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

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

Pennsylvania has a patchwork of state, county, and city-specific regulations governing short-term rentals (STRs) through platforms like Airbnb and VRBO. While there are no state-wide laws specifically targeting STRs, hosts must navigate a complex web of local zoning restrictions, permit requirements, occupancy limits, and tax obligations.

Starting a Short-Term Rental Business in Pennsylvania

To legally operate an STR in Pennsylvania, hosts generally need to:

• Obtain a business license or permit from their local municipality
• Register with the county and/or state for tax purposes
• Collect and remit applicable lodging taxes
• Comply with zoning restrictions on STR use
• Meet safety and occupancy requirements

The specific steps vary widely depending on the location. For example:

1. In Philadelphia, hosts need a Commercial Activity License, Zoning Permit, and either a Limited Lodging Operator License (for owner-occupied rentals) or Rental License with hotel designation (for non-owner-occupied)
2. The Poconos region requires each individual rental unit to have its own license, renewed annually
3. Easton mandates annual inspections for safety and code compliance

These are just a few examples of the Airbnb regulations within the state of Pennsylvania.

Short-Term Rental Licensing Requirements in Pennsylvania

Pennsylvania's short-term rental (STR) licensing requirements vary by municipality, with each city and county having its own specific regulations. Here are the licensing procedures for some major STR markets in the state, based on information from official government websites:

Philadelphia:

1. Obtain a Commercial Activity License
2. Get a Zoning Permit for either limited lodging use (owner-occupied) or visitor accommodation use (non-owner-occupied)
3. For limited lodging, apply for a Limited Lodging Operator License; for visitor accommodations, get a Rental License with hotel designation
4. Limited lodging STRs must meet certain housing safety requirements (smoke alarms, CO alarms, occupancy limits) and provide required information to guests
5. Pay the 8.5% Philadelphia Hotel Tax monthly
6. Submit applications online or in-person at the Permit and License Center; license fees vary based on type
7. Penalties for unlicensed STRs include fines and cease-and-desist orders

Lancaster:

1. STRs permitted in certain zoning districts (RO, MU, CB1, CB, C1, C2) with conditions like parking requirements
2. Register STR with the city as a "Transient Dwelling" rental unit, schedule inspection
3. Provide property manager contact info to city Housing Unit
4. Limit stays to 30 days per party, 2 adults per bedroom max
5. No signage allowed
6. Apply for Certificate of Zoning Compliance and city rental license
7. Units in unpermitted zones require a variance from the Zoning Hearing Board

Gettysburg:

1. Obtain Land Use Permit and Certificate of Use & Occupancy
2. For homestays (owner-occupied), get Homestay Residency Certification
3. Vacation rentals (non-owner-occupied) only allowed in certain zones with approval

Mount Pocono:

1. Each STR unit needs its own license, issued to owner, renewed annually
2. STRs only permitted in designated zones per zoning code
3. Minimum lot size of 0.5 acres per unit
4. Designate local contact person available 24/7

The licensing process typically takes several weeks to a few months, depending on the city and completeness of the application. Fees range from around $200-500 annually. Operating without a valid license risks significant financial penalties and being shut down by local authorities.

To ensure compliance, prospective STR hosts in Pennsylvania should carefully review their local government's specific requirements, submit all required documentation and fees, and renew licenses annually. Consulting with a local lawyer well-versed in STR regulations is also advisable.

Required Documents for Pennsylvania Short-Term Rentals

To legally operate a short-term rental (STR) in Pennsylvania, hosts must submit various documents to their local municipality and county. While the specific requirements vary by location, here are some commonly required items:

Short-Term Rental Permit Application: Fill out the STR permit application form provided by your local city or township. This collects key information about the property, owner, and local contact person. It must be completed in full and signed by the owner.

Proof of Ownership: Provide a copy of the recorded property deed to verify ownership. If the property is owned by an LLC or other entity, submit formation documents showing the owner's relationship to the entity.

Floor Plan: Include a sketch or diagram of the rental unit's floor plan, indicating the number and location of bedrooms and the maximum occupancy. This helps verify compliance with occupancy limits and building codes.

Parking Plan: Submit a site plan or photograph showing the number and location of on-site parking spaces for guests. Sufficient off-street parking must be provided to minimize impacts on neighbors.

Septic System Certification (if applicable): For properties not on public sewer, provide a current septic system evaluation certifying proper function and a receipt showing the tank was pumped within the last 3 years. This must be approved by the local health department.

Liability Insurance: Proof of liability insurance coverage of at least $500,000 is often required. The insurance policy must cover short-term rental use of the property.

Signed Affidavit: The owner must sign an affidavit certifying that the information provided is true and agreeing to abide by all short-term rental regulations.

County Hotel Tax Certificate: Register with your county treasurer's office and obtain a certificate or permit to collect and remit the hotel occupancy tax on short-term stays. For example, Bucks County requires STRs to obtain a Lodging Room Rental Tax Certificate of Authorization.

Pennsylvania Sales Tax License: Register with the state Department of Revenue and obtain a Sales, Use and Hotel Occupancy Tax License in order to collect and pay the statewide 6% hotel tax.

Some cities have additional requirements. For example:

1. In Gettysburg, homestays (owner-occupied STRs) must submit a Homestay Residency Certification form.
2. Philadelphia STRs need a Commercial Activity License and either a Limited Lodging Operator License (for limited lodging/primary residences) or Hotel Rental License (for non-owner occupied).

These documents, along with the permit application and fee, are typically submitted to the municipal zoning office or other designated department. The review and approval process can take several weeks to a few months. Once issued, the STR permit must be prominently displayed inside the rental unit.

Pennsylvania Short-Term Rental Taxes

Short-term rental owners in Pennsylvania must collect and remit several state and local taxes. Understanding these obligations is critical for compliance and profitability. Here are the key taxes that apply:

Pennsylvania Hotel Occupancy Tax (6%): The state levies a 6% hotel occupancy tax on all stays shorter than 30 days, the same rate as the state sales tax. This tax applies to the total rental amount, including cleaning fees and other charges. Owners must register for a Sales, Use and Hotel Occupancy Tax License and file returns electronically through the myPATH system.

Local Hotel Occupancy Tax (1-8.5%): Some counties and cities charge additional local hotel taxes on top of the state tax. For example:

1. Allegheny and Philadelphia counties collect an extra 1% tax, remitted to the state
2. Bucks County assesses a 5% hotel tax to fund tourism promotion, remitted to the county
3. Easton imposes a 4% hotel room rental tax for Northampton County
4. Gettysburg charges a 5% hotel room rental tax for Adams County
5. Philadelphia has an 8.5% hotel tax

Check with your county and municipal tax offices for the local hotel tax rates and filing requirements in your area.

Possible Deductions and Write-Offs

Short-term rentals often have significant expenses that can be deducted to reduce taxable income. Some common tax deductions include:

1. Mortgage interest
2. Property taxes
3. Cleaning fees and supplies
4. Property management fees
5. Booking commissions
6. Repairs and maintenance
7. Utilities
8. Insurance premiums
9. Depreciation of property and furnishings

Carefully tracking and documenting these rental expenses is essential for maximizing deductions. The IRS requires STR owners to allocate costs between rental and personal use based on the number of days rented.

Owners who materially participate in their STR business may be able to deduct losses against other income, but passive loss rules apply. Depreciation strategies like cost segregation can provide major deductions, but STRs are depreciated over a longer 39-year period than long-term rentals.

Consulting a tax professional is highly recommended to optimize your STR tax strategy and ensure proper reporting of rental income and expenses on Schedule C or E. With proactive planning, hosts can minimize taxes and enhance the profitability of their Pennsylvania short-term rental business.

Does Pennsylvania Strictly Enforce STR Rules? Is Pennsylvania Airbnb Friendly?

Based on discussions among hosts on platforms like BiggerPockets and Reddit, Pennsylvania's approach to short-term rental enforcement varies significantly by location, with some areas being much stricter than others.

Bucks County is frequently cited as one of the least "Airbnb friendly" markets in the state. Hosts report receiving cease-and-desist letters and facing proactive crackdowns on non-compliant rentals, often driven by neighbor complaints. Townships like Buckingham and Tinicum are tightening zoning laws to explicitly restrict STRs in residential areas.

In contrast, hosts describe cities like Reading as having a more balanced approach. While Reading has STR licensing and regulations, the city is not overly aggressive in enforcement compared to other jurisdictions. Hosts generally consider Reading Airbnb friendly, though periodic inspections and fines for violations do occur.

Philadelphia is ramping up enforcement of its new STR ordinances in 2023. The city now requires STRs to have a Commercial Activity License, Limited Lodging Operator License (for owner-occupied) or Hotel Rental License (for non-owner-occupied), and a zoning permit. Unlicensed rentals face potential fines and shutdown by city officials.

Despite the regulatory risks, some Pennsylvania hosts admit to operating STRs without licenses or in violation of local rules. On Reddit and BiggerPockets, hosts discuss strategies like booking longer stays to avoid detection. However, most experienced hosts caution that operating in this "gray area" is not advisable given rising enforcement.

Overall, Pennsylvania is a mixed bag for Airbnb friendliness. While some counties like Bucks are cracking down hard, others are more permissive as long as hosts are licensed and compliant. The key is carefully researching the specific STR ordinances in your local jurisdiction. Consulting with an attorney and local officials is the best way for hosts to understand their obligations and risks in the evolving Pennsylvania STR landscape.

How to Start a Short-Term Rental Business in Pennsylvania

Starting a successful short-term rental business in Pennsylvania requires careful planning, due diligence, and compliance with local regulations. Here are the key steps to get started:

• Research local STR regulations: Thoroughly review your city and county's specific STR ordinances, zoning restrictions, permit requirements, and tax obligations. Consult with local officials and a knowledgeable attorney to understand what is allowed in your area.
• Evaluate potential properties: Identify properties that meet your investment criteria and local STR regulations. Consider factors like location, amenities, occupancy limits, parking, and safety requirements. Analyze the local STR market to ensure sufficient demand and pricing potential.
• Develop a business plan: Create a comprehensive business plan that outlines your investment strategy, target market, pricing, marketing approach, and financial projections. Set clear goals and metrics to measure success.
• Secure financing: Determine how much capital you need to acquire and renovate the property. Explore financing options like mortgages, home equity loans, or partnerships. Make sure you have sufficient reserves to cover startup costs and initial operating expenses.
• Purchase and renovate the property: Once you have identified a suitable property and secured financing, proceed with the acquisition. Renovate the property to meet STR safety standards and create an attractive space for guests. Consider hiring a professional designer to optimize the layout and decor.
• Obtain necessary licenses and permits: Apply for all required STR licenses, permits, and tax certificates from your local municipality and county. This may include a business license, zoning permit, occupancy license, and hotel tax registration. Allow ample time for the approval process.
• Implement a property management system: Choose a reliable property management system to automate bookings, guest communication, and cleaning coordination. Popular options include Guesty, Hostfully, and iGMS. Set up a system for key exchange, such as lockboxes or smart locks.
• Create a compelling listing: Craft an enticing Airbnb or VRBO listing with professional photos, detailed descriptions, and competitive pricing. Highlight unique selling points like local attractions, amenities, and guest reviews. Optimize your listing for search rankings and bookings.
• Develop a guest experience strategy: Create a seamless and memorable guest experience from booking to check-out. Provide detailed check-in instructions, local recommendations, and thoughtful amenities. Be responsive to guest inquiries and proactively address any issues that arise.
• Launch and monitor your STR business: Once your property is ready and listed, launch your STR business. Closely monitor bookings, revenue, and expenses. Solicit guest reviews and continuously improve your offering based on feedback. Stay up to date with local regulations and adapt your business as needed.

Some additional tips for success:

• Partner with experienced STR operators or property managers for guidance and support
• Invest in high-quality furnishings, linens, and amenities to differentiate your rental
• Implement dynamic pricing to optimize revenue based on demand and seasonality
• Develop a robust cleaning and maintenance process to ensure consistently high standards
• Consider offering additional services like airport transportation or local tours to increase revenue
• Network with other local STR owners to share best practices and stay informed of regulatory changes

By following these steps and continuously refining your approach, you can build a thriving short-term rental business in Pennsylvania.

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

For questions about short-term rental regulations and zoning in Pennsylvania, here are some key contacts and resources:

Pennsylvania Department of Community and Economic Development

The DCED provides guidance and support to local governments on land use, zoning, and economic development issues. Contact them for general questions about state-level STR policies.

• Phone: (866) 466-3972
• Email: ra-dcedcs@pa.gov
• Address: Commonwealth Keystone Building, 400 North Street, 4th Floor, Harrisburg, PA 17120-0225

Pennsylvania Association of Zoning Officials (PAAZO)

PAAZO is a non-profit organization that provides training and resources for zoning officers, planning commissions, and zoning hearing boards across the state. Their website has a directory of member municipalities and contact information for local zoning officials.

• Phone: (717) 236-9526
• Email: info@paazo.org
• Website: https://paazo.org/

County and Municipal Zoning Offices

Since most STR regulations are determined at the local level in Pennsylvania, it's critical to contact your county and city/township zoning department for the most accurate information. Some key contacts in major STR markets include:

• Philadelphia Department of Licenses & Inspections (215-686-2463)
• Bucks County Planning Commission (215-345-3400)
• Pocono Mountains Visitors Bureau (570-421-5791)

Pennsylvania Host Community Groups

Connecting with other local STR hosts is a great way to get insights and advice on navigating regulations. Some active online communities include:

• Pocono Mountains Vacation Rental Owners - Facebook group with 1.4K members
• Pennsylvania Airbnb Hosts - Facebook group with 1.1K members
• Airbnb Hosting Forum for Pennsylvania - BiggerPockets subforum for PA hosts
• /r/AirBnB - Reddit community with PA-specific discussions

By engaging with these state and local government contacts, as well as experienced hosts in the Pennsylvania STR community, you can get the most current and comprehensive information on regulations and set your rental business up for success.

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

Pennsylvania hosts on forums like Reddit and BiggerPockets have mixed views on the state's short-term rental regulations, with experiences varying significantly by city and county. Here are some insights from local hosts:

Philadelphia Regulations Spark Debate

A thread on the Philadelphia subreddit discussing the city's new Airbnb rules garnered over 100 comments, with hosts expressing frustration about the restrictions. One host commented:

"This legislation is great! It tells RCO's to get fucked, goes after nuisance properties who blight neighbors. It forces properties to comply with L&I safety regulations for use, has real permit requirements to reflect that these are businesses not mom and pop shops most of the time, and moves it all above board for registration and tax collection. It also has real consequences for failure to comply, that's just absolutely amazing."

However, others argued that the rules, which limit STRs to primary residences for 180 days per year, will effectively kill the Airbnb market in the city. As one host lamented, "There goes my $2000 a week rental."

Pocono Hosts Navigate a Patchwork of Rules

In the Pocono Mountains region, hosts on the Pocono Mountains Vacation Rental Owners Facebook group (1.4K members) often discuss the challenges of dealing with varying township regulations. One host shared:

"I'm looking into STR in Poconos and most townships do not allow STR but some of the ones that do, do not allow Residential properties. Are there any ways around this?"

Responses highlighted the importance of carefully researching township zoning rules and working closely with local officials.

Reading Balances Regulation and Friendliness

A blogger on BNBCalc described Reading as relatively "Airbnb friendly" compared to other Pennsylvania cities. While Reading does require STR licenses and periodic inspections, hosts on BiggerPockets generally report that compliance is manageable:

"Overall, demand for short term rentals in Reading is healthy, and the regulatory environment is not overly restrictive like you'll find in some other Pennsylvania cities. The consensus among Reading hosts is that the city strikes a good balance between necessary oversight and allowing STRs to operate."

The takeaway for Pennsylvania hosts is that local regulations vary widely and can significantly impact STR operations. Carefully researching and complying with city- and county-specific rules is essential to running a successful and sustainable Airbnb business in the state.

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 area 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.