RICHMOND, Va. (WRIC) — Richmond City Council has approved a new law to tax short-term rentals Airbnbs and VRBOs within city limits. While it is a welcome change for city leaders, local local rental hosts are left with questions.
Under the ordinance, short term rentals will now be taxed 8% of the charge made for each room rented. This is the same way hotels are subject to “transient lodging taxes.”
The new change is not a welcome one for Airbnb and VRBO hosts in the community.
“I don’t think my voice was heard,” Thomas Courtney, an Airbnb owner in Richmond, said. “I really just wish they had partnered with that community of operators to implement a successful program.”
Courtney has been operating Airbnbs in Richmond since 2016. He believes that because the council only took two weeks to pass the ordinance, council members may not have taken short term rental owners’ feedback into consideration.
“There’s a lot of open questions from the people who are hosting,” Courtney said.
City Council member Mike Jones says the ordinance is a natural progression given the rise in popularity of short-term rental options like Airbnb and VRBO.
“If you’re going to act like a hotel, then you are going to be treated like a hotel,” Jones said.
A statewide bill passed in 2022 gives localities in Virginia the opportunity to impose this kind of tax. City leaders now believe Richmond will have the chance to catch up with other local governments who have made similar changes.
“Those short-term rentals are a significant source of out-of-town revenues to the city,” Sheila White, Director of Finance for the City of Richmond said. “So, this paper will ensure that we have equity in the levy of transient taxes, on rental accommodations.”
City officials estimate the additional revenue from the tax change will be more than $3.2 million. This new revenue will go towards the Greater Richmond Convention Center.
“We’re not going to see a huge windfall of money,” Jones said. “But again, we should get the dollars, the tax dollars that are ours.”
As for local hosts like Courtney, some of them are now looking into switching to long-term rentals for now.
“At least for the time being to let these changes settle out, and then reevaluate later in the year,” Courtney said.