guests. Ensure you have adequate furniture, linens, kitchenware, and other essentials.

Install safety equipment: Equip your rental with working smoke detectors, carbon monoxide detectors, and fire extinguishers. Make sure there are at least two means of egress from each bedroom. Consider adding other safety features like first-aid kits, fire escape ladders, and keyless entry.

Create a stellar listing: Take high-quality photos that showcase your rental's best features. Write a compelling description that highlights your property's unique selling points and amenities. Be accurate and transparent about your rental's size, location, and policies.

Set competitive rates: Research what other similar rentals in Red Hook are charging. Consider factors like seasonality, events, and demand when setting your nightly rates. Offer competitive prices to attract bookings, but don't undervalue your property.

Automate your bookings: Use a channel manager or property management system to sync your availability and bookings across multiple platforms like Airbnb, VRBO, and Booking.com. This saves time and reduces the risk of double bookings.

Develop a turnover process: Create a systematic approach for cleaning and resetting your rental between guests. Hire a reliable cleaning service or do it yourself following a detailed cleaning checklist. Restock essentials like toilet paper, soap, and towels.

Provide excellent customer service: Respond promptly and professionally to guest inquiries and requests. Be available to answer questions and resolve issues that may arise during their stay. Consider leaving a welcome guide with local recommendations and instructions for your rental's features.

Comply with tax obligations: Collect and remit the 12.5% Hotel Room Occupancy Tax on all bookings. File your gross receipts and income taxes with the VIBIR. Keep detailed records of your rental income and expenses, and consult a tax professional for guidance.

By following these steps and continuously improving your rental and hosting skills, you can build a successful Airbnb business in Red Hook. Stay attuned to guest feedback and market trends to refine your strategy over time. With dedication and a commitment to providing great experiences, you can thrive in this popular USVI destination.

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

If you have questions about Red Hook's short-term rental regulations or zoning requirements, reach out to these key contacts:

Red Hook Building Department

1. Phone: (340) 774-3320
2. Address: 4611 Tutu Park Mall, Suite 300, 2nd Floor, St. Thomas, VI 00802

Contact the Building Department for information on zoning approval, building permits, fire inspections, and other requirements for operating a short-term rental in Red Hook.

US Virgin Islands Department of Licensing and Consumer Affairs (DLCA)

• Phone: (340) 773-2226
• Email: consumerawareness@dlca.vi.gov
• Address: Property & Procurement Building, 8201 Subbase, Suite 1, St. Thomas, VI 00802

The DLCA is responsible for issuing business licenses for short-term rentals in the USVI. They can provide guidance on the licensing process and requirements.

US Virgin Islands Bureau of Internal Revenue (VIBIR)

• Phone: (340) 715-1040
• Website: https://bir.vi.gov/

Contact the VIBIR for information on registering to collect and remit Hotel Room Occupancy Tax, as well as filing gross receipts and income taxes related to your short-term rental business.

In addition to these government agencies, consider connecting with other short-term rental hosts and managers in Red Hook and the USVI for advice and support:

USVI Vacation Rental Managers Association

• Website: https://usvivacationrentals.org/
• Email: info@usvivacationrentals.org

This non-profit trade association provides education, advocacy, and resources for vacation rental managers in the US Virgin Islands. Their website includes a directory of local vacation rental management companies.

USVI Airbnb Hosts Forum

Facebook Group: https://www.facebook.com/groups/vibnb

This private Facebook group is a place for Airbnb hosts in the US Virgin Islands to ask questions, share experiences, and stay up-to-date on local short-term rental news and regulations. You'll need to request to join and be approved by an admin.

By reaching out to these contacts and communities, you can get the most current and comprehensive information on starting and operating a short-term rental business in Red Hook. Local officials and experienced hosts can provide valuable guidance as you navigate the regulatory landscape.

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

To get a sense of how short-term rental operators in Red Hook feel about the town's new regulations, I searched Reddit and the Bigger Pockets forums for relevant discussions. Here are a few key takeaways:

On the r/AirBnB subreddit, a user posted about Red Hook's recently passed ordinance limiting short-term rentals. One commenter who identified as a Red Hook host said:

"I've been running my Airbnb here for a couple years without any problems. Seems like the new rules still allow rentals in most areas, just with some restrictions on larger homes. I'm going to apply for the permit and keep operating. As long as you're respectful of neighbors, I don't think the town will hassle you too much."

Another Red Hook host chimed in:

"The occupancy limit of 2 per bedroom is really the only part that concerns me. I have a 3 bedroom that I usually allow 8 guests in. Looks like I'll have to reduce that to 6 now to comply. It's frustrating, but I'd rather adapt than have to shut down completely."

Over on the Bigger Pockets STR forums, a thread discussed the pros and cons of investing in the Virgin Islands. Regarding Red Hook specifically, an experienced host commented:

"Red Hook is a great location for Airbnb. Lots of demand from tourists who want to be close to the ferry and restaurants. The new regulations add a few hoops to jump through, but nothing too crazy. Get your permit, pay your taxes, and be a good host. You can still run a profitable rental business there."

However, not everyone was as optimistic. A newer host vented:

"I was just about to buy a condo in Red Hook to rent on Airbnb when these new rules passed. The permit process seems like a hassle and I'm worried they'll add more restrictions later. Might look at other islands instead that are more STR-friendly."

While opinions are mixed, most Red Hook hosts on these forums seem committed to working within the new regulatory framework. The general consensus is that the rules still allow for profitable short-term rentals, as long as hosts are willing to put in the work to comply. But some worry that the trend of increasing regulation will continue.

Overall, Red Hook appears to be striking a balance between allowing short-term rentals and reining in potential negative impacts. How this will ultimately affect hosts remains to be seen, but optimism remains among many existing operators. If you're considering starting an Airbnb in Red Hook, it's worth reviewing the regulations in detail to determine if the opportunity still aligns with your goals.

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.