Question: What are the local laws governing short-term rentals in the DC area?
Answer: I hope you had a great Fourth of July holiday weekend! Some of you may have stayed at an Airbnb this weekend and come back with grand plans of buying your own investment property to rent out.
If you’re considering purchasing an investment property for short-term rentals (STR), like Airbnb, one of the most important things to research early on are the local laws governing them. With all the tourism to the DC area, a short-term rental property can be quite lucrative, but most local governments in this region have laws in place to prevent properties from being used exclusively for short-term rentals and thus limit your expected returns.
It’s also important to know that short-term rental restrictions from Homeowner, Condo, or Cooperative Associations take precedent over any local laws and it is extremely rare to find an Association that allows for any rental period less than 6 or 12 months.
Short-term rentals are defined as properties rented out for less than 30 consecutive nights to the same renter.
I compiled a list of the local STR laws in the greater DC area and summarized them below with links to the government websites where the information is detailed:
- Arlington County: Allowed in units used by the owner as his/her primary residence (the owner occupies the unit at least 185 days of the year). Cannot use detached accessory dwellings for short-term rentals.
- Washington DC: Unlimited rentals if the property is owner-occupied during the rental (rental is for partial use of the home), limited to 90 nights of rentals per calendar year for properties that are not owner-occupied during the rental (renter has full access to the entire property). DC also requires an assortment of licenses, certifications, and fees.
- City of Alexandria: Unlimited rentals during a calendar year and no restrictions on owner occupancy. Properties can be owned and used solely for short-term rentals. City of Alexandria charges an additional 8.5% Transient Lodging Tax for properties that sleep 4+.
- City of Falls Church: I could not find any official guidance from the City of Falls Church on short-term rentals and am led to believe there are not currently any restrictions or additional taxes
- Fairfax County: Limited to 60 nights of rental bookings per calendar year, with no reference to owner occupied vs unoccupied. Detached accessory dwellings cannot be used as STRs. No more than six adults can stay in a single property. Additional Transient Tax charges apply.
- Loudoun County: It seems that Loudoun County is still drafting their short-term rental policies, with the last official write-up I found referencing a February 2022 public hearing and draft amendment. The County’s zoning currently does not allow short-term rentals, but a hold has been put on enforcement until a policy can be finalized.
- Montgomery County: Limited to 120 nights of rentals if the home is not occupied by the owner during the rental and unlimited rentals if the home is owner-occupied during the rental. No more than six adults can stay in a single property.
- Prince Georges County: Limited to 90 rental nights per calendar year if the property is not owner-occupied during the rental and limited to 180 rental nights per calendar year if the property is owner-occupied during the rental.
Owning and operating a short-term rental can be very lucrative, but it’s important to understand that residents and local governments are still in the early stages of defining how their communities want to support or restrict STRs. Before making a significant investment in a property for STR income, get fully informed on current laws/taxes, research the mood of residents and politicians on STRs, and incorporate the risk of law/tax changes into your investment decision.
If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.
If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.
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Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate | @properties, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.