The powers to be in Beacon Hill have attempted to level the playing field between online short-term platforms and traditional hotels and its impact on the shortage of Beacon Hill apartment rental stock by enacting what some have called one of the country’s toughest laws governing short-term rents. The expanded Short-Term Rental Tax Room Occupancy Excise Tax has been effective since July 1, but operators of short-term rentals are still grappling with the new obligations. This blog addresses the state law. 

What is the Beacon Hill Real Estate Short Term Apartment State Law?

In brief, the new law requires tax on all short-term rentals of more than 14 days in a calendar year for rental contracts entered into on or after January 1, 2019. I you’re a Beacon Hill apartment rental owner and use your apartment as a short-term rental. The state tax is 5.7 percent. Some cities and towns can add an additional tax of up to 6.5 percent. Other local taxes, such as convention center surcharges, may apply.

What is Short Term Apartment Tax Implications

Adherence to the state room occupancy tax is mandatory for operators/intermediaries who rent a room in their Massachusetts property on a short-term basis; rent property they own in Massachusetts on a short-term basis; and/or arrange short-term rentals of Massachusetts for others. In other words, think summer (or winter) home rentals or Airbnbs. An operator does not have to be a Massachusetts resident or a Massachusetts-based business for this tax to apply.

Bottom Line

Short-term had been considered no more than 31 consecutive calendar days but it’s worth repeating – as a result of the new law, if a property is rented for more than 14 days in a calendar year, whether consecutive or not, it is now subject to this tax.

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