October 8, 2024
A recent legislative development in Philadelphia is set to reshape the landscape for short-term rentals. Sponsored by Councilmember Mark Squilla and endorsed by Mayor Jim Kenney on June 23, 2021, this legislation introduces a specialized "limited lodging operators" license.
This license, a prerequisite for both property owners and off-site managers, incurs a fee of $150.
Scheduled to take effect on April 1, 2022, the new law mandates several prerequisites for obtaining the specialized license.
For a comprehensive understanding of the intricacies of this legislation, refer to this article on Nochumson P.C.'s website. As outlined in the article, the concept of limited lodging is now exclusively reserved for a "natural person" designated as the primary resident.
This deliberate restriction, as elucidated by the Philadelphia City Council, aims to simplify accountability by bypassing intricate corporate ownership structures, holding individuals responsible for any disturbances arising from Airbnb rentals. Stay informed, Philadelphia, as these changes come into effect.
In July 2015, an amendment to the Philadelphia Code came into effect, allowing Airbnb rentals with specific conditions. The city categorized short-term rentals (STR) as "limited lodging," applicable when renting a property for less than 30 days, subject to outlined requirements.
A dwelling unit may be used for limited lodging subject to compliance with all of the following minimum requirements:
To comply with the Philadelphia Code, Airbnb rentals must adhere to specific conditions, including obtaining a permit if the property is rented for more than 90 days a year.
Applicants for a new license or license renewal must fill out an application provided by the Department of Licenses and Inspections. The application should include the following details:
The annual license fee for a rental license under Section 9-3902 is $55 for each dwelling or rooming unit, with a maximum annual fee of $22,000 per dwelling.
Licenses are non-transferable, and if property ownership changes during the license term, the new owner must obtain a new license within ten business days of the ownership transfer.
If the property owner is not an individual or a publicly traded company, the application must identify, along with the owner, the name and preferred mailing address of each natural person with an equity interest exceeding 49% in the property or owner's value.
If no individual holds such an interest, the application should specify the names and addresses of the two individuals with the largest equity interest in the property.
Owners with more than one short-term (Airbnb) rental property must complete a separate application for the registration of each property, as stipulated by the Department.
Hosting platforms may have pre-existing agreements with the county to directly collect and remit taxes/fees. For instance, Airbnb collects and remits the 8.5% City of Philadelphia Hotel Tax monthly on the host/operator's received amount.
For comprehensive information on tax services in Philadelphia, you can visit the Department of Revenue.
In addition to local taxes, Pennsylvania State Taxes may also be collected in agreement with a hosting platform:
Bill No. 210081, approved on June 23, 2021, and effective from April 1, 2022, establishes that limited lodging owners must not permit occupancy by more than three individuals (including the owner and lodgers) who are unrelated by blood, marriage, adoption, or foster-child status, unless they are Life Partners.
The city of Philadelphia mandates a responsible agent, referred to as a Managing Agent, for any property requiring a rental license, Vacant Lot License, Vacant Structure License, or Vacant Waterfront Structure License.
The Managing Agent, a natural person over eighteen residing in the city or regularly attending a city-based business office, must agree to fulfill responsibilities. Owners or corporate principals meeting the qualifications may be designated as the Managing Agent.
Duties include receiving notices, orders, or summonses from the Department, providing tenant contact information (non-P.O. Box Philadelphia address and phone number), and disclosing responsible parties for routine property maintenance.
Explore Philadelphia, PA addresses using the county zoning atlas.
All short-term rental regulations are subject to local jurisdictions where rental properties are situated.
Upon issuing a certificate indicating property zoning and legality, the City will include a summary of Chapter 9-3900 responsibilities and property maintenance requirements. The summary will encompass:
