New Narragansett STR ordinance goes into effect September 1

A new law in Narragansett, Rhode Island, will require guests to rent short-term rentals (STRs) for a minimum of seven nights. The ordinance goes into effect September 1, 2024.

Under the regulations, STRs are defined as dwelling units that are rented for less than 30 consecutive nights. Short-term rental operators are required to apply for permits, which cost $425 in fees for town residents and $850 for nonresidents. The number of STR permits will be capped at 1,100 in 2024 and decrease to 1,000 in 2025 and 900 in 2026.

STRs must pass building and fire code inspections and meet requirements for square footage and parking spaces. Nonbuilding structures such as garages and trailers may not be used as STRs and large events such as weddings or bachelor parties are not allowed. Hosts must also designate a local representative who can respond to complaints.

Fines for minor violations of the STR regulations start at $250. Major violations — including operating without a permit, refusing a required inspection, and making false claims to get a permit — can result in a $1,000 fine. The town plans to hire a private vendor for STR tracking and enforcement.

Currently, 1,158 STRs are operating in Narragansett, which is more than 20% of those listed in the statewide registry.

In Rhode Island, STR hosts who list their properties on third-party marketplaces such as Vrbo and Airbnb are required to register with the Rhode Island Department of Business Regulation. Hosts who fail to register face a fine of $250 for the first 30 days, $500 for 31 to 60 days, and $1,000 for more than 60 days. STR marketplaces also face fines for listing an unregistered rental property. 

Narragansett follows other Rhode Island cities in regulating STRs. In 2022, Newport banned STRs in residential zones. Owners in residential zones who live in a property full time as their permanent residence are permitted to rent up to two rooms to no more than four people. Other cities with new STR laws over the past few years include Providence, Westerly, Johnston, Middletown, Portsmouth, East Providence, Warwick, and Cumberland.

Rhode Island hosts must also register with the Rhode Island Division of Taxation, collect lodging taxes from their guests, file lodging tax returns, and remit the taxes.

If hosts use a short-term rental marketplace that collects all guest payments, the marketplace is required to register with the Rhode Island Division of Taxation, charge and collect taxes, and remit the tax on hosts’ behalf. Hosts who collect payments from short-term rental guests directly are responsible for their own lodging tax compliance.

Avalara MyLodgeTax can help Rhode Island vacation rental hosts automate and simplify tax compliance. For more on lodging taxes in Rhode Island, 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.