Philadelphia STR hosts face new regulations

All short-term rental hosts in Philadelphia, Pennsylvania, are now required to obtain a permit from the city to do business, starting January 1, 2023. The new rule is part of a law designed to ramp up enforcement against illegal short-term rentals.

Short-term rentals are defined as those lasting fewer than 30 days. Previously, short-term rental hosts who were full-time residents in the same building as their rental units were only required to get a limited lodging operators license if they operated their short-term rental for more than 90 days a year. Vacation rental operators who don’t live in their rental property have always been required to get a hotel license.

The city has not strongly enforced the regulations for either type of short-term rental. Although thousands of short-term rentals are currently operating in the city, only 247 limited lodging operators licenses and 164 hotel permits have been issued by the city.

Now, operators hosting short-term rentals in their home must apply for a license and comply with the regulations that apply to all licensed short-term rentals, including requirements for safety features such as smoke and carbon monoxide alarms.

Other rules include:

• Short-term rentals cannot be occupied by more than three people (including the owner and renters) who aren’t part of the same family
• Renters are only allowed to have guests between the hours of 8:00 a.m. and midnight
• Excessive noise is prohibited

Non-hosted short-term rentals still require a hotel license, which can only be granted in parts of the city that are zoned for hotels. In non-hotel zoned areas, operators must ask the Zoning Board of Adjustment for a zoning exception to get the required hotel license.

Under the new law, operators of both hosted and non-hosted rentals must have a city-issued license to be listed on short-term rental marketplace sites such as Airbnb and Vrbo. The marketplaces are liable if non-licensed properties appear on their sites.

The measure was passed in June 2021 and was originally set to go into effect in February 2022, but that date was delayed to give hosts more time to prepare for the new rules.

Philadelphia vacation rentals are also subject to lodging taxes that include Pennsylvania state hotel tax and city hotel tax. Short-term rental hosts are required to collect these taxes from guests, register with state and city tax authorities, and file lodging tax returns.

Airbnb collects both state and city taxes on behalf of its hosts. Vrbo also collects state taxes for hosts in Philadelphia, but it does not collect city hotel taxes. Hosts are required to collect and pay taxes that are not collected by their platform.

MyLodgeTax can help short-term rental hosts in Philadelphia simplify and automate lodging tax compliance. See our Pennsylvania Vacation Rental Tax Guide for more on short-term rental taxes in the state. If you have tax questions related to properties in Philadelphia, drop us a line and we’ll get back to you with answers