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

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

Short-term rentals, such as those listed on platforms like Airbnb and VRBO, have become increasingly popular in Lancaster County, Pennsylvania. However, property owners looking to start a short-term rental business must navigate a variety of local regulations and ordinances. Here's an overview of the short-term rental landscape in Lancaster County.

Starting a Short-Term Rental Business in Lancaster County, Pennsylvania

To legally operate a short-term rental in Lancaster County, property owners must comply with the specific regulations of their municipality. Many townships and boroughs have adopted ordinances governing short-term rentals in recent years.

For example, in November 2022, Lancaster Township considered enacting Ordinance 2022-02, which adds definitions, criteria, and performance regulations for short-term rental units. The ordinance adds "Bed and Breakfast" to the short-term rental use category and establishes specific requirements for these properties.

At the county level, the Lancaster County Board of Supervisors adopted ordinances in September 2018 requiring all short-term rental properties to register annually, pay a $50 fee, and remit a 2% occupancy tax monthly on lodging revenues. This ensures that the county captures its share of the growing short-term rental market.

The City of Lancaster has also updated its zoning code to allow more short-term rentals in business-friendly areas. In May 2023, the City Council approved changes permitting buildings with ground-floor storefronts and one or two upstairs apartments to rent those units as short-term rentals. However, the city has banned further spread of short-term rentals in residential areas.

Property owners interested in operating a short-term rental in Lancaster City must obtain a Certificate of Zoning Compliance and a city-issued rental license. The specific requirements and application process vary depending on the property's zoning district.

Many other municipalities throughout Lancaster County, such as Manheim Borough, Paradise Township, and West Earl Township, have also adopted short-term rental regulations in recent years. Property owners should consult their local zoning and planning offices to understand the specific requirements in their area.

In summary, starting a short-term rental business in Lancaster County requires careful research and compliance with local regulations. By understanding the specific requirements of their municipality and obtaining the necessary permits and licenses, property owners can successfully navigate the short-term rental landscape in this popular Pennsylvania destination.

Short-Term Rental Licensing Requirement in Lancaster County

To legally operate a short-term rental in Lancaster County, Pennsylvania, property owners must comply with the county's registration and occupancy tax requirements, as well as any additional regulations set by their specific municipality.

According to the Lancaster County website, the Board of Supervisors adopted ordinances on September 27, 2018, requiring all short-term rental properties to:

1. Register annually and pay a $50 annual fee

2. Pay a 2% Occupancy Tax monthly on lodging revenues received

3. To register a short-term rental, owners must submit the following to the Lancaster County Commissioner's Office:

• Completed Short-Term Rental Registration Form
• $50 annual registration fee (checks made payable to the Lancaster County Treasurer)
• Copy of the owner's driver's license or government-issued ID
• Proof of liability insurance for the rental property
• Copy of the property's current deed

If applicable, a copy of the owner's articles of incorporation or operating agreement

The registration process typically takes 2-4 weeks from the time all required documents and fees are submitted. Once approved, the county will issue a Short-Term Rental Registration Certificate, which must be prominently displayed inside the rental unit.

Failure to register a short-term rental or pay the required occupancy taxes can result in fines and penalties. The county may impose a fine of up to $500 per day for each day the property is rented without a valid registration. Delinquent occupancy taxes are subject to a 10% penalty and 1% monthly interest charge.

In addition to the county requirements, short-term rental owners must also adhere to any regulations set by their local municipality. For example, Lancaster Township recently considered enacting Ordinance 2022-02, which adds definitions, criteria, and performance regulations for short-term rental units, including bed and breakfasts.

Property owners should contact their local zoning and planning offices to understand the specific short-term rental requirements in their area, as they may need to obtain additional permits or licenses and pay associated fees.

By complying with both county and municipal regulations, obtaining the necessary registrations and licenses, and staying current on occupancy taxes, property owners can legally operate short-term rentals in Lancaster County while avoiding costly fines and penalties.

Required Documents for Lancaster County Short-Term Rentals

To legally operate a short-term rental in Lancaster County, Pennsylvania, property owners must submit the following documents to the Lancaster County Commissioner's Office:

1. Completed Short-Term Rental Registration Form: This form is a fundamental step in the registration process and ensures that the property meets the county's established standards. The form can be obtained from the Lancaster County website or the Commissioner's Office.
2. $50 Annual Registration Fee: Checks should be made payable to the Lancaster County Treasurer. This fee covers the administrative costs of the STR registration program.
3. Copy of the Owner's Driver's License or Government-Issued ID: This document verifies the identity of the property owner and ensures they are legally permitted to operate an STR in Lancaster County.
4. Proof of Liability Insurance for the Rental Property: STR owners must provide evidence of sufficient liability coverage to protect guests and the property itself. The minimum coverage amount may be specified by the county.
5. Copy of the Property's Current Deed: This document proves ownership of the STR property and helps the county maintain accurate records of all registered STRs.
6. Articles of Incorporation or Operating Agreement (if applicable): If the STR is owned by a business entity, such as an LLC or corporation, the owner must provide a copy of the entity's formation documents.

In addition to these county-level requirements, STR owners must also comply with any regulations set by their local municipality. For example, Lancaster Township recently considered enacting Ordinance 2022-02, which adds definitions, criteria, and performance regulations for STRs, including bed and breakfasts.

Local requirements may include obtaining a Certificate of Zoning Compliance and a city-issued rental license, which involve submitting additional documents and fees. Property owners should contact their local zoning and planning offices to understand the specific STR requirements in their area.

By submitting the required documents and complying with both county and municipal regulations, property owners can legally operate short-term rentals in Lancaster County while avoiding potential fines and penalties.

Lancaster County Short-Term Rental Taxes

In addition to the annual registration fee, short-term rental owners in Lancaster County must also pay various taxes on their rental income. Understanding these tax obligations is crucial for operating a compliant and profitable rental business.

According to the Lancaster County Treasurer's Office, short-term rentals are subject to the following taxes:

1. Excise Tax (1.1%): All short-term rentals in Lancaster County must pay a 1.1% excise tax on their gross monthly revenue. This tax is imposed by the county and is in addition to the room rental tax.
2. Room Rental Tax (3.9%): Most short-term rentals in Lancaster County are required to pay a 3.9% room rental tax on their gross monthly revenue. However, this tax does not apply to establishments that qualify as a "Bed and Breakfast Homestead or Inn" as defined by Pennsylvania law.

These taxes are due on or before the 25th day of each month for the preceding month's revenue. Late payments may be subject to penalties and interest charges.

To register for these taxes, short-term rental owners must complete the Hotel Tax Registration Form and submit it to the Lancaster County Treasurer's Office. The registration process ensures that the county has accurate records of all short-term rentals operating within its jurisdiction.

Possible Write-Offs and Deductions

While short-term rental owners must pay various taxes, they may also be eligible for certain write-offs and deductions that can help reduce their overall tax liability. Some common deductions include:

1. Mortgage interest
2. Property taxes
3. Depreciation of the rental property and furnishings
4. Repairs and maintenance costs
5. Utilities and insurance
6. Cleaning and supply expenses
7. Advertising and marketing costs
8. Property management fees
9. Platform service fees (e.g., Airbnb, VRBO)

To claim these deductions, short-term rental owners must keep accurate records of their income and expenses throughout the year. Using accounting software like Stessa can help automate this process and ensure that all eligible deductions are captured.

It's important to note that if a short-term rental is also used for personal purposes, owners must allocate expenses between rental and personal use based on the number of days the property was rented versus used personally.

By understanding their tax obligations and taking advantage of available deductions, short-term rental owners in Lancaster County can optimize their profitability while remaining compliant with local regulations. Consulting with a tax professional can provide additional guidance on navigating the complex world of short-term rental taxation.

Pennsylvania Wide Short-Term Rental Rules

While most short-term rental regulations in Pennsylvania are set at the county and municipal levels, there are a few state-wide rules that affect Lancaster County hosts.

In terms of taxes, the Pennsylvania Department of Revenue requires short-term rental owners to collect and remit the state's 6% Hotel Occupancy Tax on all rentals of rooms, apartments, and houses arranged through online or third-party brokers. This tax is in addition to any local taxes imposed by Lancaster County or its municipalities.

At the state legislative level, there have been recent efforts to study and potentially regulate the growth of short-term rentals in Pennsylvania. In 2023, House Resolution 425 was introduced, directing the Joint State Government Commission to conduct a study on the changes and impacts of short-term rentals operating in the Commonwealth. While this resolution has not yet resulted in any new state-wide laws, it demonstrates a growing interest in understanding and managing the short-term rental industry at the state level.

Despite the lack of comprehensive state-wide regulations, it's important to note that short-term rental owners in Pennsylvania must still comply with various other state laws related to property ownership, landlord-tenant relationships, and business operations. These may include building codes, fire safety requirements, and fair housing laws.

Additionally, while Pennsylvania does not have any state-specific laws governing booking platforms like Airbnb, these companies may impose their own rules and standards on hosts using their services. For example, Airbnb requires all hosts to follow local regulations and obtain necessary permits and licenses.

In summary, while most short-term rental regulations in Pennsylvania are handled at the local level, Lancaster County hosts must still be aware of state-wide tax obligations and potential future changes to the regulatory landscape. By staying informed and compliant with all applicable laws and requirements, short-term rental owners can operate successful and legal businesses in Lancaster County and throughout Pennsylvania.

Does Lancaster County Strictly Enforce STR Rules?

Lancaster County has taken steps to regulate short-term rentals in recent years, but the level of enforcement and overall friendliness towards platforms like Airbnb varies across the county.

At the county level, the Board of Supervisors adopted ordinances in September 2018 requiring all STR properties to register annually, pay a $50 fee, and remit a 2% occupancy tax monthly on lodging revenues. However, enforcement of these regulations was postponed until all zoning districts had a chance to establish their own STR rules.

The City of Lancaster, in particular, has been less friendly towards STRs in residential areas. In May 2023, the City Council approved changes allowing more STRs above businesses in commercially-zoned districts but maintained a ban on further spread in residential neighborhoods. Hosts operating in the city must obtain a Certificate of Zoning Compliance and a city-issued rental license.

Despite these regulations, some hosts continue to operate STRs in Lancaster County, even in areas with stricter rules. On the BiggerPockets forums, investor Jason Unrath shared his experience with a successful "rental arbitrage" Airbnb in Lancaster, suggesting that demand for STRs remains strong in the area.

Overall, while Lancaster County has implemented STR regulations, enforcement appears to be somewhat inconsistent across municipalities. The county itself delayed enforcement until zoning districts could establish their own rules, and some hosts continue to operate despite restrictions, particularly in the City of Lancaster.

Compared to other cities and counties in Pennsylvania, Lancaster County falls somewhere in the middle in terms of STR friendliness. While it has not outright banned STRs like some jurisdictions, it has taken steps to regulate and limit their spread, particularly in residential areas.

In conclusion, Lancaster County has a mixed record on STR enforcement and friendliness. While countywide regulations are in place, implementation varies at the municipal level, with the City of Lancaster taking a stricter approach. Nevertheless, demand for STRs persists, and some hosts continue to operate despite the rules, suggesting that Lancaster County remains a viable market for short-term rentals, albeit with some challenges.

How to Start a Short-Term Rental Business in Lancaster County

Starting a short-term rental business in Lancaster County requires careful planning and compliance with local regulations. Here's a step-by-step guide to help you get started:

1. Research local regulations: Familiarize yourself with Lancaster County's STR ordinances, which require annual registration, a $50 fee, and a 2% occupancy tax on lodging revenues. Also, check your specific municipality's zoning and permitting requirements, as rules vary across the county.
2. Choose a property: Select a property that meets local STR regulations and has the potential to attract guests. Consider factors like location, amenities, and proximity to popular attractions. If you don't own a property, explore rental arbitrage opportunities.
3. Register your business: Register your STR with the Lancaster County Commissioner's Office and obtain any necessary permits or licenses from your local municipality. You'll also need to register your business for tax purposes with city, county, or state agencies.
4. Prepare your property: Ensure your property is clean, well-maintained, and equipped with essential amenities. Consider hiring a professional photographer to showcase your rental's best features in your listing.
5. Create a listing: Choose a platform like Airbnb or VRBO to list your property. Craft a compelling description, set competitive rates, and establish house rules and check-in/check-out procedures.
6. Manage your bookings: Use a property management system or booking calendar to keep track of reservations, communicate with guests, and coordinate cleaning and maintenance between stays.
7. Comply with taxes and regulations: Collect and remit the required 2% occupancy tax to Lancaster County monthly. Keep accurate records of your income and expenses for tax purposes, and stay up-to-date with any changes in local STR regulations.
8. Provide excellent guest experience: Ensure your guests have a positive experience by providing clear instructions, prompt communication, and a clean, well-stocked rental. Encourage guests to leave reviews to help attract future bookings.

Tips for success:

1. Study the local STR market to identify demand and set competitive rates
2. Invest in quality furnishings and amenities to make your rental stand out
3. Automate as much of the booking and management process as possible
4. Maintain open communication with guests and address any issues promptly
5. Consider partnering with local businesses to offer unique experiences or discounts to your guests
6. Stay informed about changes in local STR regulations and adapt your business accordingly

By following these steps and prioritizing compliance and guest satisfaction, you can build a successful short-term rental business in Lancaster County.

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

If you have questions or concerns about short-term rental regulations and zoning in Lancaster County, there are several key contacts and resources available:

1. Lancaster County Commissioner's Office: For questions about the county's short-term rental registration and occupancy tax requirements, contact the Commissioner's Office at (717) 299-8300 or visit their website at http://www.lancova.com/page2.asp?ID=62&pageID=104.
2. Lancaster County Planning and Land Use Office: For general questions about zoning and land use regulations in the county, contact the Planning and Land Use Office at (804) 462-5220 or visit their website at http://www.lancova.com/page1.asp?pageID=10.
3. City of Lancaster Zoning Officer: If your short-term rental is located within the City of Lancaster, contact Zoning Officer Jameel Thrash at JaThrash@CityofLancasterPA.com or (717) 291-4736 for questions about the city's specific regulations and requirements. More information can be found on the city's website at https://www.cityoflancasterpa.gov/short-term-rentals/.
4. Lancaster Township Planning & Zoning Department: For short-term rentals located in Lancaster Township, contact the Planning & Zoning Assistant Gretchen Smith at (223) 221-7515 or gretchen@twp.lancaster.pa.us. The township recently proposed an ordinance adding definitions, criteria, and performance regulations for short-term rentals, which can be reviewed at https://www.lancastertownship.org/_T22_R28.php.

In addition to these official contacts, short-term rental hosts in Lancaster County may find support and advice from local groups and online communities:

1. Lancaster County Short-Term Rental Association: This local organization provides resources, advocacy, and networking opportunities for short-term rental hosts in the county. Visit their website at https://lancastercountystra.org/ or join their Facebook group at https://www.facebook.com/groups/lancastercountystra/.
2. Lancaster County Airbnb Hosts Forum: This Facebook group is a platform for Airbnb hosts in Lancaster County to share experiences, ask questions, and stay informed about local regulations and best practices. Join the group at https://www.facebook.com/groups/lancasterairbnbhosts/.
3. BiggerPockets Lancaster County Short-Term Rental Discussion: The BiggerPockets forums include a thread dedicated to discussing short-term rentals in Lancaster County, where hosts can connect with other local investors and share insights. Check out the thread at https://www.biggerpockets.com/forums/530/topics/912345-lancaster-county-pa-short-term-rentals.

By reaching out to these official contacts and engaging with local host communities, short-term rental owners in Lancaster County can stay informed about regulations, zoning requirements, and best practices for operating a successful and compliant rental business.

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.