Renting an Airbnb in Ocean City? You’ll soon pay an extra 3% tax.
City council members narrowly voted to create the tax, which would be paid by renters who secure vacation homes through Airbnb, Vrbo, and similar sites.
Vacationers in Ocean City should prepare to pay a bit more for their Jersey Shore rentals if they use sites such as Airbnb or Vrbo.
In a 4-3 vote, city council members decided last week to charge visitors a 3% tax on short-term rentals that they book through these kinds of third-party platforms.
Council members who voted in favor of the fee said during the meeting Thursday night that short-term rentals offering stays of just a few nights are bringing in more visitors and that more visitors mean the city must provide additional services. They said the fee can help cover those additional costs.
The 3% fee will not apply to rentals booked directly with a property owner or through a real estate office, which are ways renters have traditionally secured vacation homes in Ocean City.
The tax would take at least three months to go into effect, with the timing dependent on the state.
Sean Barnes, who hosts on Airbnb, was one of the council members who voted against the tax. He said he doesn’t that think short-term rental guests cost the city any more than other types of guests and that the ordinance is unfair because it penalizes certain rental platforms.
During the meeting, Ocean City resident and rental property owner Brian Salvo agreed that the tax was unfair, because it does not apply to all vacation rentals. Guests who use short-term rental platforms already complain about all the fees they have to pay, he said.
“We use Vrbo and Airbnb, and I actually lost a couple renters because the fees are already tough, and we really can’t lower the price. It hurts our bottom line,” Salvo said, pointing to the costs of condo association fees, taxes, maintenance, and other expenses.
Salvo said that he gets most of his renters through Vrbo and Airbnb and that the platforms generate more exposure than he could get through other means.
Council member Dave Winslow said that other Shore towns have similar fees and that Ocean City’s tax is “not astronomical,” giving the example of a renter having to pay $75 on a $2,500 rental.
“Most people are not going to leave Ocean City for $75,” he said.
In a letter submitted to Ocean City’s council before last week’s vote, lawyers for Airbnb argued that the tax also must apply to hotels and motels to comply with state law and that the ordinance violates short-term rental hosts’ right to equal treatment under state law.
The attorneys said passing the ordinance “would likely result in costly litigation for the city.”
Council member Jody Levchuk, an Ocean City rental property owner who hosts on Airbnb and Vrbo, said during the meeting that the tax would not apply to hotels and motels because those places pay for private trash removal and have on-site staff to handle noise and other complaints. He voted in favor of the tax.
In a written statement to The Inquirer, Alain Xiong-Calmes, public policy manager at Airbnb, said short-term rentals are important to New Jersey’s economy, “particularly in places with limited affordable hotel options.”
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“In Ocean City, where most guests come from within the New Jersey region, this short-term rental tax risks pricing out families seeking affordable stays with access to the coast and threatens the local businesses and attractions that rely on visitor spending from short-term rentals,” Xiong-Calmes said.