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New Tax Impacting Vermont Short-Term Rentals: What Owners and Guests Need to Know

In an important update for Vermont's short-term rental market, a new bill, H.887 (Yield Bill), has recently become law. After the Governor's veto was overridden by the Legislature, the bill mandates that all short-term rental reservation transactions occurring after August 1, 2024, will be subject to a 12% Meals & Rooms Tax (MRT). This is a significant increase from the current 9% statewide MRT. Here's what property owners and guests need to know about this change.

What Property Owners Need to Know

As a property owner, understanding the nuances of this new tax law is crucial for planning and managing your rental business. Here are the key points:

  • Effective Date: The new tax rate will be applied to all short-term rental transactions from August 1, 2024, onward. This means any bookings made after this date will include the increased tax rate.

  • Increased Costs: The additional 3% tax will impact your overall pricing structure. It's essential to update your listings and inform potential guests of this change to avoid any surprises or misunderstandings.

  • Communication: Transparency is key. Ensure that your guests are well-informed about the new tax rate. Update your listing fee descriptions, communicate clearly during the booking process, and add this information to your rental agreements.

What Guests Need to Know

For guests planning to stay in one of Vermont's beautiful short-term rentals, here’s how the new tax might affect you:

  • Higher Costs: Starting August 1, 2024, the Meals & Rooms Tax for short-term rentals will increase to 12%. This means you can expect to see a slight increase in the overall cost of your stay.

  • Booking Transparency: When searching for accommodations, make sure to check if the increased tax is included in the quoted prices. Most responsible property owners will update their listings to reflect the new tax rate, but it’s always good to double-check.

  • Supporting Local Legislation: While paying higher taxes might not be appealing, it's important to note that these funds often support local infrastructure, tourism initiatives, and other community benefits. Your contribution helps maintain Vermont's charm and appeal.

  • Planning Ahead: If you’re planning a trip to Vermont, consider booking your stay before August 1, 2024, to take advantage of the current lower tax rate. This can help you save a bit on your vacation expenses.

The implementation of the H.887 (Yield Bill) marks a significant change for the short-term rental market in Vermont. Property owners must adapt to the increased tax rate by updating their pricing and communicating clearly with guests. Meanwhile, guests should be prepared for slightly higher costs but can take comfort in knowing their contributions support the local community.

At Stayclass, we’re committed to keeping both property owners and guests informed about important changes like this. We encourage everyone to stay updated and plan accordingly to ensure a smooth and enjoyable rental experience in Vermont.

Read our other blog articles for more information and updates, or explore our comprehensive map of classic Vermont stays for your next getaway.