Virginia Beach short-term rentals face criminal penalties for violations

Short-term rental (STR) operators that violate STR laws in Virginia Beach, Virginia, can face criminal penalties under rule changes approved by the Virginia Beach City Council. Previously, violations were considered civil infractions. The changes allow for stricter enforcement and align STR rules with other city zoning regulations.

Zoning ordinance violations have generally been punishable by criminal penalties, but in 2020, the City Council made an exception for STR violations, with the goal of speeding up enforcement. However, that wasn’t the result, so the city changed STR violations back to misdemeanors. Fines start at $1,000 for initial violations, increasing to $1,500 for uncorrected issues. Ongoing violations can result in further charges and fines of up to $2,000.

The council also passed other amendments recommended by an STR task force, including:

• STR signage must include the property manager’s name so they can be reached in case of issues.
• Only one parking spot per two bedrooms is required; previously, it was one spot per one bedroom. 
• STR operators must get an inspection as part of the ATR permit application process and undergo another inspection every five years. STRs may now use class A, B, and C contractors for inspections.
• STR applicants must now pay a fee of $200. If the application is approved, the application fee will be deducted from the first year of the yearly permit fee of $500. 

In Virginia Beach, an STR is defined as “an entire dwelling rented for less than 30 consecutive days for compensation.” STR operators are required to obtain a zoning permit, have insurance of at least $1 million, and register with the Commissioner of the Revenue.

STRs in Virginia Beach are subject to city transient occupancy tax (TOT) and a $2-per-night flat room tax. STR operators are responsible for remitting the tax and fees to the city by the 20th of each month for the prior month’s rentals.

Virginia Beach STRs are also subject to state lodging taxes, which apply to stays of less than 90 days. Operators must register with the Virginia Department of Taxation and collect state and local sales and use tax from guests.

STR marketplaces such as Airbnb and Vrbo are required to collect state and local sales and use tax and local transient occupancy taxes for their listings. If all your Virginia STR transactions are conducted through a marketplace, you don’t need to register with the Virginia Department of Taxation or collect Virginia sales tax. Operators are responsible for state and local taxes not collected by marketplaces.

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