Renting your property on Airbnb, VRBO, or any other short-term rental platform is an increasingly common practice. It can offer you financial benefits, flexibility, and many other perks. It is important, however, to follow the proper procedures when renting out your property.
Wisconsin Tourist Rooming House License
In Wisconsin, a residential dwelling offered for rent for a fee for fewer than 30 consecutive days is generally a “short-term rental.” If it is operated for more than 10 nights each year, the operator must obtain a Wisconsin tourist rooming house license through the Wisconsin Department of Agriculture, Trade and Consumer Protection. This license requires an annual license fee, as well as a one-time pre-inspection fee. Applicants must complete DATCP’s licensing process, including the required pre-licensing inspection and compliance with applicable lodging rules.
County and Municipality Specific Regulations
Consult your local county and municipality to determine if there are any other regulations that must be followed. For example, certain counties require rental owners to obtain a county license. Some counties also require rental owners to enforce certain rules when their properties are rented out. Each county and city is different, so be sure to investigate.
Consult Homeowners’ Association Regulations
If your rental property is located within a homeowner’s association, determine whether there are any bans or regulations against short-term rentals. Many homeowners’ associations have provisions that restrict or completely ban rentals, which may impact your ability to rent. It is also important to determine if it would be likely for these bans or regulations to be voted in anytime soon, as that can impact your long-term ability to rent.
State and Local Lodging Taxes
Income from short-term lodging is generally subject to Wisconsin sales tax, including the 5% state sales tax and any applicable local sales taxes. A seller’s permit may be required if the operator has $2,000 or more in taxable annual sales, but an operator who makes sales exclusively through a qualifying marketplace provider generally does not need a seller’s permit because the marketplace is responsible for collecting and remitting applicable taxes. Owners should verify the platform’s tax treatment and account for any direct bookings.
A city, village, town, or county may impose a room tax on lodging. Wisconsin defines a short-term rental for room-tax purposes as a residential dwelling offered for a fee for fewer than 30 consecutive days. The applicable rate, registration process, filing obligations, exemptions, and whether a booking platform collects the tax depend on the local jurisdiction and booking channel.
The Role of a Real Estate Attorney
Real estate attorneys can help prospective rental owners ensure they are following the proper laws and regulations before renting their property. To consult with a real estsate attorney on your status as a prospective rental owner, contact Moen Sheehan Meyer today at 608-784-8310 or via email.