While running an Airbnb business might be a lucrative endeavour, it is important to make sure your property listing complies with the law and Airbnb rules & regulations. Here are several points you should take into account before setting up your listing for Airbnb.
Washington, D.C., formally the District of Columbia and also known as D.C. or just Washington, is the capital city of the United States. Maryland and Virginia share a land border on its remaining sides along the Potomac River, which forms its southwestern and southern borders. The city was named after George Washington, the first president of the United States and a Founding Father, and the federal district is named after Columbia, a female personification of the nation. Washington, D.C., is an important political capital of the world, as it is the home of the U.S. federal government and many international organizations. It is one of the most visited cities in the U.S., seeing over 20 million visitors annually.
Washington DC offers a perfect blend of city life, historical significance, and rural beauty. It is a mecca for renters of all kinds in this up-and-coming market. There has been a marked increase in the popularity of vacation rental websites in Washington DC. Over the past decade, home-sharing platforms such as Airbnb have become increasingly popular with a significant impact of 73% of rentals listed on Airbnb channel. A steady 61% occupancy rate and nearly 4,900 active rental units, add up to an average daily rate of $153. Revenue averages $1,774 and is forecast to increase. Airbnb's overall rating in the city is 4.63, and with these statistics, we can anticipate this market is worth investing in.
Let's move on to the Laws, Regulations, and Taxes that govern the city so you can make informed decisions.
Due to the significant increase in short-term rentals and the increase of visitors to Washington DC through various OTA’s, the rules and regulations for operating have changed drastically. These new rules might cramp the style of those who were accustomed to renting freely. The penalties for not following these guidelines can be costly for those who rent short-term on Airbnb or any other platform, so it’s best to pay close attention and adhere accordingly.
Short-term rental laws in effect since 1 October 2019
One-family rental, which includes the rental of single-family homes, townhouses, duplexes, individual condominium units, or individual rooms (including individual rooms in a residential building that the licensee also occupies);
Two-family rental, which includes the rental of an English basement apartment, converted basement apartment, or carriage house in a single-family home where the main residence is occupied by the property owner or another tenant; and
Apartment houses, which include the rental of buildings with three (3) or more dwelling units
If you are applying for a business license for a rental housing business, you must register the rental units with the Rental Accommodations Division (RAD) of the Department of Housing and Community Development.
The fee associated with RAD registration is $43.00 per unit, per two-year license period in addition to the license, application, and endorsement fees.
An applicant for an Apartment must register with the DHCD after the Basic Business License has been accepted by the Department of Consumer and Regulatory Affairs (DCRA).
Upon registration with DHCD, the applicant returns to DCRA with the DHCD-stamped RAD Form in order for the license to be issued.
One Family Rental and Two Family Rental applicants must register with DHCD after the license has been issued by DCRA.
Renting through Airbnb or another home-sharing service requires property owners to register as a business. All applicants for a Basic Business License (BBL) for a Residential Housing endorsement must register the number of rental units with the Department of Housing and Community Development's (DHCD) Rental Accommodations Division (RAD), as required by the Rental Housing Act of 1985.
The Rental Accommodations Registration Form along with the BBL application must be presented to and stamped by RAD before the issuance of a BBL.
Step 1: Review renewal instructions and bill.
Step 2: Gather requirements, including fees payable to "D.C. Treasurer."
Step 3: Submit renewal application via mail, in-person or online (if applicable).
Renewal Application Packets are mailed to the billing address on record no later than 30 days prior to the BBL's date of expiration. Please ensure your billing address is current and accurate in order to receive your renewal information in a timely manner. If you have not received a renewal application packet or to update your billing address, contact the Business Licensing Division.
In order to obtain or renew a Basic Business License as a rental property provider, property managers must obtain and pass an inspection. There is no cost for the inspection. However, if a property fails the inspection or you request that the inspection be rescheduled with less than two business days advance notice, you will be responsible for paying a $90.00 re-inspection fee that must be paid prior to license renewal.
In order to schedule an inspection on your property, please submit a request using the online inspection request form and the DCRA Inspection and Compliance Administration will contact you directly within 10 business days to schedule an inspection.
To ensure you have the best contact information , please visit the DCRA Housing Registry to get up to date contact information.
A few things to note:
2.When renewing a Basic Business License if you do not obtain a passed inspection prior to the time of renewal, your Basic Business License will not be renewed. Failure to obtain an inspection within 90 days will also see your license cancelled.
A Certificate of Occupancy is required for Apartments and Two Family Rentals.
All applicants for a Basic Business License operating from a commercial location in the District of Columbia must provide a Certificate of Occupancy (C of O) for the premises address from which the business activity is conducted in order to demonstrate the activity does not conflict with building and zoning codes.
All applicants for a Basic Business License operating from a residential location in the District of Columbia must provide a Home Occupation (HOP) for the premise address from which the business activity is conducted in order to demonstrate the activity does not conflict with building and zoning codes.
For more information, please call the Office of the Zoning Administrator.
In Washington, DC, Airbnb has established agreements with the government, which is required by law to collect and remit local taxes on behalf of hosts. These taxes are calculated by Airbnb and collected from guests at the time of booking. Upon receipt of the collected taxes, Airbnb remits them on the hosts' behalf to the tax authorities. Taxes on accommodations can include occupancy taxes, value-added taxes (VAT), and goods and services taxes (GST).
The District of Columbia applies two taxes totalling 14.5% that apply to various transient accommodations.
More information is available in the DC Code, Sections 47-2002 and 47-2002.02.
It's also important to understand and abide by other contracts or rules that bind you, such as leases, condo board or co-op rules, HOA rules, or rules established by tenant organizations.
You'll be ready to start earning from your Airbnb listing once you have completed these important steps and have obtained the necessary approvals to start up your Airbnb listing. Make sure you are vigilant and stay up-to-date on the new requirements and regulations introduced by Airbnb or your local authorities at all times.