New York is home to some of the best places to own an Airbnb property, such as New York City, Buffalo, and Woodstock. Before launching a vacation rental business, however, you need to check out New York short term rental laws to confirm that operating a non-owned occupied Airbnb rental is legal and to understand what licenses and procedures you'll need.
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New York’s Definition of a Short Term Rental
New York State does not have a precise definition of short term rentals. This is left to local authorities and jurisdictions. Nevertheless, a short term rental is generally considered the occupancy of a dwelling unit for fewer than 30 consecutive days by natural persons living outside the household of the permanent occupant in exchange for monetary compensation.
In New York, vacation rentals are governed by the New York State Multiple Dwelling Law (MDL). This law categorizes multiple dwellings into 2 classes for the purposes of use, including renting out on a short term basis.
The two categories defined by New York State Multiple Dwelling Law are as follows:
“Class A” Multiple Dwelling
This is a multiple dwelling that is occupied for permanent resident purposes including tenements, flat houses, maisonette apartments, apartment houses, apartment hotels, bachelor apartments, studio apartments, duplex apartments, kitchenette apartments, garden-type maisonette dwelling projects, and all other types of multiple dwelling except Class B multiple dwellings.
Occupying Class A multiple dwellings for less than 30 consecutive days by individuals who are not related to the permanent resident and who pay rent is inconsistent with the intended permanent occupancy. In brief, short term rentals are not legal in Class A multiple dwellings unless the host resides on site and other conditions are met.
“Class B” Multiple Dwelling
This is a multiple dwelling that is occupied transiently as a more or less temporary abode to persons or families who are lodged with or without meals.
This includes hotels, lodging houses, rooming houses, boarding houses, furnished room houses, lodgings, club houses, and dwellings designated as private dwellings but occupied by one or more families with 5+ transient boarders, roomers, or lodgers in one household.
In other words, short term rentals can be operated from Class B multiple dwellings even if the host does not reside on the property.
It’s important to note that for tax purposes New York State defines short term rentals as renting out for fewer than 90 consecutive days. In this case vacation rentals need to pay the same taxes as hotels.
The relevant chapter of the MDL applies to all New York cities with a population of 325,000+ citizens. The legislative bodies of smaller cities, towns, and villages can decide whether to adopt the provision of this law.
Starting a Short Term Rental Business in New York
The process of starting an Airbnb business in New York State is as diverse as the state itself. While state-level requirements are few and basic, things can get significantly more complicated at the county and city level. Most local authorities have imposed their own vacation rental regulations to augment the MDL and other provisions of the state.
When starting a short term rental business in New York, hosts need to take care of the following:
- Business registration: Many locations demand from Airbnb investors to register their business at the local level. You don’t have to form an LLC to operate a short term rental in New York.
- Short term rental licenses and permits: Applications can usually be submitted online and need documentation providing information about the property, the owner, and the operator. Most licenses are renewed on an annual basis and cost a few hundred dollars each time.
- Tax registration: You need to register with the New York State Tax Department to pay state sales tax. You might also need to register with local authorities for the remittance of sales and hotel occupancy taxes.
- Obtaining an EIN: You have to apply for an Employer Identification Number (EIN) from the IRS if you plan to operate your business as an LLC, a corporation, or a partnership.
- Zoning compliance: Some cities allow short term rentals only in certain zones (usually commercial areas) and prohibit them in others (usually residential neighborhoods). You need to confirm that owning a vacation rental is legal in your area.
- Building and safety compliance: Most jurisdictions have specific requirements about building codes and safety regulations related to the installation and inspection of devices such as smoke detectors, carbon monoxide detectors, and fire extinguishers.
- Safety inspections: Many cities inspect Airbnb rentals before they get licensed the first time or every time when their license gets renewed.
- Insurance: Some markets expect owners to have both a property damage insurance and a general liability insurance, which is covered by a good short term rental insurance.
- Required paperwork: Hosts need to submit various documents. The most frequently required ones show the property address, zone, and type and the owner’s ownership, residence, name, address, and contact information.
- Best practices for getting started: When becoming a New York Airbnb host, it’s important to review local regulations by checking the websites of county and city governments. If you have any doubts, you can contact them by phone or email and clarify all issues. In case laws are not your forte, it’s a good idea to consult with a local legal expert to make sure that your business is set on the right foot.
You have to go through all required steps and obtain all necessary documents before listing your property and starting welcoming guests. Otherwise, you risk running into major legal issues that can lead to hefty fines or even complete business closure.
Short Term Rental Licensing Requirements in New York
New York State does not require vacation rentals to be centrally licensed or permitted. This is done at the county or city level. Getting a local short term rental license requires submitting a number of documents that provide information about the property type and size, the property address and zone, the property occupancy, the safety regulations, and the owner’s name, address, contact information, and residence.
Licenses are typically issued for one year, after which they need to be renewed to continue operations. The fees are in the range of a few hundred dollars. Failure to run an Airbnb business with the required permit or license can result in major fines.
For a few years, New York has been trying to pass a bill that requires vacation rental property owners and the platforms that advertise such listings (like Airbnb, Vrbo, and Booking.com) to register with the state and provide regular updates on their activities.
The purpose is to help local authorities get a clearer understanding of the prevalence of short term rentals and their impact on local communities and housing demand.
It seems that the bill is getting close to being passed, so New York State hosts should keep an eye on future developments in this regard.
New York Short Term Rental Tax
Just like any other business endeavor, running a vacation rental is associated with paying multiple taxes.
New York State short term rental property owners need to pay the following taxes:
- New York State sales tax equivalent to 4% of revenue
- Local sales tax at a rate depending on the jurisdiction
- Metropolitan Commuter Transportation District (MCTD) sales tax equivalent to 3/8% of revenue, where applicable
- Local county or city hotel occupancy tax at a rate depending on the jurisdiction
- Rental income tax including federal, state, and local rates
- Property tax including county and municipal rates
The payment of all required taxes negatively affects cash flow for real estate investors. The good news is that hosts can claim numerous deductibles to reduce their taxable income.
New York vacation rental owners can deduct the following expenditures:
- Real estate and property asset depreciation (you can do a short term rental cost segregation study to maximize benefits)
- Mortgage interest
- Mortgage insurance premium
- Airbnb insurance premium
- Property tax
- Property management fees
- Cleaning and maintenance fees
- Accounting, legal, and other professional services
- Marketing and advertising expenses
- Furniture and appliances
- Guest supplies
- Utilities
- Home office costs
- Business-related travel costs
Before getting started, short term rental hosts need to understand and comply with all New York tax requirements. Meanwhile, they also need to learn about possible deductions to maximize tax benefits and enhance cash flow.
New York State Short Term Rental Laws by City
While large cities in New York have to comply with the general provisions of the MDL, state legislation leaves enough space for local authorities to introduce regulations that fit the specific situation of each city, town, or village.
Following are the vacation rental laws in the best New York cities for Airbnb:
1. New York, New York Short Term Rental Laws
As the most visited city in the US, with close to 9 million visits each year, New York City has enacted elaborate short term rental regulations. The New York City Administrative Code defines a short term rental as a rental of a dwelling unit or part of a housing accommodation within a building for occupancy of fewer than 30 consecutive days.
NYC legislation prohibits the following with regards to Airbnb rentals in Class A multiple dwellings which generally include residential buildings for permanent residence:
- Renting out an entire apartment or home for less than 30 days even if the owner or the host lives in the building
- The host not being present during guest stays
- Having more than 2 paying guests at a time
- Not offering free and unobstructed access to every room and exit to all guests
- Having key locks on internal doors
This means that in the Big Apple, in Class A multiple dwellings only hosted short term rentals with up to 2 guests are allowed.
In January 2022, New York City adopted Local Law No. 18, or the Short Term Rental Registration Law, according to which hosts need to register with the Mayor’s Office of Special Enforcement (OSE). This applies to Class A multiple dwellings, while Class B properties are exempted.
To apply for a short term rental registration in NYC, owners or hosts (who can be tenants) need to submit the following:
- Host’s name, phone number, and email address
- Property’s address and unit number (which must be the host’s address)
- Proof of identification
- 2 pieces of proof of permanent occupancy
- Portion of lease document if the host is a renter
- Listing information if available
- Statements that the host has read and agreed to a number of codes and regulations
- Payment of a non-refundable registration fee of $145
Violations to NYC Airbnb laws can lead to fines ranging between $1,000 and $7,500.
Hosts need to pay a total sales and use tax of 8.875%, a hotel room occupancy tax of 5.875%, and an additional hotel unit fee that depends on the daily rate of the property.
As expected, New York City has very strict vacation rentals laws, similar to other major cities in the US. Unhosted rentals and rentals of entire properties are altogether prohibited in residential buildings.
2. Saratoga Springs, New York Short Term Rental Laws
The City of Saratoga Springs is about to pass legislation that governs short term rentals in the local market with the aim of protecting the health, safety, and welfare of the community.
The proposed legislation defines a short term rental as an entire dwelling unit, a room, a group of rooms, or any other living or sleeping space within a dwelling that is made available for rent by guests for less than 30 consecutive days.
This includes any residential building, apartment, single-family dwelling, two-family dwelling, condominium, townhouse, guest house, cottage, cabin, or accessory dwelling.
Only owner occupied properties will be allowed to be used as short term rentals, which means that the dwelling unit is used as the primary residence of the owner and is where taxes are filed.
Moreover, all Saratoga Springs vacation rentals will need to:
- Comply with the occupancy limit according to the Uniform Building Code of New York State
- Be registered with the City of Saratoga Springs
- Have a valid fire inspection and permit record from the City Fire Department and the City Accounts Office
- Have a certificate of occupancy for short term rental use
- Have maintained sidewalks and walking paths and snow plowed off sidewalks and driveways if applicable
- Comply with all HOA rules and other pertinent laws
All owners will be required to obtain a short term rental license within 60 days of the legislation becoming effective by submitting the following documents:
- Owners’ names, addresses, phone numbers, and email addresses
- Proof of ownership including the owners’ names and the property’s address
- Completed, signed, and notarized affidavit statement that the property meets all state codes and has the correct number of carbon monoxide and smoke detectors, that exterior doors are operational, passageways to exterior doors are clear and unobstructed, electrical systems are serviceable, appliances are properly installed, and pools and decks are in good repair, that there are proper egress doors or windows, and that there is a 911 address number properly posted.
- Affidavit certification that confirms that the number of bedrooms and the number of parking spaces meet the standards
- Computer-generated site plans
- Proof of liability insurance acknowledging the use of premises as a rental
- Septic inspection report
- Fire inspection report from the last 12 months
- Property contact’s name, address, phone number, and email address
- Application fee of $1,000 per dwelling unit
- Acknowledgement that the owner and the property contact have read all regulations and will post and maintain the rental with the required notice
Licenses need to be renewed every 2 years.
Any violations to the new Saratoga Springs short term rental laws will be penalized by hefty fines (reaching $1,000) as well as the possible suspension or revocation of the license.
In terms of taxes, the city sales tax is 1%-2%, depending on the neighborhood, and the occupancy tax is 5% but is imposed only on lodgings with at least 4 units.
In brief, soon non-owner occupied vacation rentals will be illegal in Saratoga Springs, NY.
3. Albany, New York Short Term Rental Laws
At the moment, the City of Albany does not have short term rental regulations. Currently, the city is discussing the need to introduce related legislation because of the increasing number of complaints that have been filed since 2000.
Short term rentals are not even defined in the Unified Sustainable Development Ordinance (USDO). The duration for which a dwelling must be rented to qualify as a vacation rental is not specified.
Currently, Albany is talking about the top priorities in the Airbnb rental space, including noise reduction, elimination of trash problems, shutting down house parties, ensuring building safety, reducing the impact on the neighborhood character, and more. Possible tools include licensing, zoning, taxes, and other requirements for hosts and guests.
Albany has a combined sales tax rate of 8%, while the hotel occupancy tax is 6%. However, Albany Airbnb hosts do not really pay taxes.
While Albany vacation rentals can operate undisturbed at the moment, this might change in the future, and owners need to keep track of potentially upcoming changes.
4. Lake Placid, New York Short Term Rental Laws
In January 2023, the Village of Lake Placid and the Town of North Elba passed Law No. 1 of 2023 which significantly limited the vacation rental industry in the area.
In general, Lake Placid defines a short term rental as the rental of a whole or part of a dwelling unit to persons or entities for a period of less than 30 consecutive nights.
This includes any residential building, apartment, single- or two-family dwelling, condominium, townhouse, guest house, cottage, cabin, or accessory dwelling unit but excludes timeshare units, hotels, motels, bed and breakfast establishments, and school or non-profit dormitories.
Importantly, a hosted short term rental is one where the owner resides for at least 183 days per calendar year and is considered their primary residence.
The new law classifies 4 types of short term rentals including:
- Village Unhosted Short Term Rentals: These are prohibited in residential zoning districts. Moreover, the maximum number of days per calendar year for which an unhosted short term rental property (in other zoning districts) can be operated is limited to 90 days.
- Lodging Short Term Rentals: Properties located in the Gateway Corridor, Village Center, Old Military Corridor, Placid Gold LLC PD, Crowne Plaza Resort PD, Mirror Lake Inn Resort PD, or existing condominium and townhome developments may have a limited number of short term rentals within a building, depending on the total number of units. There is no limit on the number of days per calendar year for which a unit can be rented.
- Main Street Short Term Rentals: The use of street level street-front space as a short term rental is prohibited from #1 Main Street (Brewster Park) to #2693 Main Street (Town Hall). Properties with 3+ units must have one long term rental unit for every 2 short term rental units. There is no limit on the number of days for which a property can be rented.
- Hosted Short Term Rentals: There is no limit on the number of days per calendar year for which a property can be rented out on a short term basis if the host resides there for more than 184 days per year, this is their primary residence, and they stay overnight for the entire term of renting.
Lake Placid Airbnb properties need to have a short term rental permit, applications require:
- All owners’ names, addresses, phone numbers, and email addresses
- Signed and notarized affidavit certifying compliance with standards related to smoke detectors, fire extinguishers, exterior doors, passageways, electrical systems, fireplaces, and bedrooms
- Statement of the number of bedrooms that meet the standards
- Statement of the number of parking spaces that meet the standards
- Statement that the applicant has met and will continue to meet relevant standards
- Drawn-to-scale site plan
- Septic inspection report
- Owner’s or contact person’s name, address, phone number, and email address
- Payment of permit fee
Permits are valid for one year.
Violations of the Lake Placid, NY short term rental laws result in fines that can exceed $3,000.
Airbnb hosts need to pay a minimum combined sales tax of 8% and a hotel occupancy tax of 5%.
In sum, Lake Placid has strict regulations that virtually prohibit non-owner occupied short term rentals.
5. Buffalo, New York Short Term Rental Laws
The City of Buffalo regulates short term rental with an ordinance dedicated to this type of housing.
Buffalo distinguishes between 2 types of short term rentals:
- Non-owner occupied short term rentals: This is a dwelling that is owned and maintained by a person or agent who has legal authority to obtain a license to use the property for the purpose of a short term rental without living within the main dwelling rented or not sharing a roof in common with the property under question. These are not allowed without a special use permit that is subject to review by the Planning Board for recommendation to the Common Council. They are generally not allowed in multiple residential dwelling units such as apartment buildings, co-ops, condos, three-family units, and others.
- Owner occupied short term rentals: This is the rental of a dwelling unit for a period between 1 and 30 days where the owner is a resident of the property. These are allowed except in the N-4-30, N-4-50, D-IL, D-IH, D-OS, D-OG, D-ON, and C-R zoning districts.
Additional restrictions apply to properties located in local historic districts. Moreover, no more than 2 dwelling units can operate as short term rentals per building.
The owners of all Buffalo short term rentals need to obtain a short term rental unit registration certificate after providing:
- Valid identification
- Owner’s name, principal residence address, principal business address, and phone number
- Agent or property manager’s name, principal residence address, principal business address, and phone number
- Proof of lawful ownership
- Proof of residence, if applicable
- Completed and signed application
- Completed and signed affidavit of compliance
- Exterior and interior rental unit inspection conducted by the Department of Permit and Inspection Services
- Carbon monoxide and smoke detectors and fire extinguishers
- Shovel for emergency cases
- Diagrams for exiting posted in all bedrooms
- Emergency contact numbers
- Certificate fee of $1,000 for non-owner occupied and $500 for owner occupied short term rentals
Short term rental certificates are valid for one year. An annual fee of $400 or $250 needs to be paid for non-owner occupied or owner occupied short term rentals, respectively. Licenses are not transferable in case of change of ownership, and the new owner needs to get their own certificate.
Violations of the Buffalo Airbnb laws are subject to fines in the range of $500 per occasion. Certificates can be suspended and revoked too.
With regards to short term rental taxes, the minimum combined sales tax is 8.75% and the hotel tax is 3%.
To conclude, similar to other New York cities, Buffalo essentially prevents non-owner occupied vacation rentals.
6. Hudson, New York Short Term Rental Laws
The City of Hudson regulates Airbnb rental properties with Local Law No. 7 of 2020.
Short term rentals are allowed in Hudson only in one of these 2 cases:
- A resident of Hudson who holds a majority equity and voting interest may operate up to 3 short term rental units that have to be located on the same parcel where the resident resides
- A person who owns a dwelling unit in Hudson and resides in it for at least 50 days per year can operate it as a short term rental unit for up to 60 days per calendar year
As of 2024, Hudson introduced a new process for registering Airbnb properties that is done entirely online.
Submitting a registration application requires the following documents:
- At least 2 documents showing owner occupation for 50+ days per year including a notarized statement, driver’s license, or utility bills
- Documentation of prior year’s total number of rented nights or estimated number of available nights in the coming year
- SSN or EIN of the primary hosts
- Estimated nightly rates
- LocalGov account number
- Acknowledgement that the owner has read and understood the lodging tax recording, reporting, and paying process
The Hudson lodging tax is equivalent to 4% of total charges, and the minimum combined sales amounts to 8%.
Hudson short term rental rules basically make it impossible for out-of-state investors to buy an investment property for the sole purpose of renting out on a short term basis.
7. Kingston, New York Short Term Rental Laws
In 2021, the City of Kingston issued Resolution 85 to include short term rentals in the definition of hotels. According to the zoning statute, they are allowed only in the C-1, C-2, C-3, O-3, RF-R, and RF-H zoning districts.
To start a new Airbnb business, hosts need to obtain a special permit to be issued by the Planning Board. Getting a special permit requires the submission of various documents related to the property and the owner.
Afterwards, they need to register the short term rental with the City of Kingston Building Safety Department and the Ulster County Hotel & Motel Occupancy Tax. The occupancy tax that Kingston Airbnb hosts need to pay is 4%, while the minimum combined sales tax is 8%.
Moreover, similar to hotels, Kingston vacation rentals have to pay the following annual fees:
- 1-3 units: Base fee of $75 + $50 per unit
- 4-9 units: Base fee of $150 + $50 per unit
- 10-20 units: Base fee of $250 + $45 per unit
- 20+ units: Base fee of $400 + $40 per unit
While Kingston doesn’t explicitly prohibit short term rentals, it makes it challenging for new owners to get a permit.
8. Woodstock, New York Short Term Rental Laws
The Town of Woodstock passed Law No. 1 of 2019 to permit and regulate short term rentals.
Woodstock defines 3 types of short term rental properties:
- Short Term Rental Home: This is a supplementary business in a private home or habitable accessory structure where 1 or 2 bedrooms are offered for rent, with no public restaurant and no other commercial services. The owner must live on the property. Up to 2 guests per bedroom and up to 4 guests in total are allowed.
- Short Term Rental Establishment: This is a supplementary business in a private home or habitable accessory structure in which 3-5 bedrooms are offered for rent, with no public restaurant and no other commercial services. The owner must live on the property. Up to 2 guests per bedroom and up to 10 guests in total are allowed.
- Non-Owner Occupied Short Term Rental: This is a supplementary business in a private home or habitable accessory structure where the entire property is offered for rent for less than 30 days, with no public restaurant and no other commercial services. The owner does not live on the property. Up to 2 guests per bedroom are allowed. These can be rented for a maximum of 180 days per calendar year with no more than 26 weekends or parts of weekends included in the total.
Caps are set on both owner occupied and non-owner occupied vacation rentals.
Airbnb-style properties need to obtain an annual operating permit from the Building Department, and only the owner can register and get the permit.
A permit from the Woodstock Building Department requires the following documentation:
- Completed annual permit application
- Safety/egress plan posted throughout the rental unit
- Parking layout plan according to standards
- Garbage removal plan
- Designated host’s name and contact information for non-owner occupied properties
- Occupancy limited to 2 guests per bedroom and total maximum occupancy posted in the rental
- Copy of the registration with Ulster County
- Annual fire/safety inspection report
An individual can get a registration for one property only, and registrations are valid for one year. They are subject to annual fees.
Violations may result in permit suspension or revocation.
In August 2023, Woodstock suspended short term rental permit applications for a period of 6 months. There is no confirmation that applications are now open.
In terms of short term rental taxation, hosts need to pay a minimum combined sales tax of 8% and a hotel occupancy tax of 4%.
Similar to the rest of New York State, Woodstock makes it challenging for investors to operate non-owner occupied Airbnbs.
Bottom Line
New York State has very restrictive short term rental laws that prohibit non-owner occupied or non hosted vacation rentals in the majority of top Airbnb locations. This is expected considering the popularity of New York cities among tourists and the impact of the Airbnb industry on local housing markets.
Nevertheless, investing in short term rentals is still possible in some areas within the state. Interested investors need to check out local regulations before moving forward with buying an investment property to rent out on a short term basis.
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