Every summer, Jersey shore towns like Margate, Ventnor & Longport fill up with tourists. Local populations often swell to twice their normal size. Downbeach is quite a popular vacation destination. While some rent by the week, many rent by the month or full summer season. Could a new vacation rental tax in New Jersey pose a threat to Jersey Shore tourism? Some think so.
What is the New Vacation Rental Tax?
This past summer in July, the New Jersey legislature passed new state and local taxes geared toward rental properties. The new vacation rental tax called ‘Transient Accommodations Tax’ applies to all bookings done through web-based companies like Airbnb or VRBO, and when working directly with a homeowner.
The NJ vacation rental tax can add 12-14% fee on top of what renters normally pay.
This NJ vacation rental tax was originally created to level the field between hotels, motels and B&B’s…..with online upstarts like AirBnB and VRBO.
New Jersey Shore Rentals Coalition
A group has formed to try and repeal this new vacation rental tax. It’s called the New Jersey Shore Rentals Coalition. The group is made up of vacation homeowners hoping to convince NJ legislators how the tax will hurt local tourism.
When tourists pay more to rent a property, that means less spent in the community. Worse yet, some may look to other, cheaper destinations.
How to Avoid Vacation Rental Tax
For now, the so-called ‘transient accommodations tax’ only applies to rentals transacted thru companies like AirBnB and VRBO….and homeowners that rent out their properties WITHOUT the help of a real estate agent.
Good News: vacation rentals handled with a licensed real estate agent do not have these additional taxes.
So, for the foreseeable future, it’ll be cheaper to book your next vacation rental through a real estate agent.
If you own a Jersey Shore home, consider hiring a NJ licensed real estate agent to handle your rentals. It’ll save you time, money, and hassle.