Mass. Targets Airbnb Rentals With New Law

January 2, 2019

Massachusetts is cracking down on short-term rentals, a move intended to clamp down on the explosive growth of companies like Airbnb. Massachusetts Gov. Charlie Baker signed the law to tax and regulate short-term housing rentals in the state.

A rumpled bed

PenMac - Morguefile

The new bill will require every rental host to register with the state. It also mandates that rental hosts carry insurance. Further, short-term rentals could be subject to the same 5.7 percent state levy paid by hotels. The law, however, exempts people who rent their homes 14 or fewer nights a year. Government officials estimates the new tax could raise at least $25 million annually.

“Our administration has long supported leveling the playing field for short-term rental operators who use their properties as de facto hotels,” Baker said in a statement.

State officials hope to register every short-term rental in the state by September. The new rules will take effect July 1.

Airbnb criticized the new law, calling it “flawed” and complex. Airbnb has already sued Boston in federal court over what it deems as stringent municipal regulations over short-term rentals in the city, which took effect Jan. 1.

“Massachusetts has chosen a pathway here that nobody else in the country has chosen,” Andrew Kalloch, Airbnb’s head of public policy for Massachusetts, told The Boston Globe. “Sometimes first in the nation is bad because it means ... what you have chosen to pass is a flawed measure.”

Cities and towns in the state could also impose their own taxes of up to 6 percent. Occasional hosts would be exempted. Additional taxes would be levied on hosts who own multiple units.

Other cities, such as New York and San Francisco, have used short-term rental registries to regulate the industry. Massachusetts, however, is reportedly the first state to require all hosts to register.

Housing advocates have pushed for a registry so that people could see whether their neighbors were renting a house or apartment short-term. The new law will list the community and street name on the registry. It will not list specific addresses, but cities and towns can choose to list such information.

“This is a tremendous victory for municipal leaders,” said Paul Sacco, president and CEO of the Massachusetts Lodging Association. “By adopting a more level playing field between short-term rentals and traditional lodgers, lawmakers made great strides toward a more fair and sensible system.”