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Malibu prepares to enforce vacation rental tax

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Posted: Wednesday, June 8, 2011 12:00 am

As summer looms, the city tells residents who rent their homes for 30 days or less to register with city.

By Knowles Adkisson / The Malibu Times

In exploring ways to maximize tax revenue, City of Malibu officials have begun discussion of ways to enforce a tax on short-term rentals of private homes.

In 2009 the city implemented the tax, formally called the Transient Occupancy Tax, which charges homeowners who rent their houses to visitors for 30 days or less 12 percent of the income from the rent (a property owner would be taxed $120 per $1,000 in rental income.) Previously the city had only enforced the tax on hotels and motels.

The city sent a letter to residents in 2009 informing them they would have to remit a tax and register with the city if they were renting their homes for short-term use, Assistant City Manager Reva Feldman told The Malibu Times. The city also placed ads with local newspapers and publicized the tax in the city newsletter, Feldman said.

Still, many homeowners who rent their homes for short-term use have not registered with the city, and the city's enforcement options are limited. Feldman said city employees periodically search vacation home rental sites on the Internet to find out who in Malibu is renting their home without having registered with the city. Other times, residents alert the city of rentals in their neighborhood, usually after noise or other complaints. Despite the occasional find, Feldman said city officials have “no idea how many people are off the books.”

Malibu Mayor John Sibert said it was a problem, since “this town has more informal bed and breakfasts than anywhere else in the country.”

Sibert said the city's attractiveness as a tourist location contributes to a large number of private home rentals to tourists, many of which are not registered with the city. That number, Sibert said, theoretically offers an economic boon to the city in the form of robust tax revenue for the vacation rentals. But enforcement remains a problem.

Suggestions for enforcement of the tax put forward at the May 9 meeting of the city's Administration and Finance Subcommittee included assigning a high school or college student working through the city's intern program to search vacation rental Web sites for unregistered rental houses, or creating an online database in conjunction with the Chamber of Commerce for people to register their homes.

Feldman said the City of Big Bear Lake, Calif. has such a database through a partnership with its chamber of commerce. The Big Bear Chamber of Commerce Web site contains a link to a nonprofit rental association coordinated with the city. Feldman suggested that a similar, centralized database on the Malibu Chamber's Web site would be convenient both for potential visitors looking for lodging outside of hotels and motels, and for the city's efforts to collect vacation rental taxes.

Phil Mosley, director of Community Relations and head of code compliance for the City of Big Bear Lake, told The Malibu Times that his city had installed stronger enforcement measures to successfully collect the tax. After facing continuing problems such as overcrowding, noise and illegal parking from out-of-town renters, the Big Bear Lake City Council passed an ordinance in 2007 levying citations and financial penalties on people renting their homes illegally or advertising them for rent illegally.

It also established a “24/7” enforcement program, where people can call in and report violators. City employees also scan the Internet for unregistered homes being advertised online, even going so far as to match the pictures of homes when no address is given. All homes listed for rent in Big Bear must also submit to city inspections to ensure code compliance. Mosley said the city has caught approximately 100 violators since the ordinance took effect in 2007. Big Bear brought in $1.2 million from the tax on private home rentals during its fiscal year 2010-11 and $913,548 from commercial lodging (hotels and motels). Malibu's commercial transit occupancy tax income for fiscal year 2010-11 so far is $790,000, and $106,000 from private home vacation rentals.

While Big Bear's enforcement system has been successful, Feldman said she thought establishing similar requirements in Malibu “would not be well received.”

With Malibu heading into its busiest tourism season of the year, Feldman said ultimately it would be up to homeowners looking to rent their houses for short-term periods to come forward voluntarily.

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  • amandalmaska posted at 9:26 pm on Tue, Nov 27, 2012.

    amandalmaska Posts: 1

    The city provides very nice facilities for rent, but this taxing issues are really worst.
    Stockton California for rent by owner

  • anonymous posted at 1:51 am on Sat, Jun 11, 2011.

    anonymous Posts: 0

    Key West, Florida has a major tourism economy and has grappled with issues pertaining to short-term vacation rentals for over a decade. Today, Key West has “Transient Rental Ordinance” to regulate short-term rentals that is strictly enforced. Short-term rentals in Key West that rent for less than 30 days must be licensed with the City of Key West, Monroe County, and the State of Florida. Further, they are subject to the same State sales tax and County bed tax as a hotel / motel or bed and breakfast accommodation. When the City first began issuing these licenses it was possible to obtain one for a very inexpensive amount. The City of Key West does not issue anymore permits and transient licenses are currently valued at over $25,000! For more information on this topic see my blog at:

  • anonymous posted at 2:26 pm on Thu, Jun 9, 2011.

    anonymous Posts: 0

    Bend over for the taxman. Like were not paying enough in taxes like it is. Why is this not just considered income tax? How is the city justifying collecting this tax? What burden does renting out a house put on the city where this tax can be collected?