Vermont’s scenic landscapes, charming small towns, and thriving ski resorts attract visitors looking for everything from peaceful retreats to outdoor adventures. As short-term rentals on platforms like Airbnb and Vrbo remain popular, many property owners in the Green Mountain State are seizing this opportunity. However, Vermont does not maintain a single, unified short-term rental law. Instead, hosts must handle state-level taxes and adhere to varying local rules. This overview outlines the major considerations for running a short-term rental in Vermont, including licensing requirements, occupancy taxes, and city-specific guidelines.
Vermont’s Definition of a Short-Term Rental
Vermont does not adopt a uniform definition for short-term rentals across all towns and counties. Many local authorities consider any occupancy of fewer than 30 days to be transient lodging, but certain resort or rural communities may apply their own cutoffs or additional stipulations. Some refer to these accommodations as “short-term rentals” or “vacation rentals,” imposing different rules than those for long-term leases. Property owners should confirm with their local government how short-term rentals are classified and whether any special permits, zoning approvals, or safety standards must be met.
Starting a Short-Term Rental Business in Vermont
Operators of short-term rentals in Vermont generally deal with two levels of compliance: state tax obligations and local regulations. At the state level, owners may need to collect and remit Vermont’s rooms and meals tax (unless a booking platform does so on their behalf). Those who form a legal business entity, such as an LLC, must also register with the Vermont Secretary of State and possibly the Vermont Department of Taxes.
Localities often exercise discretion over short-term rental guidelines. In resort-heavy or environmentally sensitive regions, for instance, you may need to secure a permit, comply with occupancy caps, or observe noise restrictions. Some homeowners associations (HOAs) have their own bylaws limiting or banning rentals of fewer than 30 days. Consulting municipal websites or contacting city planners helps owners identify applicable rules well before listing a property.
Short-Term Rental Licensing Requirement in Vermont
Vermont does not issue a single, statewide license specifically for short-term rentals. Instead, municipalities or counties implement permitting based on local needs. Popular tourist destinations, particularly in ski regions or along scenic lakes, may require:
- Annual short-term rental registration and safety checks
- Strict occupancy or parking guidelines
- Limits on how many non-owner-occupied properties can operate within a certain district
Hosts who fail to meet these standards risk penalties, listing removal, or forced closure. Because local enforcement can shift with community sentiment, it pays to track discussions at city council or planning board meetings where short-term rental policies may evolve.
Vermont Short-Term Rental Taxes
Property owners typically owe the Vermont rooms and meals tax, which is 9% on short-term lodging in most cases, unless the platform automatically collects it. Cities or towns might layer additional local option taxes—often an extra 1%—on top of the state rate in areas that have approved such measures to support local services. If Airbnb, Vrbo, or another platform does not handle the entire tax remittance process, the host must register with the Vermont Department of Taxes to file monthly or quarterly returns. Accurately recording nightly rates, guest fees, and occupancy data is critical to avoid late filings or miscalculations.
Vacation Rental Tax Deductions
Similar to other states, Vermont property owners renting out their homes for more than 14 days a year may qualify for certain federal tax deductions. These can include mortgage interest, property taxes, maintenance costs, utilities, and depreciation if the property meets IRS guidelines. Tracking personal use days separately from rental days is important for correct expense allocation, especially if the hosts also occupy the property as a second home. Consulting a tax professional or referencing IRS publications can help optimize deductions and ensure compliance.
Short-Term Rental Regulations by Major Locations in Vermont
Burlington
Vermont’s largest city draws short-term visitors for Lake Champlain activities, college events, and local culture. While Burlington does not have a blanket ban on short-term rentals, it requires adherence to standard zoning and building codes. Owners generally must collect state rooms and meals tax and, if applicable, the city’s local option tax. Property owners should watch for city council proposals or neighborhood debates about potential licensing programs or occupant caps. Some HOAs near downtown or waterfront areas may also have rental restrictions.
South Burlington
Next door to Burlington, South Burlington similarly applies Vermont’s rooms and meals tax to rentals under 30 days, with an added local tax in certain areas. While there is no formal short-term rental ban, property owners renting in certain residential zones might need to confirm whether short-term lodging is permitted. Noise or parking ordinances could see stricter enforcement in cases of frequent guest turnover, so operators should be mindful of neighbor concerns.
Montpelier
As Vermont’s capital, Montpelier sees moderate short-term rental demand tied to government sessions and local events. The city does not fully ban short-term rentals but often underscores adherence to building safety codes, especially in older, historic structures. Collecting state rooms and meals tax remains mandatory unless the platform handles it. Owners near downtown may face additional local option taxes or occupant restrictions, though Montpelier has not established a distinct short-term rental permit system at this time.
Killington
A major ski resort destination, Killington often imposes stricter guidelines or local lodging taxes, on top of Vermont’s state tax, to fund tourism and infrastructure. Property owners hosting frequent vacationers must ensure they have appropriate safety features (fire extinguishers, smoke detectors, etc.) and adhere to any local occupant caps. HOAs in ski condo complexes may also require owners to observe specific rental rules, like weekly minimum stays or quiet hours, particularly during busy ski season.
Stowe
Renowned for winter sports and year-round outdoor activities, Stowe sees consistent short-term rental activity. The town may ask hosts to register or follow heightened standards for parking and trash. The local lodging tax can raise the overall rate on top of Vermont’s 9% rooms and meals tax. Repeated nuisance complaints can lead to permit reviews or fines if the town decides to tighten its short-term rental policies. Owners should stay updated on local planning board discussions that could affect rental density or occupant limits.
Takeaway
From the bustling shores of Lake Champlain to the snowy slopes of Vermont’s ski country, short-term rentals are a major economic driver in the Green Mountain State. However, property owners must navigate Vermont’s decentralized regulatory landscape, ensuring they collect and remit the 9% rooms and meals tax (plus any local option tax) and meet any municipal permit or occupancy rules. Abiding by local codes—particularly in popular resort towns—can help avoid penalties or forced listing shutdowns.
Since local authorities often reassess short-term rental policies in response to housing concerns or neighbor complaints, hosts should follow city council updates or neighborhood association notices. By registering with Vermont’s tax authorities, maintaining accurate records, and adhering to relevant zoning or HOA guidelines, short-term rental operators can successfully run their businesses while providing guests with a quintessential Vermont experience.
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