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Portland, Maine, votes to allow more short-term rentals


Portland, Maine

In Maine, the Portland City Council voted to increase the cap on non-owner-occupied short-term rentals to 400 from the current 300. The new rules go into effect on December 1.

Currently, there are 315 non-owner-occupied units being rented for short terms, with another 31 on a waiting list. This is partly due to the fact that building owners have been allowed to count more than one unit in buildings they own as owner-occupied. Going forward, they’ll only be able to count their primary residence as owner-occupied, and other short-term rentals in their buildings will count toward the 400-unit cap.

Non-owner-occupied units that are already registered with the city are eligible to register again next year, even if they exceed the cap. Building owners are allowed to register up to five short-term rentals in the same building.

Existing short-term rental rules in Portland prohibit non-owner-occupied short-term rentals in single-family homes and condominium units. Short-term rental operators must register yearly and pay a registration fee. No more than two short-term rental guests are allowed per bedroom and two more may use other areas, such as a living room, for sleeping.

Maine short-term rental hosts are also required to register with the state for tax purposes, collect Maine sales tax on their bookings, and file sales tax returns, unless they rent only one room for fewer than 15 days a year. Airbnb and HomeAway/VRBO collect this tax on behalf of all their short-term rental hosts in Maine. However, short-term rental hosts who use other platforms are responsible for collecting and remitting taxes on their own.

It’s important for short-term rental operators to understand that short-term rental platforms generally do not take care of state tax registration or filing for hosts, as they generally submit any tax collected in one lump sum. That means it’s up to hosts to report to the state how much tax was collected and remitted for them. MyLodgeTax can help Maine hosts automate and simplify sales tax compliance.

Meanwhile, in neighboring South Portland, voters recently approved a measure to uphold short-term rental regulations that the City Council passed earlier this year. Those rules ban non-owner-occupied short-term rentals in residential zones, although owners of single-family homes can rent their houses for up to 14 days per year.

Owner-occupied short-term rentals are allowed under certain conditions in residential areas in South Portland. Short-term rental operators must also be inspected, insured, and licensed by the city and collect Maine sales tax.

The Portland council’s expansion of the short-term rental cap is in contrast to the trend in many big cities that are moving to restrict short-term rentals. Boston, for example, passed one of the strictest short-term rental laws in the country earlier this year. However, the city has agreed to delay enforcement of some of the provisions of the measure due to a lawsuit by Airbnb.

Washington, D.C., also recently passed a restrictive new law that bans non-owner occupied short-term rentals.


Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky specializes in writing about tax and legal topics. She relishes the challenge of translating legalese into information that is accurate, useful, and easy to understand.