Investing in Jersey Shore real estate pays off big time during the summer. Thousands of people leave their homes in other areas to spend the entire summer at the shore. Our beach cities (Margate, Longport, Ventnor, etc.) see populations soar at that time. Unlike other vacations where you spend a week or two at a specific destination, Jersey Shore vacationers tend to rent for the season. That means two to three months at a time. Governor Murphy recently signed a law that protects private homeowners from a Jersey Shore rental tax that was enacted last year. That’s great news for anyone who rents their home out during the busy summer season.
Jersey Shore Rental Tax Update Protects Private Homeowners
Last year, the legislature enacted the Transient Accommodations Tax. This required as much as a 17% tax on any rental of less than 90 days. The law was meant to create a more level playing field between local hotels/motels and online rental companies like Airbnb and Vrbo. Hotels and motels pay a sales and use tax as well as an occupancy fee (the cost of which, they pass on to their guests). Online companies weren’t subject to those. The new 2018 tax law changed that. Unfortunately, it also included private homeowners in the mix. That meant charging their renters several hundred dollars more per week. That affected their client base severely.
After months of complaints from local homeowners, government officials listened. Several Assemblymen and women submitted new legislation (A-4814 and 4520). In this new rental tax bill, private homeowners who advertise their rentals and collect rental fees themselves (instead of going through a third party) are no longer required to pay the Transient Accommodations Tax on short term rentals. Governor Murphy signed this bill earlier this month. Now, private Jersey Shore homeowners who advertise through word-of-mouth, private signs, and local ads won’t be subject to this tax. However, if you list your property on an online site like Airbnb or Vrbo or with a travel agency, you will have to pay the Transient Accommodations Tax. This alleviates some of the stress private homeowners experienced from the previous rental tax bill. Thank you, Governor Murphy!