Raleigh vacation rental hosts must get permits, collect occupancy taxes under new law

Short-term rental hosts in Raleigh, North Carolina, will be required to get a city zoning permit in order to operate, according to a new ordinance that goes into effect March 4.

Short-term rentals have been illegal in Raleigh, but the city made a decision in 2015 not to enforce the ban. In 2017, the city created new rules, but the City Council elected in 2019 decided to postpone enforcement on those as well while they worked on new regulations.

Under the new law, vacation rental operators must post their permit numbers on all advertisements. The new law also bans special events and gatherings, forbids exterior advertising at vacation rentals, and prohibits cooking facilities in bedrooms.

In multifamily buildings, short-term rentals are limited to 25% of building units (or two units, whichever is greater). Short-term rental hosts must also keep a list of all guests for three years.

The city will revoke the permits of short-term rental operators who receive two “verified violations” from the city or are convicted of a crime within a 365-day period.

Short-term rental operators are also required to collect occupancy taxes. In Raleigh, vacation rentals are subject to Wake County room occupancy tax. Operators must register with the county and file regular returns. Hosts must also register with the state tax authority, collect state and county sales tax, and file regular returns with the state.

Airbnb and Vrbo collect both state and county sales and occupancy taxes on behalf of their hosts when guests pay for their stays.

MyLodgeTax can automate and simplify lodging tax compliance. For more on short-term lodging taxes in North Carolina, 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.