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Hello fellow Airbnb Hosts,
Having created an Airbnb Hosting online course called AirbnbSecrets, I always get many questions about the legal aspect of Airbnb so I’ve just wrote a blog post about this subject. Check it out on airbnbsecrets.com. I hope this helps! 
Great idea Beach Guy. Marijuana is getting legalized in many US States as we speak but I’ll let you take over this one.
Airbnb is in 190 countries and 35 000 cities in the world and each one of these places have different rules and laws about short term rental. If you read my blog post that is intended for a worldwide Airbnb Host audience, I don’t think you would be comparing drugs & rape to being an Airbnb host. The fact that many hosts have been hosting illegally on Airbnb is what lead to legalizing the service in many cities including Paris, London, Washington DC, San Francisco, Chicago. We live in a time of change. Technology is changing our world AND it’s forcing governments to change our laws. Considering all of this, I believe it’s everyone’s personal choice to choose to host legally or “illegally” on Airbnb and I beleive people need to be informed before making such a choice. Since I run 4 legal Airbnb listings, I’ve decided to share my Airbnb knowledge to help new Hosts make a clear choice before engaging into any hosting activity : legally or “illegally”. This is what this article is all about. I just like to write “catchy titles”.
Good day, enjoy the beach!
I saw you didn’t approve my comment on your blog, but I think it’s vital to address a claim in your article:
Governments collecting money via Airbnb makes Airbnb legal.
This is simply false, at least in the United States. Talk to any lawyer. It may be hypocritical, but federal and local governments have a clearly established legal precedent for taxing illegal income. Their collecting taxes does not implicitly condone the activity. There are articles describing this situation in Chicago, for instance: although taxes are collected, the vast majority of Airbnb apartments are operating illegally because hosts lack the proper licenses. Furthermore, many cannot obtain the licenses because of local zoning ordinances.
You spread dangerous misinformation.
“civicduty” : Dangerous misinformation?
I tell my readers to call their city to see if they can get a legal permit. I tell them to inform themselves about fines regarding short term rental. I tell them to declare their Airbnb revenue and to inform themselves about short term taxes. Then I inform them about the possibility of renting long term to avoid getting in trouble with short term rental regulation.
How dangerous can this “misinformation” be?
To put the word “dangerous” in perspective, first, I don’t know anyone who died from Hosting on Airbnb and second, I don’t know anyone who went to jail for hosting on Airbnb (yet).
So these 2 “dangerous” possibilities are pretty much illiminated.
That said, you do have good point about zoning permits, and I will re-phrase my article this way based on your contribution to this post:
So what happens when Airbnb gets legalized?
Well, most of all, zoning permits & taxes.
Yes. Governments collecting money via Airbnb contributes to make Airbnb legal.
You have to remember that Airbnb manages all payments for the Hosts. So once the service gets legalized on a territory, Airbnb manages all sorts of taxes on all transactions for all Hosts. Hotel Tax, Tourist Tax, Short term Tax, Sales Tax and so on and so forth. Also, Airbnb Hosts usually have to apply for permits to make sure that municipal zoning allows short term rental in their area. Legalization is a great thing for all parties involved – Governments, Cities, Hosts and Airbnb - because everyone is making:
Money!**
Voilà.
And Beachboy, I’ll change one word in the title just for you:
4 Tips For Anyone Considering To Host On Airbnb “Illegally”
Thanks to you both for your input.
Hi Billy,
I’m also using Airbnb legally even if Airbnb hasn’t been “legalized” in Montreal yet. Meaning they do not collect taxes in Quebec on the platform for the moment. Meaning that (as mentioned in the post) any Airbnb Host in Montreal using Airbnb could receive a “Hotel Tax Bill” at any time. But the reality is that most Hosts do not know this information. That’s why I’ve created this post.
The legal aspect of Airbnb is a question that gets asked over and over and over again by new Hosts. [And even Airbnb is unclear about this subject on their own website][1]. You also have to remember that it is because thousands of people list their place on Airbnb “illegally” that it is forcing governments to change laws and to legalize this service in the first place. If no Host had ever taken this “illegal” step, there would be no legalization actually, there would be no Airbnb. Because if you do your research, you’ll realize that the Airbnb founders were actually renting “illegal air mattresses” in San Francisco when they first started the company in 2007. Yes. That’s how Airbnb got started. “Illegally”.
Fortunately, we live in a time of change and Airbnb is part of what we call the sharing economy movement. A movement that is spreading worldwide because the internet is changing the world. And if you read my blog post, what I’m really doing is recommending people to do their “Airbnb research” before hosting on Airbnb. I’m telling them to call their city to find out the rules about short term rental. I also mention that Hosts can be charged all taxes related to hosting short term, that fines can be involved and that there’s even an alternative: long term rentals via Airbnb.
We’re all adults and my readers can make their own decision based on their own research. So to answer your question: “When someone who uses your guidance gets caught, and suddenly finds the State and Local governments imposing fines, and collecting back taxes and penalties, are you going to act as their attorney?”
Why should I act as an attorney when I’ve given them useful information to make their Airbnb research so that they can make a clear decision about hosting on Airbnb? I am not an attorney and I’ll never be one. And I do not know any attorney that knows the laws of 35 000 cities in the world.
If you have any contribution to make to this post that you think can empower new Hosts form all around the world to make such decision, I’d be glad to share it.
[1]: https://www.airbnb.ca/support/article/376
I can recommend a great book! It’s called “You Are Going to Prison” by Jim Hogshire. hahahaha
I notice my comment on your site wasn’t approved either. I was surprised you’re promoting Illegal behavior.
The interesting part is you didn’t recommend for the hosts to become involved in the grass roots movements going on in the different cities. Airbnb is creating campaigns in different cities.
In NY, the city is doing sting operations. And not only do you get fined but you will be evicted. So not that simple. I have written a few posts about Airbnb and NY legal issues. You could read the posts here:
I’ve just revamped my blog last week and replies to comments were put on “manual mode”. I’ve just asked my programmer to put your message contribution on automatic mode (job done!) so that I don’t have approve your response on my Blog each time (Evelyn and CivicDuty check it out- your comments were approved : http://www.airbnbsecrets.com/4-tips-for-anyone-looking-to-host-on-airbnb-illegally/#comments_5196)
That said, this topic is obviously a sensitive one and that’s why I decided to write this article. I would never try to hide your comments for the simple reason that this is a great discussion that we are having here and new hosts reading this exchange of thoughts will be able to make a clear decision about Hosting on Airbnb legally or “illegally”.
As I responded to your message on my blog, I am not encouraging people to Host “illegally” even if I have done it in the past myself without knowing it. You have to know that I’ve listed my place on Airbnb because my realtor suggested to list it on this website while my home was for sale. Back in 2012, Airbnb wasn’t that known in Montreal and I didn’t know anyone who was using this website. It took me 2 years to learn that short term rental is regulated differently then long term rental and that my listings was actually “illegal”. Fortunately, what I didn’t know, is that my municipal zoning was also allowing short term rental in my area. All I had to do was to take a permit for it.
So this blog article is really meant to educate new hosts on doing their research first and to educate them on what are the possible outcomes of Hosting “illegally”.
As said in the article, it’s the fact that hundred of thousands of people have hosted on Airbnb “illegally” that is forcing governments to legalize Airbnb in the first place. While we’ll never know the exact percentage of “illegal” listings on Airbnb, most people list their place on this website without doing any research first. So all I’m sharing is information that I wish someone told me when I got started on this website because I believe this information needs to be shared to empower new hosts. So thanks for sharing your links Evelyn, I’m sure your imput can help some NY Hosts.
Thanks Billy_Bob. I do believe I’m a great guy. My intentions come from the heart. I want to help.
I also love driving.
And the speed limit on Quebec’s highways is set at 100km/h (60MPH for my American friends).
Meaning that anyone who drives over 100km/h is “illegal”.
But have you driven on a highway lately?
I have and let me tell you that no one drives at this speed.
Most everyday folks drive at 105, 110 some even go up to 120.
But why would any soccer mom with 2 kids or grampa on his way to the mess ever challenge the law this way?
2 reasons.
1 - They know it’s tolerated by the police.
2- They also know the outcome.
In Quebec, 99% of the cops won’t even bother arresting you unless you go over 120km/h on the highway. And even if they did, getting a ticket for driving at 120 km/h won’t send you to jail. It costs about 100$.
So why does this have anything to do with Hosting on Airbnb?
Well, it’s the exact same thing.
If you are a new Airbnb Host who can’t host on Airbnb legally and you are considering joining the sharing economy movement that is empowering everyday people all over the world, you need to know 2 things before choosing to host on Airbnb “illegally".
1- Is Airbnb tolerated by your local authorities?
2- What are the outcome of hosting on "Airbnb illegally” if it’s not tolerated.
Based on that, you can make a clear decision about going over 100km/h on Airbnb.
Do you realize that if the tile of my post was “4 Tips On How to Host on Airbnb Legally” we would never have these discussions? Do you realize that it is that fact that Airbnb is considered “illegal” that has given so much “free press” to Airbnb around the world making this service more and more popular, leading to legalize it in many countries? And do you realize that our discussions will help many new Hosts make a clear choice on this subject?
I do.
And I wish I read such thread before choosing to host on Airbnb.
I think you sound a little argumentative, and I also think your blog post isn’t written very well. I really don’t understand what you’re trying to accomplish here.
You are right Konacoconutz. Consider this my last argument. I’ve covered everything I had to say on the subject. This is my first blog article. It might not be as well written as the stuff you write but like anything, I’m sure I’ll get better as I write more these articles. ciao for now. D
A friend of mine got busted by doing Airbnb illegally (and in Montreal). I was surprised because she seemed like a straight-up person, but the other condo owners in her building turned her over to the provincial tax people.
I hate to say this, but there is no way people in Quebec should be doing this illegally. (I reported my condo to the provincial authorities immediately.) Your argument about speeding doesn’t really make sense. I’ve been caught speeding and the fact is there is no “system” to it. That’s how the SQ want it–they want to keep Quebecers guessing, which means most of us will slow down when we know there’s a chance we’ll get caught.
Quebec Revenue bureaucrats are the last people you want scrutinizing your life. (For American readers, they are like the IRS before things started getting fixed there.) I had a tax problem, not of my making, but of the office paying me, and the tax people went after me as though I were a criminal. So I can just imagine what they do with the real ones. They will do audits and flag your tax account for years! My friend was really, really upset that her neighbours turned her in, but honestly, she should have met them halfway. I have offered my place at a cut-rate price for people in the building…not on an ongoing basis, but occasionally as a way of keeping the situation sweet. I also don’t offer the building’s amenities to guests because I think the gym and the deck and the hot tub should remain private and for owners only.
Another problem is that renters themselves are renting out rooms on Airbnb. If a tenant of mine did that, I would throw them out. Sorry, but you have rented my space to live in, not to profit from. The landlords are the ones on the hook if things go pear-shaped. If a building burns and there are fatalities, are the persons harmed going to sue the original tenant, who is probably renting because he/she can’t afford to own, or the person with the assets, the owner the building him or herself?
I probably shouldn’t criticize, but there are people in Montreal who rent out one bedrooms, in high rises, furnish them all the same–they all seem to be IKEA clones (you can tell by the repetitive furniture and artwork)–and then manage 6 or 7 as a way of making a living. The comments reflect the fact that the guests never actually meet these managers. The units are just left open, with the keys inside, and the guests take it from there.
A couple stayed with me last week and they had this experience in Toronto. By contrast, I met them at the metro (they seemed a bit anxious about finding me) and then talked to them about the city, gave them ideas about where to go and what to do. We’ve made arrangements to possibly swap homes in the future, since they loved Montreal so much. They actually complained about their Toronto experience because they said they felt adrift, which I totally get.
I know that these people are allowed to manage multiple units, but it seems to me it defeats the purpose of Airbnb. (They also undercut on price, which is annoying.) Airbnb was supposed to be a place where you could rent from real people who live and know the area. That’s the whole idea behind the “sharing” economy. But now there are companies doing this–renting out multiple units–and making them look exactly like hotel rooms. I mean, I suppose if the market is there they have a right to pursue it, but really, this wouldn’t be an experience I would want. I would just book a hotel instead.
I’ve booked two Airbnb places for the coming Christmas holidays and I’m interested in how the experience is going to go. One place looks genuine, but the other looks like it comes from a multiple manager. (I only booked because I need a place to transit for one day.) The multiple manager got back to me immediately and told me I needed to come at a particular time since he was sure he would be celebrating the holidays on the beach on the two days (coming and going) that I booked. Not exactly hospitality central.
Oh well, apologies for the long rant…but I agree with the posters on this thread. You should always go legal.
It’s not just a criticism of your writing style, which could stand improvement. It’s how you have oversimplified this matter, have not really researched it thoroughly, make a bunch of misstatements and then come around to a host forum trying to promote yourself as an expert. I really don’t know where you are coming from.
I totally agree with every word you say. Thanks for expressing it so well. In Canada does Air send you what we in the States get? A 1099? This is income gained from your rental through the years and then reported to the IRS. So you better be keeping good records and receipts so that you can write off these as business expenses. Horrific to have a neighbor turn you in to the tax authority. Why wouldn’t you just go to the neighbor first and see if there is anything that can be done? I’d much prefer that than the nightmare you describe here.
I can’t remember if it was on is forum or the other one, but I think I had shared that while I have been an Air host for five years, almost since the beginning, I would never book an Air rental for myself while traveling! I just recently visited Seoul and Korea where my twin sons are university exchange students. I was only interested in staying in a hotel. It’s reliable, consistent and in the business of being a hotel.mi got a great room in Seoul ten minutes from my son’s university for $35 US per night. In Japan, I paid a little more… $65. But no cleaning deposits, security deposits or anything else that starts to escalate the price per night. Right now my son is living in what’s called a goshiwon, for $13 USD per night. Basically like a small hotel. He gets free everything, wifi, fridge and even laundry service! You leave your laundry outside your door and a guy comes and gets it, washes, dries it and leaves it clean and folded! I bet there are very few Air hosts in Seoul who do that! Oh, also there’s free rice and kimchee available in the kitchen every day… So there are alternatives! I would only stay in a hotel when traveling myself!!!
The issue about turning people in is tricky. On the one hand, I wouldn’t want strangers wandering into my building all the time either…but then what can one do about it? If this woman had been doing things honestly, there would not have been a problem. Her neighbours would have turned her in and then what? She’s already doing things legitimately, so there goes their argument.
My building, luckily, is zoned for light industry, so from a zoning point of view, I’m good. Even if my condo neighbours complained, I would be covered by that clause and by the fact that I’m registered. However, I still try to rent to families as much as I can and hope that everyone will be tolerant. But to not report the income if you have a place listed on Airbnb, is dumb. You are inviting scrutiny by putting an ad up.
It should begin with a conversation with the offending host before the turn in.
Agree, a host who buys a block of commercial units and rents them on Air is way different from someone who just has a studio for rent in the back of her property… that type of host is pretty innocent.
For instance, if it were me, I would much prefer they come and talk to me and I’d even stop doing Air before wanting to get turned in to a tax authority, that’s so cruel. Maybe the woman didn’t’ know better?
Who knows, Kona, maybe that had spoken to her 100 times. Maybe here guests were loud, a nuisance - we don’t know. But as Irene said - the problem isn’t that a neighbor turned her in - it was that she wasn’t paying taxes. I didn’t either, initially, being unaware, but I got caught up right smart quick. My husband and I were talking about this today - if you advertise your place, book a tax agent (whatever they would be called), you’ve set yourself up.
I contend (and I know there are those that disagree) that ‘air’ could at least have us fill out our own tax rate, and the tax could be calculated and the amount published along with the price - even if Air doesn’t collect it - they could make it appear very legit and upfront to the guest. I was looking into booking my place on booking.com - and they have that - and will note on the listing that 13% will be collected for taxes. So the hosts don’t have to bring it up later. (now the taxes are rolled into my price). I did notice on one ‘air’ type listing that the price was in bold red, and in tiny print underneath, and additional $125 cleaning fee would be collected at check-in!!! Yoikes!!!
As far as hotels now listing on ‘air’ - this is what happened on ebay - in the early days one could purchase a box of used kids clothes from another mom for a bargain - now it’s all regular retailers. The same may be happening with ‘air’. In my area there are a few rooms that are actually hotel rooms but the ad makes it look like they will have a personal host.
I can appreciate what you’re saying.