New York City STR law goes into effect

A new law requiring New York City short-term rental (STR) hosts to register with the city went into effect January 9.

Under the measure, which was approved in January 2021, 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. 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.

Before the law went into effect, approximately 40,000 New York City short-term rentals were listed on Airbnb, with more than half of those for whole-home rentals rather than rooms, according to data from the tracking firm Inside Airbnb.

Christian Klossner, executive director of Mayor Eric Adams’ Office of Special Enforcement, said he expects 10,000 active short-term rental listings to either leave the market or come into compliance once the new ordinance takes hold.

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 has been difficult for the city to enforce that law.

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 do not have lodging taxes collected on their behalf, they are responsible for tax compliance — including registration, collection, and 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.