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Understanding The NJ Vacation Rental Tax Law

Understanding The NJ Vacation Rental Tax Law


December 6th 2018

WANT TO SAVE BIG MONEY ON YOUR VACATION RENTALS?
Book through a real estate brokerage like ReMax At The Shore.

Earlier this year, New Jersey Legislature passed a series of state and local taxes that will force renters who book their vacation properties through online sites like VRBO and HomeAway to pay a hefty tax in addtion to the rental fees. Depending on local municipality taxes, this tax can range from 12 percent to 14 percent on top of what people already paid to rent a Jersey Shore home for a vacation. Here in Cape May, renters who book through licensed brokerages can save nearly 14% — which means several hundreds, even thousands, of dollars for most rentals

The transient accommodations taxes apply to bookings made through either online travel companies such as Airbnb and VRBO or directly with individual homeowners. The law was passed to ostensibly level the playing field between hotels and privately managed rentals, but individuals who rented their homes out at the Shore to vacationers, were included in applying the taxes.

The good news? The taxes do not apply if the booking is made through a licensed real estate professional.

The exact language of the legislation from the State reads: 

"Effective October 1, 2018, charges for the rental of transient accommodations are subject to Sales Tax (N.J.S.A. 54:32B-1 et seq.) and the State Occupancy Fee (N.J.S.A. 54:32D-1 et seq.). Depending on where the occupancy occurs, the transient accommodation may also be subject to various other state and municipal taxes, assessments, and fees.

A transient accommodation is a room, group of rooms, or other living or sleeping space for the lodging of occupants, including but not limited to residences or buildings used as residences. This definition includes rentals made through transient space marketplaces, as well as rentals that are made directly by the homeowner through classified listing sites, local newspaper ads, referrals from friends/family, or placing a sign on the home, etc."

Simply put, it is now more cost effective to book your vacation rentals AND list your vacation rental with a brokerage. And with the marketing power of The Coastal Marketing Group, we'll make sure your weeks are filled and you and your tenants save money. Contact us today at (609) 884-4242 and browse our amazing tax-free vacation rental properties right here

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