As discussed in a previous update regarding the proposed legislation to impose a lodging tax on private rental homes, we are encouraging rental homeowners to write to their state rep. and voice their opinions about this tax. One of our homeowners is sending this letter to her state rep.:
The lodging tax on private home rentals would be totally unfair. In Barnstable, where my rental home is, the commercial property owners pay $8.40, whereas residential owners pay $9.30. Thus hotels and motels are getting a 10% tax break on their property values vs. homeowners. In addition, full-time residents get an $800 tax break on residential rates over second homeowners.
The only ones paying the highest property tax rate are the second homeowners, some of whom have to subsidize the higher taxes by renting their home. We provide a valuable service to these towns. If we didn’t rent, there would be fewer tourists to contribute to the local economy. If the average rent is currently around $2200, the additional $264 lodging tax would have to be paid by someone. What year can anyone remember homeowners being able to increase pricing by 12%? It’s hard enough to pass on a $100 increase every other year.
The tax will again be on the second homeowner’s back.
We also pay much higher fees for services like beach passes…..In Barnstable, it costs me $275 for a transferable beach pass vs. $15-20 that a full-time resident pays. Really?
Residential property tax bills have risen 100% since 2008 (even though the assessed rate is lower for residential property), whereas commercial property tax bills (hotels/motels) have barely risen.
Add to that, most of us have to be insured with the Mass Fair Plan as most insurance companies in the state won’t cover the Cape. It costs us far more to insure than owners in any other part of the state.
Then on top of it all, most of us can only deduct expenses equivalent to revenues received. We can’t take the losses off of our other taxable income.
I don’t know about others, but I wouldn’t be able to pass on a 12% increase to my tenants, some of whom return every year. That means I’ll have to net less than I already receive. We’ll have to fee our tenants to death….Rent + Cleaning Fee + Utility Fee + Beach Fee + Management Fee to get creative with non-taxable charges.
With all the costs in maintaining our home so it is presentable to renters, I’m either ready to sell or not rent at all.