In one of the first deals in the country that has been created with Airbnb, San Jose is preparing to tax the residents of their city who are offering their homes for rent to strangers as a way to cover their own housing costs.
The City Council prepared to approve a 10 percent tax on all Airbnb rentals on Tuesday reports San Jose Inside. This is the same tax that is charged on hotel rooms in the area. This tax allows home sharing, which used to be prohibited in the area. Even though it has been prohibited in the past, it has not stopped people from advertising rooms for rent or even homes for rent on a nightly basis.
Most cities do not allow hotel-like stays in private residences but according to statistics, there are over 25 million homes that guests stay at around the world and have for the last six years.
Because it was previously prohibited, there are certain qualifications that must be met for home owners to qualify for this allowance. The host must notify the city so that neighbors can be alerted due to concerns with parking, noise and other issues. The home owning participants will be restricted to 180 visits per year as well.
To date, Airbnb was an underground method of supplementing income in areas where the cost of living is extremely high and hotels were at full capacity.
The Airbnb tax is a project that Mayor Chuck Reed first proposed in March of 2014. Initially it received very little attention but as the media scrutinized the bill as a whole, attention was drawn to areas where rental units had been completely shut down and turned into full time Airbnb homes and the true number of people who are using rooms, homes and rentals as Airbnb rentals came to light.
Statistics have shown that in San Jose alone there are over 300 hosts offering rooms for rent. As the cities budget was evaluated, it was found that adding and Airbnb tax would help boost the economy, allow people to rent out the locations to help supplement their income and would provide enough places for tourists to stay during seasons where tourism was at its highest.
Airbnb are not only used for tourists, many times, people use these illegal Airbnb to determine whether they would like to move to a neighborhood. A positive experience could cause long term economic increase in the area.