Richmond, Virginia, imposes new residency requirement on short-term rental owners

Short-term rental (STR) operators in Richmond, Virginia, face tougher rules after the City Council passed an ordinance overhauling the city’s STR regulations.

The new law requires operators to obtain a city-issued STR permit. Owners in residential areas can only rent out their entire home for short terms (less than 30 days) if the property is their primary residence where they live for at least 185 days a year. Hosts are required to prove their residency by presenting voting or DMV records. 

Operators in residential areas may offer short-term rentals in accessory dwelling units (ADUs) on their primary residence property. Short-term rental managers may also rent single rooms to short-term guests while the host is present for the stay.

The new ordinance restricts the number of short-term rentals in multi-family buildings to 10 units, and they may make up no more than a third of any given building. The law also spells out rules on parking, signage, and occupancy limits.

Richmond steps up enforcement

Around 1,100 short-term rentals are believed to be operating in Richmond, but the city has issued only 63 official STR permits. The city plans to beef up enforcement of the new law by hiring two new zoning officers.

Short-term rentals in Richmond became subject to the same 8% lodging tax as hotels under a measure approved by the City Council this summer. The data generated by the administration of this tax also helps city officials better identify short-term rentals to aid in the enforcement of the new ordinance.

The tax is expected to generate additional revenue of more than $3.2 million for the Greater Richmond Convention Center (GRCC). 

Short-term rental hosts must comply with lodging tax rules

Richmond short-term rental operators must collect the lodging tax from guests and remit it to the city, unless an accommodations intermediary, including STR marketplaces such as Airbnb and Vrbo, collects the tax from the guest at the time of payment.

In addition to local lodging tax, short-term rentals in Richmond are also subject to state sales tax. STR operators are required to register with the Virginia Department of Taxation. Both Richmond and the state of Virginia define a short-term rental as a stay of fewer than 90 days or tax purposes. Accommodations intermediaries are required to collect and remit all state and local lodging taxes for their listings.

If a Virginia host conducts all their short-term rental transactions through an intermediary, the host doesn’t need to register with the state. However, the host is responsible for collecting and remitting lodging tax and sales tax to local and state tax authorities if taxes aren’t being collected on their behalf.

Avalara MyLodgeTax can help short-term rental hosts automate and simplify lodging tax compliance at the city, county and state levels, including tax registration and filing. For more on short-term rental lodging tax in Virginia, see our state 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.