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Do real estate or property taxes go up when you do airbnb?


#1

Our town raised our taxes 33% because we are doing AirBnb. Anyone else experience this?


#2

@kenkuhl. Some context would lead to a more valuable discussion. Country? Province or State? City or town? Did your new tax bill actually cite AirBNB or are you assuming? What percentage are non-AirBNB places facing? is this a stand alone or a room within your home?


#3

In the US no taxing jurisdiction handles residential properties based on an income approach valuation. Values could indirectly be going up if a location that AIrbnb rentals are impacting market value.


#4

No…


#5

It could be an owner occupied exemption vs non owner occupied. In our county, By renting out we lose the owner occupied exemption as the homestead after 72 days of rent. The property tax rate goes from 4% to 6% in property taxes plus an additional education imposed tax. The result is an increase of about 33% in Property Tax for renting.


#6

it could be a revaluation of property, Connecticut did that in 2017. Where are you located? for example here are answers for Connecticut : https://www.granby-ct.gov/sites/granbyct/files/uploads/revaluation_questions_and_answers.pdf


#7

Thank you! We happen to live, of all places, in Granby CT! We attended our Appeal hearing last night and were told our guest house (which is our detached garage with finished space) was reclassified as a “single family” home because we are “making money”! I am going to call my lawyer this morning!


#8

Brandt…Thank you, that has always been my understanding. I have been a real estate broker for over 40 years. I understand Homestead Exemption but we live on the property and rent bonus space over our garage! Is there any law you can point me to regarding how property taxes are determined in the US?
Thank you so much!

Ken


#9

No such thing exists. Property taxes are local by city, town or county, and in some cases, more than one.


#10

Thank you Susan that’s what I believe is well however, our taxes went up 33% and our local assessor said it’s because we’re making money on the bonus room over a garage. I think it’s bogus wrong and I’m hiring a lawyer!


#11

33% increase! That BS! CT has been having budget problems for years. CT has massive debt and flat economic growth. Years ago, when I lived there, they didn’t even have income tax. They sure do now. They are also talking about adding toll roads, additional gas taxes (which are already higher than most states) and raising sales tax (to 7.25%) and corporate taxes. They clearly are looking for every opportunity to get additional revenue and now seem to have targeted you (or at least your town is).

The towns (as in most states) have had cuts in their funding from the state and federal governments so they are trying to get creative in ways of increasing revenue. They say it’s because of “an increase in the demand on municipal paid services such as schools, police, fire, waste disposal and snow removal.” I don’t think you having a few guests has much of an effect on these services especially schools or snow removal. To increase your property taxes by 1/3 is outrageous!

What they don’t take into account is the benefit those guests bring to the town like spending money in bars, restaurants, stores, souvenirs, gas, etc. You’re actually helping the local businesses by hosting guests. I would be upset, too!


#12

This is fascinating, please do keep us updated. I live in TX where there is no income tax so property taxes are always going up, up, up. Mine went up but part of it is due to adding onto my home to add an Airbnb bathroom. It’s the sq ft, not the Airbnb that caused the tax increase.

I’m curious, what tipped them off? Did you pull a permit to do renovations to the space or are they running the airbnb listings through the property tax computers? Here the state tax people and the local appraisal district are separate entities.


#13

@kenkuhl - they may have classified it as “commercial” instead of “residential” since you are “making money on it”. Your appraiser may just have been very inarticulate.


#14

When they work for the government, they are an assessor, not an appraiser, here in the States.


#15

Yes, In Hawaii my property taxes went up for having TVR space. The transient accommodations tax just went up so now I am passing it on to the guest, before I just paid it. It adds 14.25% onto the room rate.


#16

@smtucker - you are correct. I guess I was inarticulate, too!


#17

According to this article today on AOL, Connecticut already has the 6th highest property tax and 3rd highest per capita property tax collections

https://247wallst.com/special-report/2018/01/31/states-with-the-highest-and-lowest-property-taxes-3/10/
Hawaii the lowest @konacoconutz


#18

Hey everyone! Thanks for your feedback. We are acutely aware of the issues CT has re: taxes. I sent this out to see if any town or state has changed the appraised or taxable value of their home after it was placed on AirBnb.


#19

it is residential. It is just that it is not a garage now. It is a finished separate living unit.


#20

You are not likely to win this without a big fight. Consult a local Real Estate Attorney. Your outbuilding was taxed (lightly) as a garage prior… to the reassessment. During the 2017 reassessment, the city determined that it was no longer a garage…rather, that the garage had been upgraded into a full residential living space. They actually visit the property and take photos. Yes they may have cross checked with the online listings to find all the extra living space. I deal with a similar issue, although here they call it an “ADU” = Accessory Dwelling Unit, or FROG ( finished room over the garage ). I greatly sympathize with you, and it may be that even if you pull it off of Airbnb, it will not change the higher tax decision that the garage has been upgraded into a residential unit. And it is probably based on the SF changing from garage into a residence. Good Luck. It is always hard to fight city hall.


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