NJ homeowners who arrange their own rentals no longer have to pay shore rental tax

David Madden
August 09, 2019 - 3:45 pm

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SOUTH JERSEY (KYW Newsradio) — Changes are on the horizon for New Jersey’s controversial tax on shore house rentals.

Gov. Phil Murphy signed legislation Friday that would limit the scope of rentals that are subject to the tax.

The 11.6 percent tax, which went into effect last year, is similar to the tax paid on motel and hotel rooms down the shore.

It was created as a means to prevent people who rent homes online — through agencies like HomeAway or Airbnb — from getting around those taxes. But some private property renters have complained that it has affected business, as beachgoers leaned more toward cheaper deals.

“Our shore economy adds tremendous vitality and dynamism to New Jersey,” said the governor in a statement. “Access to affordable rental properties for visitors and income on rentals for homeowners are the backbone of that economy. Our public policies must be well-calibrated to allow this economy to thrive and grow.”

Rental websites will still be taxed, but Murphy approved a measure that exempts people who rent out their shore houses privately, rather than through a third-party site, from the tax. They can collect that rent without the tax or a middleman. 

The tax still applies to properties that are professionally managed, like those you’d book through a realtor. 

Homeowners who complained said they depended on that revenue from long-time regulars who rented for a week or two, perhaps even a whole summer. Proponents of the levy change insisted the tax was never meant to apply to those private transactions.