FAQs: Short Term Rentals in New York’s Philipstown Area
The Cold Spring Chamber mixer this month provided the FAQs on on the business laws, history, rules, and regulations for short-term rentals in the Philipstown area. A lively discussion followed with Putnam County Legislator, Nancy Montgomery, the Director of Putnam County Tourism, Tracey Walsh, Sheriff Langley, and members of the Chamber including board members, a local insurance agent, real estate agents, airbnb hosts, retailers, and legal advisers.
Whether you have a mother-in-Law suit, but no mother-in-law, a backyard bungalow perfect for visitors, an accessory apartment over the garage, or a room to rent in your house and are thinking about joining the growing ranks of people who are offering their hospitality service and space to over night visitors, you will need to know what rules apply to this kind of business in our area before you post your first listing for a short-term rental.
Background
Airbnb currently has agreements with 28 counties in NY state to collect room taxes, or occupancy taxes for those counties. Among the county airbnb tax collectors are our neighboring counties of Dutchess (4% tax), Westchester (3% tax), and Ulster county (2% tax) where home-sharing hosts are required to make the tax payments to the county every quarter.
Several cities have also added room occupancy taxes, such as Yonkers which “requires a tax of 3% of the rent for every occupancy for a room of rooms within the city.” The city of Hudson’s lodging tax, which was passed in 2017, requires operators of short-term rentals for less than 30 days — including those renting through the websites Airbnb and VRBO — to register with the city clerk, who would collect a 4% tax from visitors, part of which would be used to promote tourism in Hudson. Following two contentious hearings in Feb and March, Village of Irvington passed common sense short-term rental legislation. Main points consist of:
1. Permitted only in 1 and 2 family homes that comply with zoning and building codes
2. $250 initial fee, $150 annual renewal
3. Property must be owner's primary residence and have been its present size for 5 years
4. Not available for parties or events
5. Owner or surrogate must be within 30 minutes to respond to complaints
6. Owner responsible for all garbage, recycling and snow removal requirements
7, Owner who reaches annual rental limit of 180 days annually must occupy the residence for 90 days
8. Limit of 50 permits at any given time
Beacon attempted to make laws to regulate short-term rentals but no law was adopted in the midst of heated community debates. Many municipalities are waiting for NY State to address and regulate the issue and then will add their own laws afterwards.
On April 10, 2019, New York State Senators, State Sen. James Skoufis, D-39, and Assemblyman Joseph R. Lentol, D-50, announced the introduction of proposed legislation, which would provide for the “taxation, regulation and accountability for New York’s growing home-sharing industry.” But the legislation since has been stalled in committee.
Airbnb has collected and remitted over $1.7 million in hotel and motel room taxes since reaching the first agreement with Tompkins County, which includes the city of Ithaca, in July 2016.
What are the current laws that apply to the local residents who host vacationers in Philipstown?
New York state Department of Taxation and Finance currently requires a 8% sales tax to be collected and paid by all hotels (including what is defined as an “apartment hotel” which includes any apartment or house that does not serve as a resident home and is only rented out for short-term, overnight guests). Additionally, Putnam county “hotels” are subject to a Metropolitan Commuter Transportation District (MCTD) sales tax of .375%. Therefore, in Putnam County, short-term rentals that are not also resident homes must register their short-term rental as a “hotel” business with the NY state department of taxation to receive a Certificate of Authority and is subject to a 8.0375% sales tax, paid quarterly.
New York state, its counties, and their cities can all collect room taxes which hosts would charge guests to cover. Townships and villages cannot charge a tax, but can instead charge for operating permits. All of the above may create regulatory laws for appropriate use and code. Neither New York state nor Putnam County currently charges a short-term rental tax, or a room tax as they are sometimes called.
Current laws in NY state refer to something known as “bungalows” and Cold Spring has codes that refer to something known as “vacation houses.” The meaning of these terms are debatable in a court of law, but none of the current laws at the state, county, town, or village level addresses or directly applies language that regulates, taxes, or charges fees for permits of short-term vacation rentals within a resident's home from services such as airbnb.
What is permitted now?
In Cold Spring Village's current code short term rentals are only permitted on County roads e.g. Routes 9D and 301. Village code also requires homeowners to pay $500 and apply for a special-use permit before renting rooms in a “tourist home.” The definition of a “tourist home” is unclear.
Where is the village of Cold Spring on code updates that would apply to short-term rentals?
The code update committee will address the issue with the intention to apply it to what they call “short-term rentals”, presumably which would include airbnbs. These code change proposals will then have to be voted upon by residents in order to be adopted. Once adopted, the inspector will then enforce the new law. The village is currently working on hiring a village employee to inspect and enforce the code going forward.
What are the insurance requirements for short-term rental properties?
While Airbnb offers their hosts liability insurance which will cover injuries that may happen to your guests on your property ( someone tripping in your house and breaking a leg and wants medical bills covered), that does not cover damage done to your house by your guests (such as burning down the house). You will have to make sure that you have both liability and additional coverage for the “change of use”. We recommend explaining to your insurance company how you will be changing the use of your home and ask them what policy you need to protect your property. Most insurance companies can easily add this to your home policy for an up-charge.
Airbnb Host Statistics Around the Area (2018):
Collectively, Airbnb hosts in the Hudson Valley and Catskill region welcomed more than 300,000 guests and earned more than $50 million in supplemental income in 2018, according to Airbnb Inc
Ulster County: 149,800 guests; approximately 1,800 hosts earned about $8,200 annually each in supplemental income.
Dutchess County: 48, 800 guests; 630 hosts; $8,800 each in supplemental income.
Orange County: 35,000 guests; 440 hosts; $9,200 each in supplemental income.
Westchester County: 28,500 guests; 620 hosts; $7,100 each in supplemental income.
Sullivan County: 23,300 guests; 400 hosts; $5,000 each in supplemental income.
Putnam County: 8,700 guests; 90 hosts; $8,700 each in supplemental income.
Rockland County: 6,600 guests; 130 hosts; $8,000 each in supplemental income.
Some Costs That Hosts Have to Consider:
Airbnb or other online management platform fee
Wages for a rental manager or real-estate agent fee (an employeed person who greets guests and manages any neighbor complaints or emergencies that come up)
Short-term rental home insurance
Fire extinguishers
House cleaning services
Laundry service
Shipping costs (to return left behind items to guests)
Guest linen & towel sets
Replacing accidentally broken items
Tax accountant fees
Neighbor relations damage prevention