Airbnb hosts have to deal with paying taxes and following regulations in many places across the US. In some cities in the United States, government officials have stipulated new laws restricting rentals to primary residences only or have even enforced a ban on the use of Airbnb all together.
Other cities, however, refrain from regulating the company. This is because their economies, in fact, have incurred much financial benefit from Airbnb short-term rentals.
What about Airbnb Miami? Is Airbnb legal in Miami? Or is Miami becoming a difficult city for owning and renting out on Airbnb? As a matter of fact, yes. With the new Airbnb laws, owning an Airbnb rental property and operating it in Miami has become more assiduous.
So, we recommend that you study Airbnb regulations meticulously before investing in an Airbnb Miami rental property. In this guide, we will discuss a few of the Airbnb regulations and how they will affect your Airbnb rental strategy.
New Law Effective in September 2018—Business License
According to the chief deputy city attorney, Airbnb and other home-sharing platforms are allowing rentals in zoning districts that are patently illegal in the Miami area. For this reason, city officials in Miami have enforced a new law requiring online platforms to list specific business license information on their sites in order to track down and prevent violations.
The law took effect in September of 2018. However, rental property owners and hosts were given a 30-day grace period to adapt to the new changes and apply for a business license. The new law requires platforms to list the property owner’s city-issued tax receipt number and the resort tax registration certificate number for each listing.
Airbnb Miami Regulations in Miami-Dade Effective in 2017
To urge hosts to operate legally in Miami-Dade and to preserve the integrity and the safety of Miami neighborhoods, regulators have enforced new laws against home-sharing platforms. In May 2017, Airbnb Miami made an agreement with Miami county officials to enforce the following regulations:
- Hosts must apply for a certificate of use. The information required in the application includes contact information for the property owner, the short-term rental host, and the platform where the vacation rentals will be listed. Moreover, the application requires hosts to certify that they will be collecting and remitting short-term rental taxes, particularly tourist and state taxes.
- Hosts must be on-call to handle guest issues. They must either be on-site or rent the property out only if they live there for more than six months a year. Keep in mind that non-owner-occupied rentals are illegal in many zones.
- Hosts must also maintain a register with the names and dates of all guests who stay at the rental property.
Other Airbnb Miami Regulations
Now that we have explored the recent laws governing Airbnb, let’s talk about some other laws pertaining to Airbnb Miami rentals.
- Miami 21 Zoning Code: This code governs most land use in the City of Miami and it ensures compliance with current zoning requirements. As a real estate investor looking to buy a short-term rental property, we recommend that you assess how you comply. Consult with this code to see if you are consistent with the current zoning requirements or use definitions. The important definitions include single family homes, multi family homes, and residential units.
- Building and Housing Standards: Miami enforces regulations requiring property owners to specify minimum construction, design, and maintenance standards for buildings. The regulations also include those on habitability, health, and safety.
- Business License: As previously discussed, all owners or operators of businesses must obtain a business license.
- Tourist Tax: A rental property owner is subject to paying a property tax for rental properties being rented out for periods of 6 months or less.
- Other Rules: Those include HOA rules and tenant organization rules. Refer to your agreement with any organization governing your rental property to learn of the rules that bind you.
Related: What Is the Best Type of Miami Investment Property?
Florida Real Estate Market: Airbnb Regulations
While we have discussed Airbnb Miami short-term rental laws and taxes, let’s discuss the statewide regulations that all hosts must comply with.
- Sales Tax: Airbnb collects and remits this sales tax on behalf of hosts across the state of Florida.
- Tourism Development Tax: This tax is about 2-5% of the listing price including cleaning fee for reservations of 182 nights and shorter. The tax is effective in Miami-Dade but not in Miami Beach, Bal Harbour, and Surfside.
- Florida Transient Rental Tax: This is 6% the listing price including any cleaning fee for reservations 182 nights and shorter.
- Florida Discretionary Sales Surtax: This is 0.5%-1.5% of the listing price including any cleaning fee for reservations 182 nights and shorter. Note that the amount of tax varies from one county to another.
For more information about the Miami real estate market, visit Mashvisor!
Homestead Exemption
What about the homestead exemption? Is it applicable to Airbnb Miami rental properties? The homestead exemption is a property tax exemption of up to $50,000.
To benefit from the exemption, a property owner in the State of Florida must make his or her property their permanent residence or the permanent residence of a dependent. Airbnb Miami hosts can benefit from the exemption if they are primary residence Airbnb hosts renting out a property for no more than 30 days a year.
Investing in an Airbnb Miami rental property is surely accompanied by many regulations that can be restrictive. We, therefore, recommend that you resort to traditional rental property investing as opposed to renting via Airbnb.
For this reason, we have compiled data about the top neighborhoods in the Miami housing market for investing in traditional rental properties. Using Mashvisor’s investment property calculator, we collated the best neighborhoods with the highest potential for profit based on key financial metrics, including cash on cash return, cap rate, and cash flow.
#1: Overtown
- Median Property Price: $572,707
- Price to Rent Ratio: 26%
- Average Days on Market: 95
- Monthly Traditional Rental Income: $1,842
- Traditional Cash on Cash Return: 2.5%
#2: Liberty City
- Median Property Price: $263,578
- Price to Rent Ratio: 14%
- Average Days on Market: 119
- Monthly Traditional Rental Income: $1,556
- Traditional Cash on Cash Return: 2.7%
#3: Coral Gables
- Median Property Price: $263,782
- Price to Rent Ratio: 10%
- Average Days on Market: 105
- Monthly Traditional Rental Income: $2,206
- Traditional Cash on Cash Return: 2.4%
Bottom Line
The Miami real estate market that was once welcoming Airbnb properties is now limiting the number of Airbnb Miami rentals. Government officials have declared laws to regulate home-sharing platforms like Airbnb in an effort to preserve the integrity of the area and its safety.
If you are looking to invest in a Miami investment property, make sure to distinguish your rental strategy. While adopting a traditional rental strategy may be a safer option, investing in an Airbnb Miami rental property can still be profitable. Find out how much rental income you can expect by using Mashvisor’s Airbnb calculator.
Importantly, contact the local city council to inquire about residential zones and the laws that govern them. Consult with a real estate agent or attorney to ensure that you comply with all regulations and make sure that even with the regulations, your Airbnb Miami rental property remains profitable.
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