Washington Law Short-Term Rentals: The Laws Governing Short-Term Rentals In Washington

Short-term vacation rentals offered online have been a topic of discussion for a while. Even though the laws governing short-term rentals are still relatively new, several guests and operators are only now becoming familiar with them.

Short-term rentals are not a huge problem for areas in Washington State (or elsewhere) without a thriving tourist industry, and those local governments often don’t have rules regulating them. However, local governments that receive a sizable influx of tourists or temporary visitors either have restrictions in place or are thinking about doing so.

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Any person who operates a rental property via Airbnb in Washington must get a state business license and register their property with the Washington Department of Revenue. Additionally, owners of properties used for short-term rentals are liable to state and municipal taxes.

Taxes on businesses and occupations (often known as B&O taxes), municipal lodging taxes, and various other civic levies are included here. It is important to remember that the rules and regulations governing short-term rentals in the state of Washington may vary from one city to the next.

Laws Governing Short-term Rentals In Washington

The number of units one operator of short-term rentals is permitted to operate is restricted under the city’s short-term rental ordinance. A single individual, a married couple, a group of persons, or a business, such as an LLC, can act as the operator. You must provide the addresses of specific units in your operator license as part of the licensing procedure.

Most short-term rental business owners may manage their home residence and a separate property where they don’t reside. An attached or detached accessory dwelling unit (ADU or DADU) or an “in-law” apartment within a larger housing unit may serve as the main unit.

As for taxes, operators of short-term rentals are responsible for paying all relevant local, state, and federal taxes unless the platform pays them on their behalf. This includes any occupancy, sales, lodging, and other levies that the owner or manager of a hotel or bed and breakfast must pay in the region where the short-term rental is situated. Any occupancy, sales, lodging, or other taxes, fees, or assessments that a short-term rental operator is required to pay must be collected and sent to the proper authorities by the short-term rental platform on behalf of the operator.

Permits and licenses for short-term rentals must be granted for one year, and the effective date of the permit or license must begin running from the day it was issued. Both the permission and the license need to be renewed every year. In addition to complying with the criteria applicable to this chapter, the following conditions for renewal must also be satisfied:

1. Confirmation that the Washington State Department of Revenue has received payment in full for all lodging taxes owed for the current year.

2. The yearly inspection has to be scheduled, and the owner or an authorized representative is responsible for doing so.

Although many cities have stringent laws, a number of cities and municipalities are much more flexible with their rules. Some municipalities have regulations that make it possible to rent out a whole home on a short-term basis for up to 27 or even 90 days.

Investing in short-term rentals is the best way to generate real estate money. On the other hand, as an entrepreneur, it is your responsibility to find out how to comply with these regulations while still making a profit in the market for short-term rentals. So, to get past the regulations that apply to short-term rentals, here are three pointers:

Create A Name For Your Company

Establishing oneself as a legitimate company is the first step in evading compliance with these rental restrictions. There is a significant distinction between establishing oneself as an individual and doing so in a company’s capacity, although this concept may seem absurd to certain individuals.

Look Around For Real Estate Investment

You may put a rental property in your company’s name and then rent it out to tenants. By registering your accommodations under your firm’s name, you can list them on platforms like Airbnb without violating any laws or ethical standards. You must provide the name of an individual who resides in the apartment. If you subsequently offer the home on a website, each visitor is considered an occupier of the property.

Become A Legitimate Company

The second stage is obtaining all essential licenses and registering. To legally operate a business in your state, you will need to register your company as either a limited liability company (LLC), a stock corporation (S corp), a corporation (C corp), or another kind of entity. In addition, you will be required to get an EIN and truly transform your business into a genuine one.

Don’t Let The Cat Out Of The Bag

Since you are now aware of how to circumvent the legal obstacles associated with short-term rentals, the next significant problem you have is ensuring that you do not screw this up. You shouldn’t go to the property manager or the owner of the property and inform them that you are considering renting out the property since this is the one thing you shouldn’t do. You are setting yourself up for failure by doing that, and you will only end up hurting yourself.

Instead, you could tell them that you run a business out of your apartment and that you often have business guests. You must refer to them as “my clients” rather than “your clients” since, in essence, they are the latter. Remember that everyone who signs a contract to stay in your apartment using your firm’s name is considered one of your visitors or customers.

As a last piece of advice, practically all of the websites on which you will list the apartment don’t care whether you own it or not, and they never inquire. All they are interested in is confirmation that you are within your legal rights to occupy that property with other individuals.