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20141 Million Fine if You Rent Out Your Rooms Through Airbnb In This Town
Finally someone has put teeth into the escalating flaunting of the law many Airbnb hosts are making around the world. These homeowners haven’t gone though licensing requirements, nor paid bed taxes, nor performed a multitude of back breaking tasks most innkeepers of legitimate inns do.
On Friday, the Sydney Morning Herald broke the story that some local councils are threatening a $1.1 million fine plus an extra $110,00 a day for what the councils regard as an illegal breach of their planning controls.
A woman named Shauna, who wouldn’t give her last name, reported receiving a letter demanding an explanation in 10 days or the council could take action against her with the $1.1 million fine.
“It was quite a shocking letter to get,”
– Shauna, host through Airbnb for about a month at a time.
Most innkeepers find the spread of Airbnb rooms that don’t pay lodging tax as unfair competition, and are lobbying against allowing them in their towns.
– What do you think?
– Would your council put teeth like this into their planning requirements?
– How much of a fine would work in your town?
Linda Kremin
I am a vacation rental owner who is licensed in the U.S. My customers pay the same lodging taxes that a hotel or B&B customer pays. What is the problem? Many travelers would much prefer renting a place of their own when they are on vacation, rather than reside in someone else’s home or worse yet, a hotel full of strangers coming and going. A vacation rental is certainly the way I like to travel. Why can Sydney, Australia not just ask their vacation rental owners to collect and pay the same lodging tax that hotel owners collect and turn over to their government? I don’t understand.
Margaret Meyering
As a B & B owner who has worked hard to meet all legal requirements ie paying for: business licenses, yearly B & B permits for kitchen and lodging and charge taxes, have yearly inspections to the rooms and kitchen for everyone’s protection,in order to provide a safe and great enviornment for guests, it is most frustrating to see AirBnB come in and undercharge, sometimes renting sofas in a room and converted garages and not be required to meet standards. I am sure that Sydney has probably tried to get the others to comply without success so the next thing to do is get everyone’s attention. Compliance to health and sanitary codes is one way to safely protect everyone. Hurray for Sydney! I hope that US states and municipalities get more aggressive with AirB & B here!
Brian Preble
I think this is a lovely idea, though it’s unlikely to help in my town. Danby, Vermont is a tiny village without a proper government, and no zoning whatsoever. Based on the hand-written notes that count as legal documents here, it’s more of a hobby than an actual town. 🙂
Joanne & Greg Elliott
Go get ’em! It’s BS byAirbnb to go around the law and further diminishes the long standing work done by legit B&B owners. Play the game fairly or walk away from the table. It’s bad business for everyone in the hospitality industry! End of story!
Linda Lentz
BRAVO! Sure wish this county would do something about the problem. It wouldn’t need to be quite as extreme. May $10,000.
Alexandra
I am delighted to hear about this and congratulate you, Deborah, for being the first person to speak out in defense of the innkeeping industry. In my little seasonal-guest town, two years ago, one Airbnb host, last year, ten, this past summer, fifty. You won’t be surprised to know our bookings are way down, especially for this fall. Not only are Airbnb prices lower, it has somehow become the “trendy” choice for accommodation. I don’t think my little town could enact anything on the scale of Syndey, but I know one of our Selectmen is looking at this issue closely. I hope a lot of innkeepers will post comments here. I’m curious to know how others have been faring and if anyone has any suggestions on how to cope.
sumrublog
We used to own a B&B — just sold it — PLUS we booked three vacation rental houses in the same town for those visitors who came in groups. Of course, we collected and paid taxes on each and every one of our properties. VRBO and Homeaway are long-standing and very professional sites and we post on those sites what the tax rate is so please don’t include them. Airbnb is something different where people just book rooms in their houses and don’t collect taxes, which is wrong and should be considered illegal. It is a slap in the face to Innkeepers when people rent these rooms and do not collect taxes. I agree that Airbnb has become trendy and I think it’s because they’ve done a very good marketing job and they are attracting visitors away from the legitimate inns and vacation rentals.
david tetrault
Niagara Falls
I am some where in the middle I am a licensed |B&B and collect tax etc. and have recently started booking on airbnb and include the tax in my price. I have found over the years I have had to change where I advertise with the trends. I get a much smaller percentage from airbnb but have had very nice guests so far and find it amusing that I can actually review the guests. I have a beef with our tax laws If you have three rooms or less and make under $30,000 you are not obliged to charge tax in Ontario, this I find to be an unfair advantage. I do feel that the places should be liscenced but I don’t mind paying 3% instead of 15% for a booking through a large booking Company.
The B&B Team, Inn Consultants and Brokers
The sharing economy and Airbnb have taken the world by storm, witness the innkeeper who’s town went from 1 Airbnb to 50 in three years. Neither regulators, tax collectors, insurance companies, or other businesses have learned how to deal with something new, different, and HUGE. The sharing economy is not going to go away, but the playing field does need to be leveled. Reasonable regulations and an understanding that all innkeepers who are legal, collect and pay taxes, have insurance, and know what hospitality is could be using Airbnb to promote themselves, improve the caliber of hosts, be part of that “trendy” thing, and make some extra money.
David
David New Zealand
Big problem in NZ also as a motel owner I get very frustrated by people who see no wrong in competing with us without paying all the regulation fees we have to, this being unfair competition. I don’t have a problem with competition provided its on a level playing field.
Linda Singer
The City of Grand Rapids, in which I live and where Michigan Lake to Lake B&B Association is headquartered, just passed an ordinance regulating “home sharing.” Popularly and erroneously called “airbnbs,” these entrepreneurs must now obtain one of a limited number of licenses in the “home occupation” category to operate, which involves meeting fire, safety and health codes. They must provide dedicated off-street parking, and are limited to one room and two adults. Neighbors are notified of the issuance of the license. If a homeowner wants to rent out two or more rooms, they are welcome to pay the freight to obtain licensing as a B&B. Enforcement is via monitoring of Airbnb.com and other such websites. Creating and passing the ordinance took nearly a year of democratically-contentious debate and involved creation of a citizen’s task force and numerous public hearings. Hats off to Grand Rapids for protecting the spirit of free and fair enterprise by ensuring a level playing field for all in the lodging industry.
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[…] review of the City of Grand Rapids’ process was sent to us by Linda Singer in a reply to our story on the $1Million fine with which Sydney, Australia officials threatened […]