Seattle passes a tax on short-term rentals, regulations to come next

Seattle passes a tax on short-term rentals, regulations to come next

On Mon., Nov. 13, the Seattle City Council voted to impose a tax on short-term rentals of $8 per night for a room and $14 per night for an entire unit. This tax will apply to rentals of fewer than 30 consecutive nights on platforms such as AirBnb or VRBO.

The Seattle Hotel Association has supported short-term rental regulations since the inception of these unregulated rentals, and this tax ordinance is an important win.

The initial proposal was for a $10 per night tax. The Council amended the legislation to establish a different rate for rooms and for entire units such as houses, condos or apartments. The tax is expected to raise $7 million, and revenues are directed to equitable development projects and affordable housing. It goes into effect on Jan. 1, 2019.

Councilmember Rob Johnson asked his colleagues to refer this tax bill, as well as a regulatory bill slated for a vote, back to the Planning, Land Use & Zoning Committee for further discussion. While the tax bill went forward, his colleagues voted for the regulatory bill to go back to committee.

The regulatory legislation still to be considered will establish licensing requirements for both operators and platforms as well as health, safety and insurance requirements. It also limits the number of units per operator. The committee will consider proposed amendments, including several which address the “grandfathering in” of existing short-term rentals, with proposals seeking to expand or to shrink exemptions.

The regulatory bill is expected to be taken up by the committee on Nov. 27 or Dec. 5. A public hearing will be held on a land use bill on Nov. 27, which rounds out the regulations. A full council vote on both is scheduled for Dec. 11.

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