Chester County, Pennsylvania Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Chester County, Pennsylvania?

Short-term rentals, such as those offered through platforms like Airbnb and VRBO, have become increasingly popular in Chester County, Pennsylvania. However, municipalities in the county have varying regulations governing these rentals. It's crucial for property owners to understand and comply with these rules to avoid potential legal issues.

Starting a Short-Term Rental Business in Chester County

Before launching a short-term rental business in Chester County, property owners should familiarize themselves with the specific regulations in their municipality. The Chester County Planning Commission provides guidance to municipalities interested in allowing and regulating short-term rentals.

Municipalities may regulate short-term rentals through zoning ordinances or building codes. These regulations can address issues such as neighborhood compatibility, housing supply, and municipal regulatory control.

For example, in West Chester Borough, a new ordinance is being considered that would allow short-term rentals in the Town Center district, with certain conditions. Under this proposed ordinance, short-term rentals would be defined as "any dwelling unit rented for the purpose of overnight lodging for a period of less than 30 days". Property owners would need to obtain a conditional use permit from the Borough Council and meet specific requirements, such as providing one off-street parking space per bedroom if the rental is located in a residential permit parking area.

Additionally, West Chester Borough is considering implementing a short-term rental permit system, which would require property owners to obtain a permit identifying the rental unit and the owner or operator.

It's important to note that regulations can vary significantly between municipalities. For instance, while West Chester Borough is considering allowing short-term rentals in specific areas, other municipalities in Chester County may have more restrictive policies or even prohibit short-term rentals altogether.

Property owners should also be aware of potential tax implications. In Chester County, a hotel room rental tax may apply to short-term rentals. The term "rent" in this context includes any charge for the use of a room in a hotel or other facility.

To navigate these complex regulations, property owners should consult with local officials, such as the zoning or planning department, and review the relevant ordinances and codes. Engaging with local real estate forums, like Bigger Pockets or Reddit, can also provide valuable insights and experiences from other short-term rental operators in the area.

In conclusion, starting a short-term rental business in Chester County requires careful research and compliance with municipal regulations. By understanding and adhering to these rules, property owners can successfully operate their rentals while contributing to the local economy and tourism industry.

Short-Term Rental Licensing Requirement in West Chester

To legally operate a short-term rental in West Chester, property owners must obtain a license from the Borough. The licensing process ensures that STRs meet specific requirements and standards to protect public health, safety, and welfare.

According to the West Chester Borough website, the following requirements must be met to obtain an STR license:

• Zoning Compliance: The property must be located in a zoning district that allows short-term rentals. Currently, West Chester Borough is considering limiting STRs to the Town Center district.
• Occupancy Limits: The maximum occupancy for an STR is two guests per bedroom. The entire property must be rented, and individual bedroom rentals are not permitted.
• Parking Requirements: The property owner must provide one off-street parking space per bedroom if the rental is located in a residential permit parking area. The parking space must be on the same lot as the STR or directly across the street.
• Safety Inspections: The property must pass a safety inspection conducted by the Borough's Code Enforcement Officer. The inspection will verify compliance with fire safety requirements, such as working smoke alarms and carbon monoxide detectors.
• Insurance: The property owner must maintain liability insurance coverage for the STR.
• Local Contact: The property owner must provide a local contact person who can respond to any issues or complaints within 30 minutes.

To apply for an STR license, property owners must submit the following to the West Chester Borough Department of Building, Housing & Codes Enforcement:

1. Completed STR license application
2. Proof of zoning compliance
3. Floor plan of the rental unit
4. Site plan of the property showing parking arrangements
5. Proof of liability insurance
6. Local contact information
7. License fee (amount to be determined by Borough Council)

The licensing process typically takes 2-4 weeks from the time a complete application is submitted. The Code Enforcement Officer will schedule an inspection of the property, and if all requirements are met, the license will be issued.

It's important to note that operating an STR without a valid license may result in fines and penalties. The specific fines for non-compliance are yet to be determined by the Borough Council.

As the STR ordinance is still in the draft stage, property owners should monitor the West Chester Borough website for updates and attend Borough Council meetings to provide input on the proposed regulations. By working together, the Borough and STR owners can create a fair and effective licensing system that balances the needs of all stakeholders.

Required Documents for West Chester Short-Term Rentals

To legally operate a short-term rental in West Chester, property owners must obtain a permit from the Borough. The following documents are required as part of the permit application process, according to the proposed Short-Term Rental Ordinance:

1. Completed STR Permit Application: This application form, available from the West Chester Borough Department of Building, Housing & Codes Enforcement, collects essential information about the property owner, the rental unit, and the local contact person.
2. Proof of Zoning Compliance: The property owner must demonstrate that the STR is located in a zoning district that allows short-term rentals, specifically the Town Center district.
3. Floor Plan of the Rental Unit: A detailed floor plan helps the Borough verify that the STR meets occupancy limits and other requirements.
4. Site Plan of the Property: The site plan should show the location of the rental unit and the required off-street parking space(s).
5. Proof of Liability Insurance: The property owner must maintain general liability insurance coverage for the STR in the minimum amount of $1,000,000 and provide evidence of this insurance prior to the issuance of the rental permit.
6. Local Contact Information: The name and contact details of a local person who can respond to any issues or complaints within 30 minutes must be provided.
7. Permit Fee: A fee, the amount of which is to be determined by the Borough Council, must be paid to cover the costs of administering the STR permit program.

These documents serve to ensure that STRs in West Chester meet specific requirements related to zoning, occupancy, parking, insurance, and local responsiveness. By collecting and reviewing this information, the Borough can effectively regulate short-term rentals to protect public health, safety, and welfare while allowing this increasingly popular use in appropriate areas.

Property owners should submit the required documents and fee to the West Chester Borough Department of Building, Housing & Codes Enforcement. The permit application process typically takes 2-4 weeks, and the Code Enforcement Officer will schedule an inspection of the property to verify compliance with all requirements before issuing the permit.

It's important to note that operating an STR without a valid permit may result in fines and penalties. As the proposed ordinance is still under consideration, property owners should monitor the West Chester Borough website for updates and attend Borough Council meetings to provide input on the final regulations.

West Chester Short-Term Rental Taxes

When operating a short-term rental business in West Chester, it's crucial to understand the various taxes that apply and their respective rates. Failing to comply with these tax obligations can result in penalties and legal issues.

According to the Chester County Treasurer's website, the following taxes apply to short-term rentals in West Chester:

Chester County Hotel Tax: Short-term rentals in West Chester are subject to a 5% County Hotel Tax on the listing price, including any cleaning fees, for reservations of 30 nights or less. This tax is collected by the Chester County Treasurer's Office.

Pennsylvania Hotel Occupancy Tax: In addition to the County Hotel Tax, short-term rentals in West Chester are also subject to the statewide Pennsylvania Hotel Occupancy Tax of 6%. This tax applies to stays of less than 30 consecutive days and is remitted to the Pennsylvania Department of Revenue.

Combined, these taxes add up to a total of 11% in taxes that must be collected from guests and remitted to the appropriate authorities.

It's important to note that while platforms like Airbnb and Vrbo may collect and remit these taxes on behalf of hosts in some jurisdictions, it's ultimately the responsibility of the short-term rental operator to ensure compliance with all applicable tax laws.

Possible Write-Offs and Deductions

To offset some of the tax burden, short-term rental operators in West Chester may be able to take advantage of certain write-offs and deductions. These can include:

1. Mortgage interest and property taxes (apportioned for the rental use)
2. Cleaning and maintenance expenses
3. Utilities
4. Insurance
5. Supplies and amenities provided to guests
6. Depreciation of the rental property and any assets used in the rental business
7. Guest-service or host-service fees charged by platforms like Airbnb or Vrbo

It's crucial to keep detailed records of all expenses related to the short-term rental business and to consult with a tax professional to ensure you're taking advantage of all available deductions and complying with all tax laws.

By understanding the applicable taxes and potential deductions, short-term rental operators in West Chester can better manage their finances and run a successful, compliant business.

Pennsylvania Wide Short-Term Rental Rules

While there are no comprehensive statewide laws specifically regulating short-term rentals in Pennsylvania, there are a few state-level requirements that affect Chester County hosts.

Hotel Occupancy Tax

Under Pennsylvania law, anyone who rents out their property for less than 30 days to the same person must collect and remit the Pennsylvania Hotel Occupancy Tax. The tax rate is 6%, the same as the state sales tax. In addition, Chester County imposes a 5% Hotel Room Rental Tax on the listing price, including cleaning fees, for reservations of 30 nights or less. Combined, these taxes add up to a total of 11% that must be collected from guests and remitted to the appropriate authorities.

Some home-sharing websites or third-party brokers, such as Airbnb, voluntarily collect and remit these taxes on behalf of hosts. However, it's ultimately the responsibility of the short-term rental operator to ensure compliance with all applicable tax laws.

Registering to Collect Taxes

If a short-term rental host in Chester County does not exclusively use a third-party booking site that collects and remits hotel occupancy taxes, the host is required to register with the Pennsylvania Department of Revenue for a Sales, Use, and Hotel Occupancy Tax License. This can be done by completing the Pennsylvania Online Business Tax registration process at mypath.pa.gov.

After registering and obtaining a license and account number, hosts must file returns and remit the tax electronically using myPATH, the department's online system.

Reporting Rental Income

Income from short-term rentals in Pennsylvania should be reported on the Pennsylvania Personal Income Tax Schedule C – Profit or Loss from Business or Profession. Income from property rentals for 30 days or more, which are not subject to the hotel occupancy tax, should be reported using Schedules E, Rents and Royalty Income (Loss).

While these state-level requirements apply to short-term rental hosts in Chester County, it's important to note that most of the regulations governing this relatively new use are determined at the municipal level. Chester County hosts should familiarize themselves with the specific ordinances and permit requirements in their municipality to ensure full compliance with all applicable laws and regulations.

Does West Chester Strictly Enforce STR Rules?

Based on discussions in real estate forums like BiggerPockets and local news reports, it appears that West Chester has not consistently enforced its short-term rental rules in the past. Despite the Borough Code prohibiting STRs, many hosts have been operating Airbnbs and other vacation rentals without facing significant consequences.

Building and Housing Director Kevin Gore admitted that there are "several [STRs] in town," suggesting that the Borough has not been proactively shutting down all unauthorized rentals. In fact, according to Dr. Krupa Daniel, a local STR owner who has been fighting the Borough's cease and desist order, the Borough has only pursued the closure of four STRs since 2019.

Compared to other cities that have taken a more aggressive stance against STRs, West Chester seems to be relatively Airbnb-friendly. The fact that many hosts continue to operate despite the current rules indicates a lack of strict enforcement.

However, with the proposed ordinance that would allow STRs in the Town Center district under certain conditions, the Borough may start cracking down on rentals outside of this designated area. The new ordinance could provide a clearer framework for enforcement, making it easier for the Borough to identify and penalize non-compliant STRs.

Despite this potential shift, it's likely that some hosts will continue to operate under the radar, especially those who have successfully done so in the past. The Borough's history of inconsistent enforcement may embolden certain hosts to take their chances, particularly if they believe the benefits outweigh the risks.

In conclusion, while West Chester's official stance on STRs has been prohibitive, the reality on the ground suggests a more lenient approach. The proposed ordinance may change this dynamic, but it remains to be seen how strictly the new rules will be enforced and whether hosts will continue to operate despite them.

How to Start a Short-Term Rental Business in West Chester

Starting a short-term rental business in West Chester can be a rewarding venture, but it's important to follow the proper steps to ensure compliance with local regulations and set yourself up for success. Here's a step-by-step guide to getting started:

1. Understand the local regulations: Before investing in a short-term rental property, familiarize yourself with West Chester's zoning laws and the proposed Short-Term Rental Ordinance. The new ordinance, if passed, would allow short-term rentals only in the Town Center district and require a conditional use permit from the Borough Council. Attend Borough Council meetings and engage with local officials to stay informed about the evolving regulations and provide input on the proposed ordinance.
2. Choose the right property: Look for a property that meets the zoning requirements and has the potential to attract your target guests. Consider factors like location, size, amenities, and parking when making your selection. If you already own a property in West Chester, evaluate whether it's suitable for use as a short-term rental under the current and proposed regulations.
3. Develop a business plan: Create a comprehensive business plan that outlines your target market, pricing strategy, marketing approach, financial projections, and operational details. This will serve as a roadmap for your business and help you secure financing if needed. Research the local short-term rental market to identify trends, competitors, and potential opportunities for differentiation.
4. Obtain necessary licenses and permits: Once the Short-Term Rental Ordinance is finalized, apply for the required licenses and permits from the Borough of West Chester. This may include a conditional use permit, rental license, and any other required documentation. Work closely with the Borough's Department of Building, Housing & Codes Enforcement to ensure you're meeting all the requirements and submitting the necessary paperwork.
5. Prepare your property for guests: Invest in quality furnishings, linens, and amenities to create a welcoming and comfortable space for your guests. Ensure the property is clean, well-maintained, and meets all safety standards. Consider hiring a professional photographer to capture high-quality images of your property for your listing, as this can significantly impact your booking rates.
6. Create a compelling listing: Develop an engaging and informative listing on popular short-term rental platforms like Airbnb and VRBO. Highlight your property's unique features, amenities, and location to attract potential guests. Be transparent about your property's rules, restrictions, and any additional fees to set clear expectations and avoid misunderstandings with guests.
7. Implement a pricing strategy: Set competitive rates for your short-term rental based on factors like seasonality, demand, and comparable properties in the area. Consider using dynamic pricing tools to optimize your revenue. Offer special promotions or discounts during slower periods to maintain a steady stream of bookings throughout the year.
8. Establish efficient operations: Develop systems and processes for managing bookings, communicating with guests, handling check-ins and check-outs, and coordinating cleaning and maintenance. Consider partnering with a reputable property management company like DoCo Vacations to streamline your operations and ensure a seamless experience for your guests.

By following these steps and staying informed about local regulations, you can successfully launch and operate a short-term rental business in West Chester. Remember to prioritize guest satisfaction, maintain open communication with the Borough, and continually adapt to changes in the market to ensure long-term success.

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

If you have questions or concerns about short-term rental regulations and zoning in West Chester, the best place to start is the Borough's Department of Building, Housing & Codes Enforcement. This department is responsible for enforcing the Borough Code and the Pennsylvania Uniform Construction Code, which includes reviewing and issuing permits, zoning approvals, and rental property regulations.

You can contact the Department of Building, Housing & Codes Enforcement using the following information:

1. Address: 401 East Gay Street, West Chester, PA 19380
2. Phone: 610-692-7574
3. Fax: 610-436-0009
4. Website: https://west-chester.com/131/Building-Housing-Code-Enforcement

The department's staff can provide guidance on the current and proposed regulations for short-term rentals in West Chester, including the draft Short-Term Rental Ordinance that would allow STRs in the Town Center district under certain conditions.

In addition to contacting the Borough directly, there are several online communities where short-term rental hosts in West Chester and the surrounding area can connect, share experiences, and seek advice:

1. BiggerPockets Forums: The BiggerPockets website has a dedicated forum for short-term rental discussions, including a thread specifically about potential STRs in West Chester. You can join the conversation and ask questions at https://www.biggerpockets.com/forums/530/topics/1124484-potential-short-term-rental-in-west-chester-pa.
2. Chester County Subreddit: The Chester County subreddit on Reddit is a general forum for discussing topics related to the county, including real estate and short-term rentals. While not exclusively focused on STRs, it can be a useful resource for connecting with local residents and getting a sense of the community's perspective on the issue. Visit https://www.reddit.com/r/ChesterCounty/ to explore the subreddit.
3. Chester County Short-Term Rental Hosts Facebook Group: Although not an official group, it may be worth searching for or creating a Facebook group specifically for short-term rental hosts in Chester County. This can provide a platform for local hosts to share experiences, ask questions, and stay up-to-date on regulatory changes.

By engaging with these online communities and staying in touch with the Borough's Department of Building, Housing & Codes Enforcement, short-term rental hosts in West Chester can navigate the evolving regulatory landscape and ensure compliance with all applicable laws and ordinances.

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

To gauge the sentiment of short-term rental hosts in West Chester regarding local regulations, we turned to popular online forums like Reddit and BiggerPockets. Here are some relevant experiences, questions, and comments from verified West Chester threads:

1. Potential Short-term rental in West Chester PA (BiggerPockets Forum): In this thread, a user inquires about the viability of operating a short-term rental in their West Chester townhouse. While no specific experiences with regulations are shared, the post indicates an interest in understanding the local STR landscape.
2. Short Term Rental Legal Help- Chester County PA (BiggerPockets Forum): This post by a Chester County host seeks recommendations for a real estate lawyer and resources to help fight against local townships' restrictions on short-term rentals. The host also asks if anyone has successfully navigated similar challenges, suggesting a desire to push back against perceived overregulation.

While these forum discussions don't provide detailed accounts of hosts' experiences with West Chester's specific regulations, they do indicate a general concern among local STR operators about the impact of municipal rules on their businesses. Hosts appear to be seeking guidance on compliance and, in some cases, ways to challenge or influence the regulatory landscape.

It's worth noting that the proposed Short-Term Rental Ordinance in West Chester, which would allow STRs in the Town Center district under certain conditions, is still under consideration. As such, hosts' opinions and experiences may evolve as the regulatory framework takes shape.

To gain a more comprehensive understanding of West Chester hosts' perspectives, it would be beneficial to continue monitoring relevant forums and engage directly with local STR operators. Attending Borough Council meetings where the proposed ordinance is discussed could also provide valuable insights into the concerns and priorities of both hosts and the wider community.

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