New vacation rental rules go into effect in Richmond and Henrico County, Virginia

A new short-term rental law in Richmond, Virginia, that requires short-term rental hosts to register with the city went into effect July 1.

The Virginia General Assembly passed a law in 2017 allowing local governments to regulate short-term rentals by requiring hosts to register with local authorities and issuing fines for violations.

The new ordinance limits short-term rentals to a host’s primary residence, meaning they live there for at least 185 days per year. Short-term rental permits cost $300 and are good for two years. Hosts are required to include their permit numbers in any advertising of their vacation rental. The new rules also prohibit events or gatherings in short-term rentals.

Previously, rentals of fewer than 30 days were illegal in Richmond, although about 750 of them were operating within the city, according to a 2018 study.

The Department of Planning and Development Review will evaluate the law in a year to see how it’s working and to decide whether city lodging taxes should be levied on short-term rentals.

Although short-term rentals in Richmond aren’t currently subject to city lodging taxes, they are subject to state sales taxes. Vrbo and Airbnb collect these taxes for their Virginia hosts.

In neighboring Henrico County, Virginia, a new short-term rental law also went into effect July 1.

Like Richmond, Henrico County requires short-term rental operators to hold a permit in order to operate, at an annual cost of $200.

Vacation rental operators who wish to have short-term guests stay at their property while the host is not on site must apply for a conditional use permit for such unhosted stays.

Operators who want to offer hosted stays do not have to apply for a conditional use permit as long as they offer hosted stays for a maximum of 60 days per year. If they offer short-term rentals for more than 60 days per year, a conditional use permit is required.

Vacation rentals are allowed in single-family residential districts, but not in apartments, townhomes, or urban mixed-used developments.

Short-term rental operators in Henrico County are also required to collect an 8% transient occupancy tax from their guests, file monthly transient occupancy tax returns, and remit the tax to the county.

While Vrbo and Airbnb collect state sales taxes that are due on vacation rentals in Virginia, neither Vrbo nor Airbnb collect Henrico County lodging taxes on behalf of their hosts. That means hosts are responsible for their own tax compliance.

MyLodgeTax can help short-term rental hosts automate and simplify lodging tax compliance at the city, county, and state level, including tax registration and filing. For more on short-term rental lodging taxes in Virginia, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.