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

Starting a Short-Term Rental Business in Vermont

Starting a short-term rental business in Vermont requires careful consideration of state and local regulations. Vermont defines a short-term rental as any furnished dwelling unit made available for less than thirty consecutive days. To begin operating legally, hosts must take several important steps:

• Register with the Vermont Department of Taxes: All short-term rental operators must obtain a Vermont meals and rooms tax account number. This number must be included in any advertisements for the rental.
• Obtain necessary permits: Depending on the location, hosts may need to secure specific permits or licenses that comply with local zoning laws. For example, in Killington, short-term rental operators must register their rentals with the Zoning Administrator and renew their applications annually by November 15.
• Meet safety standards: Vermont requires short-term rentals to adhere to state fire safety and life safety codes. This includes installing operable emergency exit windows and functional smoke and carbon monoxide alarms.
• Post required information: Vermont law mandates that hosts post certain information within their rental units, including contact details for the person responsible for maintenance and contact information for the Department of Health and the Department of Public Safety's Division of Fire Safety.
• Secure proper insurance: While not always legally required, it's highly recommended to obtain appropriate insurance coverage for short-term rental properties.
• Understand local regulations: Rules can vary significantly between municipalities. For instance, Chester limits short-term rental unit capacity to two guests per bedroom plus two additional guests, while Burlington has proposed reforms to limit the number of housing units that can be converted to short-term rentals.

It's worth noting that the landscape of short-term rental regulations in Vermont is evolving. For example, a bill was proposed in 2021 that would have restricted short-term rentals to properties where the owner lives for at least 270 days per year. While this bill didn't pass, it highlights the ongoing discussions around regulating this industry.

Additionally, starting August 1, 2024, Vermont will implement a new 3% surcharge on short-term rental income, which operators will need to collect and remit along with the existing 9% Rooms Tax.

For those considering entering the short-term rental market in Vermont, it's crucial to research both state and local regulations thoroughly. Joining local short-term rental associations or forums can be helpful for staying informed about regulatory changes and sharing experiences with other hosts. The Vermont Short Term Rental Alliance (VTSTRA) is one such organization that monitors and reports on STR regulatory activity across the state.

Remember, compliance with these regulations not only ensures legal operation but also contributes to a well-regulated market that aligns with Vermont's goals of nurturing a vibrant, sustainable tourism industry while preserving local communities.

Short-Term Rental Licensing Requirements in Vermont

Vermont does not currently have a statewide licensing requirement specifically for short-term rentals. However, there are several important registration and compliance steps that short-term rental operators must follow:

1. Register with the Vermont Department of Taxes: All short-term rental operators must obtain a Vermont meals and rooms tax account number. This registration is free and can be done online through the Vermont Department of Taxes website.
2. Display Tax Account Number: The Vermont meals and rooms tax account number must be included in any advertisements for the rental.
3. Complete Safety Compliance Form: Operators must complete the 'Short Term Rental Safety, Health and Financial Obligations' form prior to renting. This form must be displayed inside the rental property but does not need to be filed with any state agency.
4. Fire Safety Compliance: Short-term rentals must adhere to state fire safety and life safety codes. This includes having operable emergency exit windows and functional smoke and carbon monoxide alarms.
5. Post Required Information: Vermont law mandates that hosts post certain information within their rental units, including contact details for the person responsible for maintenance and contact information for the Department of Health and the Department of Public Safety's Division of Fire Safety.

While there is no specific state license for short-term rentals, operators should be aware that if they offer three or more units for rent or provide food service, they may need to obtain a lodging license from the Vermont Department of Health.

The process of registering for a tax account typically takes a few business days. There are no state-level fees associated with registering a short-term rental, but operators should budget for any costs related to ensuring their property meets safety standards.

Regarding penalties, while there are no specific fines mentioned for operating without proper registration, failing to collect and remit the required taxes can result in penalties and interest charges from the Vermont Department of Taxes. Additionally, non-compliance with safety regulations could lead to fines or closure of the rental property.

It's important to note that some municipalities in Vermont may have their own additional licensing or registration requirements for short-term rentals. For example, Killington requires short-term rental operators to register their rentals with the Zoning Administrator and renew their applications annually. Therefore, it's crucial for operators to check with their local city or town government for any additional local requirements.

Required Documents for Vermont Short-Term Rentals

To operate a short-term rental legally in Vermont, hosts must obtain and display several key documents:

1. Vermont Meals and Rooms Tax Account: All short-term rental operators must register with the Vermont Department of Taxes for a meals and rooms tax account, even if they only rent through a platform like Airbnb that collects and remits taxes on their behalf. The account number must be displayed in all advertisements for the rental. Registration is free and can be completed online through the Department of Taxes website.
2. Certificate of Compliance: Short-term rental operators must complete the "Short Term Rental Safety, Health and Financial Obligations" form to certify compliance with health and safety requirements. This form must be retained on-site but does not need to be filed with any state agency.
3. Contact Information Posting: Vermont law requires short-term rental operators to visibly post within each unit the contact information for the person responsible for the unit's maintenance, as well as contact details for the Department of Health and the Department of Public Safety's Division of Fire Safety. The state provides a sample placard that can be printed and posted to meet this requirement.
4. Proof of Insurance: While not legally mandated by the state, it's highly recommended that short-term rental operators maintain appropriate liability insurance coverage for their property. Some municipalities may require proof of insurance as part of their permitting process.
5. Local Permits or Registrations: Depending on the property's location, additional permits or registrations may be required by local zoning laws. For example, short-term rentals in Killington must register annually with the town's Zoning Administrator, while Burlington is considering requiring hosts to reside at the property and register their rental with the city. Operators should check with their local government for specific requirements.
6. Change of Use Permit and Certificate of Occupancy: If a property is being converted from a long-term to a short-term rental, a change of use permit and new certificate of occupancy may be needed to certify compliance with fire safety and building codes. Properties accommodating more than 8 guests have the strictest requirements, including submitting documentation of sewer/septic capacity and an approved inspection report from the Division of Fire Safety.

It's important to note that this list covers state-level requirements and that additional documents, like a lodging license, may be necessary in certain circumstances (e.g. rentals offering more than two units or serving food). Short-term rental operators should carefully review both state and local regulations to ensure they have all required permits and paperwork in place before listing their property. Failure to comply can result in fines, penalties, and legal issues.

Vermont Short-Term Rental Taxes

Short-term rental operators in Vermont are subject to several taxes, which they must collect from guests and remit to the appropriate authorities. Understanding these taxes is crucial for compliance and proper financial management of your rental business:

Vermont Meals and Rooms Tax: This is the primary tax applicable to short-term rentals in Vermont. The current rate is 9% of the total rental charge, including any cleaning fees and guest fees for reservations of 29 nights or shorter.

Local Option Meals and Rooms Tax: Some municipalities in Vermont have implemented an additional 1% tax on top of the state tax. This brings the total tax rate to 10% in these areas. Cities with this additional tax include Burlington, Stowe, Killington, and several others.

Vermont Short-Term Rental Surcharge: As of August 1, 2024, a new 3% surcharge will be applied to short-term rentals. This is in addition to the existing taxes, bringing the total tax rate to either 12% or 13%, depending on whether the local option tax applies.

City-Specific Taxes: Some cities have their own additional taxes. For example, Burlington imposes a City Restaurant, Hotel, Amusements and Admissions Tax, which can range from 2% to 9% depending on the listing type.

Sales Tax: If you sell merchandise to your guests (e.g., souvenirs, local products), you must collect and remit the 6% Vermont Sales Tax on these items.

It's important to note that these taxes apply to the total rental charge, which includes the nightly rate, cleaning fees, and any other guest fees. For rentals through platforms like Airbnb or VRBO, these companies often collect and remit these taxes on behalf of the host.

Potential Tax Write-offs and Deductions

Short-term rental operators may be eligible for various tax deductions, which can help offset their tax liability:

1. Ordinary and Necessary Expenses: This includes costs that are common and accepted in the short-term rental industry, as well as expenses that are helpful and appropriate for your business.
2. Depreciation: You can deduct the cost of property improvements, furniture, and appliances over time.
3. Travel Expenses: Business-related travel costs, including mileage for property visits, can be deductible.
4. Interest: Interest paid on loans related to your rental property is typically deductible.
5. Home Office: If you use part of your home exclusively for managing your rental business, you may be eligible for a home office deduction.
6. Insurance: Premiums paid for rental property insurance can be deducted.
7. Professional Fees: Costs for hiring professionals such as property managers, accountants, or lawyers for your rental business are generally deductible.
8. Property Taxes: Real estate taxes paid on your rental property are usually deductible.
9. Advertising and Marketing: Expenses related to promoting your rental can be written off.
10. Repairs and Maintenance: Costs for keeping your rental property in good condition are typically deductible.

It's crucial to keep detailed records of all expenses and consult with a tax professional familiar with short-term rental regulations in Vermont to ensure you're maximizing your deductions while remaining compliant with tax laws. Remember, the ability to claim these deductions may depend on how many days you rent out your property and how you use it throughout the year.

Does Vermont Strictly Enforce STR Rules?

Vermont has a mixed reputation when it comes to enforcing short-term rental regulations. While the state itself has not been overly strict, enforcement varies significantly between municipalities.

In the ski haven of Killington, for instance, a substantial share of properties listed on platforms such as Airbnb currently operates without impending additions to existing regulations. This presents an appealing prospect for those looking to host without the weight of new legislative impositions. However, traversing the terrains of rental laws means staying vigilant for future changes that could alter the regulatory topography.

On the other side of the spectrum lies Burlington, where the pursuit of balance between the boon of tourism and the preservation of affordable housing stock has culminated in a more regulated environment. Here, proprietors face a stringent set of controls that reflect the city's commitment to maintaining a sustainable community fabric while still welcoming visitors.

Compared to other states, Vermont falls somewhere in the middle in terms of being Airbnb friendly. While there is no statewide ban on short-term rentals, the regulatory landscape is evolving, with more cities considering restrictions. The state's largest city, Burlington, has notably strict rules requiring hosts to reside at the property they rent out.

Despite the rules, many hosts continue to operate short-term rentals across Vermont. According to discussions on forums like Bigger Pockets and Reddit, enforcement of STR regulations is inconsistent, especially in smaller towns and rural areas. Some hosts express frustration with the patchwork of local laws, while others appreciate the relative freedom to operate in certain communities.

In conclusion, Vermont's enforcement of short-term rental rules is a mixed bag. While cities like Burlington are cracking down, other areas remain more lenient. Hosts should carefully research the specific regulations in their locality, as the landscape continues to shift. Overall, Vermont is moderately Airbnb friendly compared to other states, but the trend seems to be moving towards greater regulation, particularly in larger cities grappling with affordable housing concerns. Nonetheless, many hosts continue to find success operating STRs in the Green Mountain State, especially in smaller towns and ski destinations.

How to Start a Short-Term Rental Business in Vermont

Starting a short-term rental business in Vermont can be a rewarding venture, but it requires careful planning and attention to detail. Follow these steps to get your business up and running:

Research local regulations: Before investing in a property or listing your existing home, thoroughly investigate the short-term rental regulations in your desired location. Rules can vary significantly between cities and towns, so it's crucial to understand the specific requirements you'll need to meet.

Tip: Reach out to your local zoning department or planning commission for guidance on navigating the regulatory landscape.

Develop a business plan: Craft a comprehensive business plan that outlines your target market, pricing strategy, marketing approach, and financial projections. This will serve as a roadmap for your business and help you stay focused on your goals.

Tip: Analyze the competition in your area to identify opportunities to differentiate your rental and attract guests.

Register with the Vermont Department of Taxes: All short-term rental operators in Vermont must obtain a meals and rooms tax account number. This registration is free and can be completed online through the Department of Taxes website.

Tip: Keep detailed records of all transactions and tax payments to ensure compliance with state requirements.

Obtain necessary permits and licenses: Depending on your location and the specifics of your rental, you may need to secure various permits and licenses. This could include a change of use permit, certificate of occupancy, or local rental registration.

Tip: Begin the permitting process early, as it can take several weeks or even months to obtain all necessary approvals.

Ensure your property meets safety standards: Vermont requires short-term rentals to adhere to fire safety and life safety codes. Install operable emergency exit windows, functional smoke and carbon monoxide alarms, and any other mandated safety features.

Tip: Consider hiring a professional inspector to assess your property and identify any areas that need improvement.

Prepare your property for guests: Create a welcoming and comfortable space for your guests. This includes furnishing the rental, stocking essential amenities, and developing a cleaning and maintenance plan.

Tip: Focus on creating a unique and memorable experience for your guests to encourage positive reviews and repeat bookings.

List your property on short-term rental platforms: Once your property is ready, create listings on popular platforms like Airbnb and VRBO. Craft compelling descriptions, showcase high-quality photos, and set competitive rates.

Tip: Optimize your listings for search by including popular keywords and highlighting your rental's unique features and location.

Manage your bookings and guests: As reservations start coming in, communicate promptly with guests, provide clear check-in instructions, and be available to address any concerns or questions during their stay.

Tip: Consider using a property management software or hiring a professional property manager to streamline operations and provide a seamless experience for your guests.

Continuously improve and adapt: Monitor your performance, gather feedback from guests, and stay informed about changes in local regulations. Be prepared to adapt your business strategy as needed to remain competitive and compliant.

Tip: Join local short-term rental associations or online forums to network with other hosts and stay up-to-date on industry trends and best practices.

Starting a short-term rental business in Vermont requires diligence, dedication, and a willingness to navigate a complex regulatory environment. By following these steps and staying attuned to the unique needs of your market, you can build a successful and rewarding venture in the Green Mountain State.

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

Navigating the regulatory landscape for short-term rentals in Vermont can be complex, as requirements can vary between state and local levels. Here are some key contacts and resources for short-term rental operators:

Vermont Department of Taxes: For questions about tax registration, collection, and remittance.

1. Phone: (802) 828-2551
2. Email: tax.business@vermont.gov
3. Website: https://tax.vermont.gov/business/short-term-rentals

Vermont Department of Health: For health and safety regulations related to short-term rentals.

• Phone: (802) 863-7221
• Website: https://www.healthvermont.gov/environment/food-lodging/short-term-rentals

Vermont Division of Fire Safety: For fire safety requirements and inspections.

• Phone: (802) 479-7561
• Website: https://firesafety.vermont.gov/buildingcode/codesheets

Local Town or City Offices: For specific zoning regulations and local permits. Contact information varies by municipality. For example:

Burlington: Department of Permitting and Inspections

• Phone: (802) 863-0442
• Website: https://www.burlingtonvt.gov/DPI

Vermont Short Term Rental Alliance (VTSTRA): A non-profit organization advocating for short-term rental owners and operators in Vermont.

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

Vermont Lodging Association: Offers resources and advocacy for lodging businesses, including short-term rentals.

• Phone: (802) 223-7303
• Website: https://www.vtlodging.org/

Vermont Chamber of Commerce: Provides business resources and advocacy.

• Phone: (802) 223-3443
• Website: https://www.vtchamber.com/

For community engagement and peer support, short-term rental operators in Vermont might find these online forums helpful:

Airbnb Community Center - Vermont: A forum for Airbnb hosts to discuss local issues.

Website: https://community.withairbnb.com/t5/Vermont/bd-p/Vermont

Vermont subreddit: While not specific to short-term rentals, this can be a good place to ask questions about local regulations and get community feedback.

Website: https://www.reddit.com/r/vermont/

BiggerPockets Vermont Forum: A real estate investment community with discussions on short-term rentals in Vermont.

Website: https://www.biggerpockets.com/forums/731-vermont-real-estate-investing

Remember to always verify information from online forums with official sources. Regulations can change, and it's crucial to stay up-to-date with the latest requirements from state and local authorities.

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

To gain insight into the experiences and opinions of short-term rental hosts in Vermont, we turned to popular online forums like Reddit and Bigger Pockets. Here's what we found:

Reddit - r/AirBnB - "New Host in Vermont": In this thread from October 2019, a new host in rural southern Vermont sought advice on navigating state and local regulations. They noted that their town had no specific restrictions, but they were unsure about fire inspection requirements. Responses suggested checking with the town for fire inspection rules and ensuring proper safety measures like fire extinguishers and working alarms.

Reddit - r/vermont - "Are Airbnbs an issue in your community?": This February 2023 post highlighted the impact of short-term rentals on housing availability in ski towns like Mount Snow. Locals shared stories of being pushed out of rentals as properties were converted to Airbnbs, leading to workforce shortages and community disruption. Many expressed frustration with the hollowing out of neighborhoods and the challenges of living in "ghost towns" surrounded by vacation rentals.

Reddit - r/vermont - "Rent": In this September 2024 post, a prospective renter seeking housing near Stowe shared their challenges finding affordable options amidst the short-term rental boom. Locals offered advice on expanding the search to nearby towns and cautioned about the realities of Vermont's housing shortage, high costs of living, and seasonal job market. The thread underscored the difficulties facing renters in popular tourist destinations.

While these forums provide valuable first-hand accounts, it's important to note that experiences and opinions can vary widely. Hosts in less-impacted areas may have different perspectives than those in communities grappling with housing shortages. Nonetheless, these discussions offer a glimpse into the complex dynamics surrounding short-term rentals in Vermont, highlighting the need for balanced regulations that consider the interests of hosts, guests, and local residents alike.

As the regulatory landscape continues to evolve, hosts should stay engaged with their local communities, participate in public forums, and stay informed about any changes to state or municipal rules. By working together and maintaining open lines of communication, Vermonters can strive to create a short-term rental market that benefits all stakeholders.

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.