DE advocates voice concerns on proposed rental tax increase
DELAWARE – Delaware housing advocates are voicing concerns on legislation proposing an 8% state rental tax increase.
House Bill 168 would require every short-term listing get an occupational license and pay an annual licensing fee of $25. It also sets stricter definitions for what a short-term rental is and applies the lodging tax for hotels motels and tourists’ homes to short-term rentals.
The Sussex County Association of REALTORS says short-term rentals are already defined as 150 days or less and are bound by a municipal tax of 5-7%.
They say the legislation could impact local economies as many properties are privately owned. “We have asked repeatedly to give our input. We’ve requested that through the sponsor of the bill and various nonprofit and non-government organizations that are benefiting from the tax. We’ve been given little to no input,” Sussex County Association of REALTORS President Allison Stine said.
The Delaware Assocation of REALTORS also sent us the following statement below:
“The Delaware Association of REALTORS is fundamentally and adamantly opposed to HB168. In discussions with the bill’s sponsors and supporters, we’re told the bill is about equity and that anyone renting a property for less than 150 days should be paying the same tax as a hotel guest. We take great umbrage in the comparison. Very, very few people vacation for 5 months. Across the entire state, short term rentals are used for temporary housing. Delaware has an affordable housing crisis as well as the highest state transfer tax in the nation, and our lawmakers need to make those situations a priority. Taxing those who use a short-term rental for housing affordability reasons will prolong their time as a renter and make homeownership even further out of their reach. Previous versions of this bill had an 11% tax cap. That disappeared in the most recent version, which means the state can raise the tax at any time. We can’t ignore the money grab this bill represents.”
Other concerns are that the tax isn’t capped and that the bill would allow an additional county tax of 3% in unincorporated areas.
The bill has made it out of committee and awaits consideration in the House.
