Avalara MyLodgeTax > Blog > Lodging Taxes > Asheville, North Carolina, severely restricts short-term rentals

Asheville, North Carolina, severely restricts short-term rentals

  • Feb 27, 2018 | Jennifer Sokolowsky

The Asheville City Council has approved a new law that severely restricts new short-term vacation rentals. While short-term rentals that had city permits before the new rules were put into place will still be able to operate, new vacation rentals must get special permission, called “conditional zoning,” from the City Council to go into business.

New vacation rentals are still allowed in areas of the city zoned as “Resort.” They’re also permitted for “homestays” where the host is present during a guest’s stay. In these types of rentals, guests may rent up to two rooms, and guest rooms cannot have their own kitchens.

Breaking any of the short-term rental rules can be penalized with a $500-per-day fine.

Concern about resident housing being converted into short-term rentals was a driver for the ban. According to the city, the number of housing units being turned into vacation rentals downtown rose from seven in 2015 to 44 in 2017. Outside downtown, that number increased from one in 2015 to 36 in 2017.

Ashville has been a popular spot for travelers in North Carolina who use short-term vacation rentals. In 2017, Asheville Airbnb short-term rental operators hosted more than 160,000 travelers and earned $19.8 million, a 10 percent increase from the previous year. Collectively, Airbnb hosts in Asheville earned more than hosts in any other city in the state.

Tourism is a major player in the Asheville economy, and is the third largest employer in the area, according to the Explore Ashville Convention & Visitors Bureau. In 2016, Buncombe County attracted 10.9 million visitors, including 3.8 million overnight guests. Visitors spent $1.9 billion, generating $2.9 billion in economic impact and supporting 26,700 jobs.

Airbnb has an agreement with North Carolina to collect all lodging taxes on behalf of Airbnb hosts. This includes states sales tax of 4.75 percent; local county taxes of 2 to 2.75 percent; and all locally imposed occupancy taxes, which generally range from 1 percent to 8 percent.

Short-term rental operators who use other rental platforms, such as VRBO and HomeAway, are responsible for collecting all sales and lodging taxes from guests and remitting them to the proper tax authorities themselves. MyLodgeTax, a managed tax filing service, helps many North Carolina hosts simplify and manage lodging tax compliance.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.