Short-Term Rental Tax Details For Martha’s Vineyard Vacation Rental Properties

Short-Term Rental Tax – The dust is beginning to settle on the new short-term rental tax on Martha’s Vineyard vacation rentals for 2019. The Massachusetts Department of Revenue, which will oversee the new tax implementation and collection, has weighed in, and clarified most issues.

Short-Term Rental Tax Rates Now Set

All short term rentals in towns and cities across Massachusetts will now have a 5.7% state tax, for leases created from January 1, 2019 forward, and that have check-ins beginning on July 1, 2019. It was the local rates and some other regional taxes, where uncertainty was left in the rapid tax passage at the end of 2018, during the end of the year holiday week. The Department of Revenue has now cleared up much of this confusion. Here’s a good round-up from the DOR.

Short-Term Rental Tax Rates For Martha’s Vineyard Vacation Rentals

The DOR said that for now, towns will adopt their existing lodging tax rates as their short-term rental rate. The DOR also clarified that the towns on Martha’s Vineyard must opt-in to the Cape Cod and Island Water Protection Fund. That fund adds another 2.75% to the short-term tax rates. So for now, none of the Vineyard towns have opted-in to this added tax.

New 2019 short term tax rates by town (including state and local taxes):

• Edgartown 9.7%
• Chilmark 9.7%
• Oak Bluffs 11.7%
• Vineyard Haven 11.7%
• West Tisbury 5.7%
• Aquinnah 9.7%

Community Impact Fee

The only open question remaining for now, is the so-called Community Impact Fee. The new short-term rental tax law allows towns to impose up to 3% on any landlord who owns two or more rental properties in the same town. That issue will decided town by town, and we have not yet heard anything definite on this on Martha’s Vineyard, however, this would only potentially affect a hand full of vacation rentals.

Who Pays The New Short-Term Rental Tax?

The new short-term rental tax is paid by the rental customers. And for 2019, that’s going to boost the cost of Martha’s Vineyard vacation rentals up almost 10% in Edgartown, Chilmark, and Aquinnah, while almost 12% in Vineyard Haven and Oak Bluffs. The tax impact in West Tisbury is just under 6%.

Now that the short-term rental rates are set (except the possible Community Impact Fee), Point B Realty is updating all towns and taxes in our new property management system, which is programmed to automatically calculate and add the new taxes into the overall cost of the lease.

We collect that tax money and pay it to the state, each month, beginning this summer. For landlords who also do any direct renting on their own, they will be required to collect and file those short-term taxes on rentals they book themselves.

New Tenant Liability Insurance

The new short-term rental tax also requires that each rental stay is covered by at least a $1 million liability policy for the tenants. Many homeowner insurance policies do not currently include this kind of coverage for short-term rental tenants. It’s recommended all landlords check with their insurance carriers. You will be required to certify that you have the coverage in place (if you do any of your own rentals).

At Point B Realty, we will be including a new automatic $1 million tenant liability coverage with each covered rental, as well as some other automatic damage coverage. We will be rolling out and announcing the full details of this new rental coverage over the coming week.

New Landlord Requirements

In addition to the new $1 million dollar liability insurance, all landlords will be required to register their rental home with the state — even if you are renting for less than 14 days. That is another area the Department of Revenue is still working to fully define the scope and process.

Headstart Ferry Reservations

Looking toward the Summer 2019 season, it’s just about ferry reservation time again. And whether you’re a landlord or a local who qualifies, Headstart Ferry Reservations are about to begin. If you are already enrolled in the program, online sales begin on January 8th, 2019 — next Tuesday. You can make up to five car ferry reservations, three of which are transferable. Of course, there are some rules and regulations. If you’re a landlord in Headstart, we highly recommend getting ferry tickets for some of your rental weeks that may need them.

Car Ferry Reservations For Everyone Else – January 22nd

Online car ferry reservations go on sale this year at 5 AM on January 22, 2019. In an effort to spread out the inevitable demand crush (and crashing servers), the Steamship Authority this year is launching online sales of the Martha’s Vineyard and Nantucket car ferry reservations on two different weeks. Sounds good — and good luck! Prime Saturday and Sunday reservations usually sell out within a day or two.