New Orleans halts new short-term rental permits until March 2023

The New Orleans City Council has hit pause on issuing new short-term rental permits in residential areas until at least March of 2023. The move comes as the city works on rewriting its short-term rental law in response to a federal appeals court decision that invalidated key parts of the current ordinance. The latest moratorium extends a temporary hold on new short-term rental applications that the city had issued in September. 

Under the short-term rental permit moratorium, permit renewals for existing short-term rentals in residential areas are also on hold, with an exception for operators who had valid Short Term Rental Administration and Short Term Rental Operator permits before August 29, 2022. To qualify for the exception:

• Neither of the operator’s licenses can have expired before March 2, 2022
• The operator must have no outstanding short-term rental violations
• The operator must meet all other application requirements

The City Council has begun the process of revamping short-term rental regulations with a motion directing the City Planning Commission to review the current law and offer ideas for revisions.

The short-term rental ordinance for the city, which went into effect in 2019, requires vacation rental hosts in residential neighborhoods to have a “homestead exemption,” meaning they live there and claim the property as their primary residence. The federal judge’s ruling in August 2022 found that the law discriminated against out-of-state property owners.

Under the vacation rental law, short-term rentals are banned in residential areas of the Garden District as well as in most of the French Quarter, and they may take up no more than 25% of commercial or mixed-use property. The City Council has also outlawed vacation rentals in fourplexes.

The rules are designed to address proliferation of short-term rentals in residential areas and a lack of affordable housing. The city recently announced plans to step up enforcement of the city’s vacation rental law in the face of public criticism.

Vacation rentals are subject to lodging taxes that include Louisiana state sales tax and several city taxes, including sales tax, a short-term rental occupancy fee, occupancy privilege tax, and a short-term rental equalization occupancy tax. Short-term rental hosts in New Orleans are required to register and file lodging tax returns with city and state tax authorities.

Airbnb collects both city and state taxes on behalf of its hosts. Vrbo also collects city taxes for hosts in New Orleans, but does not collect Louisiana state taxes. Hosts are required to collect and pay taxes that are not collected by their platform, and they must register and file lodging tax returns even if taxes are being collected on their behalf.

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