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New Washington, D.C., Airbnb law goes into effect October 1

Washington, D.C.

A new law that places restrictions on short-term rentals in Washington, D.C., takes effect October 1 — but the city must still take further steps to fully implement it.

The Washington, D.C., City Council passed the new legislation unanimously last year. And although Mayor Muriel Bowser declined to sign it, citing questions about its constitutionality, she allowed it to become law without her signature.

Under the ordinance, short-term rental operators must obtain city permits and hosts may only rent out their primary residence, not second or third homes. Hosts can only offer short-term rentals for up to 90 days a year when they’re not present. The rules also prohibit tenants from renting out their units as vacation rentals.

However, zoning laws that make short-term rentals illegal in most residential neighborhoods are currently preventing full enforcement of the new law.

When the council passed the short-term rental bill, it requested that the Zoning Commission change the zoning code to allow short-term rentals. The Zoning Commission agreed to make the change, but first asked the Office of Planning for a report offering guidance on vacation rentals.

The planning office took until August 30 of this year to release the report — a source of irritation for Council Chairman Phil Mendelson. The Zoning Commission has scheduled an October 17 hearing on the issue.

The planning office’s report recommends that the commission approve the zoning changes requested by the council. However, it also suggests the Zoning Commission should exclude some of the toughest restrictions of the city law from zoning changes, in case the law should change someday. These restrictions include prohibitions on renting out second homes and the 90-day annual cap on unhosted short-term rentals.

Mendelson insists that the council will not revisit short-term rental rules anytime soon.

Along with the provisions of the new law, Washington, D.C., short-term rental hosts are also required to collect District sales tax on accommodations from guests and pass it on to tax authorities. Both Airbnb and HomeAway collect this tax on behalf of their hosts, but hosts who do not use either of these platforms are required to collect sales taxes themselves.

All short-term rental hosts are required to register for tax collection with the D.C. Office of Tax and Revenue and file regular sales tax returns. MyLodgeTax can help Washington, D.C., short-term rental hosts comply with their sales tax obligations.

If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.

Washington, D.C., Airbnb rentals had a record summer. Between Memorial Day and Labor Day, 175,700 Airbnb users booked stays in D.C., the company said.

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.