Sag Harbor, New York Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Sag Harbor, New York?

Short-term rentals have become increasingly popular in the Hamptons, particularly in the historic village of Sag Harbor. However, with this rise in popularity comes a need for regulations to ensure the safety and well-being of both residents and visitors. In recent years, Sag Harbor has implemented several laws and ordinances to govern short-term rentals through platforms like Airbnb and VRBO.

Starting a Short-Term Rental Business in Sag Harbor

Before starting a short-term rental business in Sag Harbor, it's essential to understand the local laws and regulations. As of January 1, 2024, the Village of Sag Harbor requires a rental permit for all non-owner-occupied single-family residences, two-family residences, and accessory apartments that are rented out. The rental permit is valid for two years from the date of issuance.

To apply for a rental permit, property owners must submit a completed application to the Village Building Department, which includes:

• Basic information such as the owner's name, property location, and a copy of the lease
• A completed and notarized Rental Property Inspection Checklist, signed off by the property owner, a licensed architect, a licensed engineer, or a licensed home inspector

The inspection checklist covers 12 items, including smoke and carbon monoxide detectors, electrical outlets, egress, and pool areas. Failure to obtain a rental permit can result in fines of up to $1,000 per day.

It's important to note that short-term rentals of less than 30 consecutive days are prohibited in Sag Harbor, with the exception of two rentals of two weeks each within a calendar year. This means that property owners cannot rent out their homes on a nightly or weekly basis through platforms like Airbnb or VRBO.

In addition to the rental permit, property owners must also register each new lease with the Village during the two-year permit period to receive a Lease Registration Certificate. This requirement helps the Village keep track of who is renting properties and ensures that all rentals comply with local laws.

Short-Term Rental Licensing Requirement in Sag Harbor

To legally operate a short-term rental in Sag Harbor, property owners must obtain a rental permit from the Village Building Department. The rental permit is valid for two years from the date of issuance and must be renewed before expiration.

To apply for a rental permit, property owners must submit the following documents to the Village Building Department:

1. A completed Rental Permit Application form
2. Basic information such as the owner's name, property location, and a copy of the lease
3. A completed and notarized Rental Property Inspection Checklist, signed off by the property owner, a licensed architect, a licensed engineer, or a licensed home inspector
4. Floor plans of the entire subject structure or building
5. A copy of the property survey and/or site plan drawn to scale, showing all buildings, structures, walks, driveways, and other physical features
6. Certificates of occupancy and compliance for all structures on the property
7. A signed and notarized Residential Smoke Detector Affidavit
8. An Engineer or Architect Certification of Code Compliance, submitted by a licensed professional if an inspection by a Town of Southampton Inspector is declined
9. A completed Designation of Agent for Service form
10. Proof of ownership if the property is in probate or owned by a Trust, Corp, LLC, or other Business Entity
11. A Refuse Removal Affidavit

The fees for a rental permit vary based on the property owner's circumstances:

1. Standard fee: $350
2. Income Qualified Tenant fee: waived
3. Enhanced Star, Veterans Exemption, or Senior Citizen's Exemption fee: $150
4. Volunteer Fire Department or Ambulance Workers Real Property Exemption fee: $150
5. Inspection / Certification by Licensed Architect or Licensed Engineer fee: $250
6. Senior Citizen or Qualified Disabled Person fee: $150
7. Property in Violation of Chapter 270 (Rental Properties) fee: $500
8. Expedited Rental Permit fee: $750

The processing time for a rental permit application may vary depending on the completeness of the application and the volume of applications received by the Village Building Department. It's best to submit the application well in advance of the intended rental period to allow sufficient time for processing.

Failure to obtain a rental permit can result in fines of up to $1,000 per day that the violation has been conducted, maintained, or permitted. The Village Attorney can also bring a civil proceeding against the property owner and tenants to permanently enjoin the violation.

It's important to note that short-term rentals of less than 30 consecutive days are prohibited in Sag Harbor, with the exception of two rentals of two weeks each within a calendar year. Property owners must also register each new lease with the Village during the two-year permit period to receive a Lease Registration Certificate.

By following these requirements and obtaining the necessary permits, property owners can legally operate short-term rentals in Sag Harbor while contributing to the Village's economy and character.

Required Documents for Sag Harbor Short-Term Rentals

To obtain a rental permit in Sag Harbor, property owners must submit the following documents to the Village Building Department:

1. Rental Permit Application: This form includes basic information such as the owner's name, property location, and a copy of the lease. It must be signed, sworn to, and notarized by the owner(s) of the premises and the managing agent, if applicable.
2. Floor Plans: Floor plans drawn to ¼" – 1' scale of the entire subject structure or building, depicting the location and size of each conventional bedroom. Locations of smoke alarms & carbon monoxide detectors must be noted.
3. Property Survey or Site Plan: A copy of the property survey and/or site plan drawn to scale, showing all buildings, structures, walks, driveways, and other physical features.
4. Certificates of Occupancy and Compliance: Certificates of Occupancy and Compliance for all structures on the property. If any structures do not hold a certificate, a Building Permit Application is needed.
5. Rental Property Inspection Checklist: A completed and notarized Rental Property Inspection Checklist, signed off by the property owner, a licensed architect, a licensed engineer, or a licensed home inspector. This checklist covers 12 items, including smoke and carbon monoxide detectors, electrical outlets, egress, and pool areas.
6. Residential Smoke Detector Affidavit: A signed and notarized affidavit confirming that smoke alarms have been installed in compliance with current codes.
7. Designation of Agent for Service: A completed form authorizing notice of violation or summons to be delivered to an authorized agent. If the Village Clerk is chosen, the notice will be sent to the applicant (homeowner).
8. Refuse Removal Affidavit: An affidavit confirming the property has refuse removal service, or the homeowner will handle it themselves.
9. Proof of Ownership: A copy of the most recent deed must be included if the property is in probate or owned by a Trust, Corp, LLC, or other Business Entity.
10. Tenant Affidavit: An affidavit, signed by each owner and tenant named in the application, confirming that they have reviewed copies of all Village laws and ordinances pertaining to the rental of residential properties.

The rental permit is valid for two years from the date of issuance. As a condition of the permit, each new lease during this period must be registered with the Village to receive a Lease Registration Certificate. Lease Registration/Change of Tenant forms must be submitted before the lease starts.

Failure to obtain a rental permit can result in fines of up to $1,000 per day that the violation has been conducted, maintained, or permitted. The Village Attorney can also bring a civil proceeding against the property owner and tenants to permanently enjoin the violation.

By following these requirements and submitting the necessary documents, property owners can legally operate short-term rentals in Sag Harbor while contributing to the Village's economy and character.

Sag Harbor Short-Term Rental Taxes

When operating a short-term rental business in Sag Harbor, New York, it's essential to understand the various taxes that apply to your rental income. Failing to comply with these tax obligations can result in penalties and legal issues. Here's a breakdown of the taxes you need to be aware of:

Suffolk County Hotel and Motel Tax

As of June 1, 2023, Suffolk County requires all lodging facilities, including short-term rentals, to collect a 5.5% occupancy tax from guests staying for less than 30 consecutive days. This tax is based on the per-diem rental rate charged for each room. Landlords must register their rental property with the Suffolk County Comptroller's Office within 10 days of the first lodging rental and prominently display the Certificate of Authority in the rental unit.

New York State Sales Tax

In addition to the Suffolk County Hotel and Motel Tax, short-term rentals in Sag Harbor are subject to the New York State Sales Tax, which is currently 4%. This tax is added to the rental rate and must be collected from guests and remitted to the state.

Income Tax

Rental income earned from your short-term rental business is subject to federal and state income taxes. The amount of tax you owe depends on your total rental income, deductible expenses, and tax bracket. It's crucial to keep accurate records of all rental transactions and consult with a tax professional to ensure compliance.

Possible Write-Offs and Deductions

As a short-term rental business owner, you may be eligible for various tax deductions that can help reduce your overall tax liability. Some common deductions include:

1. Property taxes: You can deduct the full amount of property taxes paid on your rental property as a business expense.
2. Mortgage interest: If you have a mortgage on your rental property, you can deduct all of the mortgage interest as a business expense.
3. Utilities: Expenses for water, electricity, gas, internet, cable, and trash removal can be deducted for the months your property is rented out.
4. Repairs and maintenance: Costs associated with maintaining and repairing your rental property, such as cleaning fees, landscaping, and general upkeep, are tax-deductible.
5. Insurance premiums: Premiums paid for insurance coverage on your rental property, such as landlord insurance or liability insurance, can be deducted as a business expense.
6. Advertising and marketing: Expenses related to promoting your short-term rental, such as listing fees on platforms like Airbnb or VRBO, can be written off.

It's essential to consult with a tax professional who specializes in short-term rental businesses to ensure you're taking advantage of all available deductions and complying with all tax requirements. Proper record-keeping and documentation are crucial for substantiating your deductions in case of an audit.

By understanding the various taxes and potential deductions associated with your short-term rental business in Sag Harbor, you can better manage your finances and maximize your profitability while staying compliant with local, state, and federal tax laws.

New York Wide Short-Term Rental Rules

In addition to Sag Harbor's local regulations, short-term rental hosts must also comply with New York State laws. These statewide rules provide a framework for local governments to build upon and enforce.

The New York State Multiple Dwelling Law is the primary legislation regulating short-term rentals. It distinguishes between two main types of dwellings:

1. "Class A" multiple dwellings include residential buildings like apartment houses and condominiums. Short-term rentals for less than 30 consecutive days are prohibited in these dwellings unless the permanent resident is present throughout the guest's stay.
2. "Class B" multiple dwellings include hotels, lodging houses, and dwellings designed for transient occupancy. These are permitted to host short-term stays.

The Multiple Dwelling Law essentially prohibits short-term rentals in residential buildings, with some exceptions for owner-occupied units. However, a bill passed the New York State Senate in June 2023 that would establish a statewide short-term rental registry, similar to those in other states. While not yet law, this legislation aims to bring more transparency and help municipalities balance the benefits and challenges of short-term rentals.

In terms of taxes, New York State requires short-term rental hosts to collect and remit several levies:

1. New York State sales tax: 4%
2. Local city or county occupancy taxes: 3% to 6%
3. Local sales taxes

It's critical for hosts to understand that rentals are considered "short-term" for tax purposes if rented for less than 90 consecutive days. Stays of 90 days or more are exempt from sales tax.

Advertising restrictions also apply statewide. It is illegal to advertise a short-term rental in a Class A multiple dwelling (buildings with 3+ permanent residential units) for occupancy of less than 30 days. Fines range from $1,000 to $7,500.

While these statewide laws provide a baseline, many popular New York destinations like New York City, Buffalo, and Rochester have implemented their own, often more stringent, local regulations. Sag Harbor hosts must ensure compliance with both state and municipal rules to avoid penalties and operate legally.

As short-term rental regulations continue to evolve in New York, it's essential for hosts to stay informed about any legislative changes at the state and local levels that could impact their ability to rent out their properties.

Does Sag Harbor Strictly Enforce STR Rules?

Based on discussions among short-term rental hosts on forums like BiggerPockets and Reddit, it appears that Sag Harbor does indeed strictly enforce its short-term rental regulations compared to many other cities. The consensus is that operating an Airbnb or VRBO in Sag Harbor while flouting the rules is very risky.

One BiggerPockets user noted that there are "relatively new (last couple of years) very strict and enforced regulations on short-term rentals in East Hampton, which includes Montauk that only allows a very limited number of short-term rentals." This suggests that the Hamptons area, in general, Sag Harbor included, is cracking down hard on illegal short-term rentals.

Reddit users also warn that Sag Harbor and the surrounding towns are not very Airbnb friendly currently. As one Redditor put it bluntly, "It is already against village law to rent for less than two weeks, but the residents told the board the law is widely ignored." However, with the implementation of the new rental registry and permitting process in Sag Harbor starting January 1, 2024, the village now has better tools to identify and penalize non-compliant short-term rentals.

While some desperate hosts may still attempt to skirt the regulations and operate covertly, the risks seem to outweigh the rewards in Sag Harbor. With potential fines of up to $1,000 per day for violations, plus the possibility of neighbors reporting illegal activity, most hosts agree it's unwise to run an unauthorized short-term rental in this jurisdiction. The village appears fully committed to preserving its community character and rental housing stock.

In conclusion, based on the prevailing sentiment among short-term rental host communities online, I believe Sag Harbor is one of the stricter and more challenging places to operate an Airbnb or VRBO, especially compared to regulation-light cities in other parts of the country. The village government is actively monitoring the situation and enforcing the rules, making it an unfriendly environment overall for aspiring short-term rental entrepreneurs who don't carefully follow the new registration and permitting requirements to the letter.

How to Start a Short-Term Rental Business in Sag Harbor

Starting a short-term rental business in Sag Harbor can be a lucrative venture, but it requires careful planning and adherence to local regulations. Here's a step-by-step guide to help you get started:

1. Research the local vacation rental market: To enter a new market, one must first get to know their competitors and how they fare in the current landscape. Analyze the types of properties available, their amenities, pricing, and occupancy rates. This will give you a better understanding of what works in Sag Harbor and help you identify potential gaps in the market that your property can fill.
2. Acquire necessary permits: Before renting out your Sag Harbor home, ensure that you can legally do so. As of January 1, 2024, Sag Harbor requires homeowners to obtain a rental permit from the Village Building Department for rentals exceeding two weeks. The application process involves submitting basic information about the property, a copy of the lease, and a completed rental property inspection checklist. Failure to obtain a permit can result in fines of up to $1,000 per day.
3. Prepare your home: Create a comfortable and inviting space for your guests. Remove personal items and clutter, and ensure the home is thoroughly cleaned. Provide essential amenities such as linens, towels, kitchenware, and basic toiletries. Consider hiring a professional cleaning service to maintain the property between guest stays.
4. Obtain proper insurance: Consult with your insurance provider about the necessary coverage for operating a short-term rental. You may need to update your homeowner's policy or purchase additional liability insurance to protect yourself and your property.
5. Create an attractive listing: Showcase your property's best features through high-quality photos and a compelling description. Highlight unique amenities, proximity to local attractions, and any special features that set your rental apart from others. Be accurate and transparent in your listing to manage guest expectations.
6. Set competitive pricing: Research the rates of similar properties in the area to determine a competitive price for your rental. Consider factors such as seasonality, events, and demand when setting your rates. Utilize dynamic pricing tools to automatically adjust prices based on market conditions.
7. List your property on popular platforms: Reach a wider audience by listing your rental on popular vacation rental websites such as Airbnb, VRBO, and Booking.com. Ensure your listing is complete, accurate, and follows each platform's guidelines.
8. Establish house rules and policies: Clearly communicate your expectations to guests through a set of house rules and policies. Cover topics such as check-in/check-out times, maximum occupancy, pet policies, smoking, and noise levels. Having clear guidelines helps prevent misunderstandings and protects your property.
9. Automate your operations: Streamline your rental management by utilizing vacation rental software. These tools can help you manage bookings, communicate with guests, coordinate cleanings, and handle payments. Automation saves time and ensures a seamless experience for both you and your guests.
10. Provide excellent customer service: Respond promptly to guest inquiries, provide clear instructions for check-in and check-out, and be available to address any concerns during their stay. Encourage guests to leave reviews and use their feedback to continually improve your rental offering.

By following these steps and staying informed about local regulations, you can successfully launch and operate a short-term rental business in Sag Harbor. Remember to prioritize guest satisfaction, maintain your property to a high standard, and adapt to changes in the market to ensure long-term success.

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

If you have questions about short-term rental regulations or zoning in Sag Harbor, the best place to start is the Village Building Department. They are responsible for issuing rental permits, conducting inspections, and enforcing the village's rental laws.

You can contact the Sag Harbor Building Department at:

Sag Harbor Building Department
55 Main Street
P.O. Box 660
Sag Harbor, NY 11963
Phone: (631) 725-0224

Key contacts:

1. Tien Ho So, Building Inspector: thoso@sagharborny.gov
2. George Pfriender, Building Inspector
3. Bruce Schiavoni, Fire Marshal: bschiavoni@sagharborny.gov

The Building Department is open Monday through Friday. Appointments can be made to speak with the building inspectors about specific questions or concerns.

For general zoning questions, you can also reach out to the Sag Harbor Village Clerk's office at (631) 725-0222.

In addition to official village resources, connecting with other short-term rental hosts in the area can provide valuable insights and support. While there don't appear to be any Sag Harbor-specific host groups, there are some online communities where you can connect with hosts in the Hamptons and greater Long Island area:

Airbnb Community Center - Long Island Clubs & Local Lounges: https://community.withairbnb.com/t5/Long-Island/gh-p/en-long-island

This is an Airbnb-hosted forum where hosts in the Long Island area can ask questions, share experiences, and discuss local regulations.

Hamptons Home Sharing & Short-Term Rental Alliance (Facebook Group): https://www.facebook.com/groups/1031719860526713/

This private Facebook group is a place for Hamptons area hosts to connect, share resources, and advocate for fair short-term rental policies.

East End Short-Term Rental Alliance (Facebook Group): https://www.facebook.com/groups/687016955450511/

Another Facebook community for vacation rental owners, managers, and supporters in the Hamptons and North Fork areas of Long Island.

By engaging with both official village channels and informal host networks, you can stay informed about the evolving regulatory landscape for short-term rentals in Sag Harbor. Building positive relationships with village officials and fellow hosts is key to operating a successful and compliant rental business in this historic seaside community.

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

To get a sense of how short-term rental regulations are impacting hosts on the ground in Sag Harbor, I searched through relevant threads on Reddit, Bigger Pockets, and Airbnb community forums. Here are a few key takeaways from real host experiences and discussions:

On the Airbnb Community Center, one host shared their frustration with Sag Harbor's strict rental registry requirements that went into effect in January 2024. The host complained that the new law requiring a permit and inspection for rentals over 2 weeks was "overreach" and made it very difficult for them to continue hosting their property part-time. Several other hosts chimed in agreeing the process was overly burdensome.

In a Bigger Pockets forum thread titled "Anyone own rental properties in Sag Harbor/Hamptons/Montauk?", an investor asked about realistic rental income potential in the area. One reply warned that there are "relatively new (last couple of years) very strict and enforced regulation on short term rentals in East Hampton which includes Montauk that only allows a very limited number of short term rentals." This suggests STR restrictions are making it tougher for hosts in Sag Harbor and surrounding Hamptons towns.

A Reddit thread in r/AirBnB discussed issues with guests unknowingly booking illegal short-term rentals in cities with strict regulations. One commenter noted from their experience: "It is already against village law to rent for less than two weeks in Sag Harbor, but the residents told the board the law is widely ignored." However, with Sag Harbor implementing a new rental registry in 2024, the village now has better tools to identify and penalize non-compliant listings.

Another Redditor in the r/airbnb_hosts subreddit shared an automated message they received from Airbnb warning that their listing could be suspended or removed for "failure to follow ground rules", after getting a couple 3-star reviews. Hosts in the comments debated whether this was a new Airbnb policy that could unfairly penalize hosts, even those with stellar track records. While not Sag Harbor specific, it points to the challenges of navigating evolving STR regulations and platform rules.

Overall, the sentiment from hosts on these forums is that short-term rental regulations in Sag Harbor and the Hamptons have gotten much stricter in recent years. Many long-time hosts are frustrated by the added red tape and requirements of new rental registry laws. At the same time, the village seems committed to cracking down on illegal and non-compliant listings. This is putting pressure on hosts to get proper permits and follow all the rules closely, or risk fines and removal from platforms like Airbnb.

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.