Avalara MyLodgeTax > Blog > State and Local News > New York City delays enforcement of new STR law to September following lawsuit

New York City delays enforcement of new STR law to September following lawsuit

  • Jun 20, 2023 | Jennifer Sokolowsky

New York City officials have delayed enforcement of the city’s new short-term rental (STR) ordinance until September 5. The move comes after Airbnb and three short-term rental hosts sued the city on June 1 over the new rules, calling them a “de facto ban against short-term rentals.” 

The city said in a court filing it won’t issue violations or impose fines on hosts or STR marketplaces such as Airbnb or Vrbo until the September date. 

According to the New York State multiple dwelling law, short-term rentals are only allowed in most multifamily buildings if the permanent resident lives in the unit while guests are staying there, but it’s been difficult for the city to enforce that law. The new ordinance was passed as an attempt to prevent short-term rentals from reducing the city’s available housing stock.

Under the measure, which was approved in January 2022, hosts must obtain a short-term rental registration number from the city and include that number in any advertisements. The city will only issue registration numbers for hosts who permanently live in their short-term rental property and are renting out rooms, not the whole property. Operators must own the property, or, if they are tenants, prove they are allowed by the owners to rent the property for short terms. The city will not issue short-term registration numbers for rent-controlled or city-subsidized buildings or public housing.

Hosts must inform the city if their vacation rentals are listed with a short-term rental marketplace such as Airbnb or Vrbo. Marketplaces are also required to register with the city, include registration numbers in listings, and verify registration numbers prior to processing transactions. Airbnb already shares data about listings and hosts with the city.

Violations of the new ordinance can result in fines of up to $5,000, or three times the revenue generated by the short-term rental, for each violation. Short-term rental marketplaces can face fines of $1,500 per violation for processing payments for unregistered hosts.

The ordinance also allows property owners to register with the city to block their properties from being permitted as STRs. So far, around 8,000 buildings have been added to the prohibited list.

This is the second time enforcement of the law has been postponed. The measure went into effect in January. However, enforcement was delayed until July 1. The Mayor’s Office of Special Enforcement currently has a staff vacancy rate of over 50%, which could make it more difficult for the city to effectively enforce the rules.

While the city has received 781 applications since March, only 13% of applications had been fully reviewed and 36 applications accepted as of June 5. Seven of those applications were rejected because they were for rent-regulated apartments.

Out of the approximately 43,000 New York City STRs listed on Airbnb, more than a quarter are whole homes and apartments, with 7,000 of those regularly booked, according to data provided by Inside Airbnb.

Short-term rentals in New York City are subject to the city’s hotel room occupancy tax. Vacation rental operators must collect and pay this tax unless the host rents a whole home to guests not more than 14 days in a year or only once or twice in a year. Vacation rental hosts in New York City must also collect state-administered lodging taxes: state sales tax, New York City sales tax, and a hotel unit fee of $1.50 per day.

Some short-term rental marketplaces have agreements with individual counties in New York to collect lodging taxes for their hosts. However, neither Airbnb nor Vrbo currently collect taxes on behalf of their hosts in New York City. When hosts don’t have lodging taxes collected on their behalf, they’re responsible for registration, collection, and tax return filing with the city and state.

MyLodgeTax can help New York vacation rental hosts automate and simplify lodging tax compliance. For more on short-term rental taxes in New York, see our Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.

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.
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