San Diego Aims To Clarify Rules For Airbnb Hosts
Monday, February 16, 2015
Some San Diego homeowners who rent out rooms using Airbnb.com and similar websites say they're unclear what taxes they must pay. The city is working to change that.
San Diego's city treasurer is working to clarify the regulations for hosts who use Airbnb.com and similar websites to rent out rooms on a short term basis, according to a memo sent to the mayor and City Council last week.
The city recently sent 252 letters to AirBnB and other hosts telling them they owe taxes on the rooms they rent. The crackdown on hosts was first reported by Voice of San Diego, an online news organization.
"As a result of our efforts, we have seen an increase in applications and payments," City Treasurer Gail Granewich wrote in the memo.
City Memo on AirBnB Rentals
A memo from San Diego's treasurer to the mayor and City Council on efforts to clarify the regulations for hosts who use websites like AirBnB.com to rent out rooms.
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Since Feb. 10, 1,776 short-term rental operators were registered with the city, an increase of 187 since Oct. 1, she wrote. She said that uptick in registration means the city has collected more than $105,000 in taxes "and related penalties" from 95 of the 187 newly registered hosts. Those penalties can include back taxes and late fees. Granewich wrote the city saw an increase of almost 400 percent in taxes and fees from the same time period last year.
Property owners who rent out rooms on a short term basis have to pay three kinds of taxes:
• The Rental Unit Business Tax, which property owners must self report and pay each year.
• The Transient Occupancy Tax, a 10.5 percent tax imposed on any rentals of less than a month.
• The Tourism Marketing District assessment, a 0.55 percent tax on rentals in buildings with less than 30 units.
In addition to sending letters, the City Treasurer's Office recently updated the city's website with the regulations and sent 90,000 "Did You Know" inserts with the annual Rental Unit Business Tax bills, reminding hosts to pay their taxes.
But property owners who aren't registered to pay the rental unit tax wouldn't get this information.
The treasurer's memo does not mention conditional use permits, which are required in some neighborhoods for homeowners looking to rent out rooms. It can take a year to get these permits, Voice of San Diego reported.
City Councilwoman Lorie Zapf, who chairs the City Council's Smart Growth and Land Use Committee, is asking council members to submit ideas for changing the city's municipal code on rentals before a committee meeting April 22.
City Councilman Chris Cate said his office reviewed the municipal code and found the term "short-term rental property" is not defined, "so there's a lot of ambiguity in terms of what rules property owners who rent their property or a portion of their home for less than 30 days have to comply with."
He said the three taxes required are in different sections of the municipal code, so he's hoping to clear that up.
"We're trying to clarify all of these things and follow a guideline in which these property owners know what to do so they do follow the rules," Cate said. "I think they do want to follow the rules but it's so ambiguous that they don't know how to."
The proposed changes won't help hosts who already owe fines, but Cate hopes the City Council can set out new laws that clarify the rules going forward.
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