Proposed 10% tax on short-term rentals closer to becoming state law Washington State

[Binary]

Thank you for responding to this issue. I agree with what you have stated. I think this tax does not make sense.

[Spark]

@jaquo

I’d really like to see facts and figures regarding the “people are pushed out of houses that had traditionally been in the long-term rental market” thing.

The phenomenon does exist - I’ve seen it in Victoria (Vancouver Island, not Australia) – where friends have converted their one-time rental suite to an Airbnb.

The example cited in this thread – it isn’t about “everywhere” or “all areas” – it is specific to Washington State, USA, and even within the state, the tax is not statewide. The legislation empowers local government to implement an excise tax in their local community if they believe that local circumstances call for it, which may well be the case.

It is certainly beyond the capacity of someone in Canada or Mexico or Australia to determine whether the local residential real estate market in Port Angeles, Washington or Bellingham or Spokane has been negatively impacted by STR.

[Spark]

@Binary

Thank you for responding to this issue. I agree with what you have stated. I think this tax does not make sense.

You do not even know yet whether the tax is going to be implemented in your location by your local government. This is empowering legislation, and will (after it is passed) be implemented by those local governments who chose to go there.

It may well be that you are correct and it is not needed in your local community. However, there may be that it is needed in other communities in Washington State. STRs do reduce supply of family housing in some markets – an example is the closeby city of Victoria, British Columbia – visible across the Strait of Juan de Fuca if you are standing on the northern shore of Washington’s Olympic Peninsula facing Canada.

An excise tax does not tax your income. An excise tax is a sales tax, charged to the consumer at point of purchase when the consumer pays. In the case of Airbnb, that means guests will be paying Airbnb when they book. This means that people from all over the world will be helping to pay for roads and libraries and firetrucks in those communities that have this tax – shifting the burden away from local people like you (who like most people in this world, are often heard complaining about paying local taxes).

[Binary]

Thank you Spark for your feedback. Yes I stated that this was a Washington state bill being proposed in my post. The legislation empowers local government to implement an excise tax in their local community if they believe that local circumstances call for it. Who makes that decision and how will they implement this. Unknown in the Senate Bill at this time.

[muddy]

[quote=“jaquo, post:21, topic:60475”]I’d
really like to see facts and figures regarding the “people are pushed out of houses that had traditionally been in the long-term rental market” thing.
[/quote]

I don’t have facts and figures, but I can assure you this is true in some places, especially areas that have a strong tourism market. I have lived in my Mexican town for about 20 years and it used to be easy to find a place to rent for a reasonable price. Little by little all the older, but perfectly decent casitas either got reno-ed in order turn them into tourist rentals, or razed to build big fancy places to str. Many people who work here commute from other towns because it is no longer possible for locals to find reasonably-priced rentals.

I saw this starting to happen 16 years ago, and while I had a reasonably priced rental at the time with nice landlords who wanted me to stay, I knew at some point that rental situation would end (like if the owners sold the place, which they eventually did), and bought a lot and had my house built. Had I not done that back then, there is no way I would be able to find a place to rent, or even a lot to buy, that I could afford.

And even 16 years ago, when I bought my lot, it was getting difficult to find a place to rent year-round. There were lots of places for rent in the summer, when it’s hot and humid and tourism was low, but come Nov., landlords wanted tenants to move out so they could make big bucks renting to tourists. I just happened to be lucky then in that the place I was living had owners who weren’t interested in profiting- they came down for a month a year on vacation, during which time I had to go live and sleep at friends’ places, and the rest of the time they just wanted someone in there who took good care of the place and attended to any needed maintenance or repairs, rather than a string of tourists.

[Xena]

@Spark

So – Airbnb hosts in Washington State are not allowed to deduct related business expenses
the way other tourism businesses and other landlords are?

I’m a host in Seattle. Yes, we can deduct our expenses from our federal income tax. We don’t have a state income tax in WA. AirBnB collects the occupancy taxes from our guests so I don’t have to manage or think about the taxes guests pay. I don’t the 10% tax, if it passes, will directly have a negative effect on my hosting. I’m an on-site host so I favor more regulations.