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June 05, 2019 | Posted in:

New Airbnb Tax Impacts NJ Rental Property Owners

Do you own a Jersey Shore rental property? Do you rent your North Jersey apartment to New York City-bound tourists? Or do you earn extra income by opening your home for overnight stays?

There’s a new tax law that impacts everyone who rents a New Jersey property on a transient basis. How you comply depends on how you find your renters.

New NJ Airbnb Tax

The New Jersey Airbnb tax imposes two levies: a 6.625 percent sales tax and a 5 percent hotel occupancy fee, adding up to an 11.625 percent surcharge. The tax applies to all stays of less than 90 days. The good news—if you use an agent or third party, there’s not much you have to do compliance-wise.

How do you know if it impacts you?

In fact, if you rent through a real estate agent or real estate broker licensed by the New Jersey Real Estate Commission, you don’t have to pay the tax at all. If you use an internet site (think VRBO), they will collect taxes from renter and pay the state.

It’s a different story if you rent directly. You’ll need to properly register with the state, charge your occupants, and then pay the hotel tax monthly and the sales tax quarterly, using the proper  forms. If this is the case, now may be a good time to consider working through a third party such as a realtor or online service.

Tax implications of rental properties

Concerned about how the new tax is impacting your rental income or not sure what type of middleman is best for you? We can help you with the numbers and help you make the right choices.

This article was published in Alloy Silverstein’s Summer 2019 Newsletter. Click here for more content or to subscribe.

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