Short Term Rentals (STRs) were discussed by the Georgetown City Council at the November 8, 2022, City Council workshop. The Council has directed staff to implement a tracking software that identifies where all short-term rental properties are located and to work on educational outreach efforts to both owners and renters once the software is in place in 2023.
To date, the City has relied upon the short-term rental property owners to self-report the city hotel occupancy tax, but due to the gap between the number of units we know are in the community and what is actually reported, we will be developing regulations, implementing a new tracking software, and working with property owners on how to report and pay the tax to be in compliance.
Frequently Asked Questions
Will this change affect my rental revenues?
No, the tax is not an added tax that you yourself are paying, but rather the tax will be charged as part of your guests bill for staying at the unit. This is a tax that all local lodging properties in Texas are subject to as part of Chapter 156 of the Texas Tax Code. There will be a lot of outreach on this and once it is rolled out, each owner will be responsible for updating their collection system so that the customer will see a bill which includes: guest room rate, 6% state tax, 7% city tax. There is more information that will be coming out once we have the software in place and we will be happy to assist you with any questions you have once that goes into effect.
Why do I have to pay a new tax?
This is not a new tax; all STRs are required to pay the city occupancy tax per State law and will be brought into compliance with the implementation of this process.
Will current STR’s need to back pay HOT from previous rentals?
No, this will not be a retroactive program.
Will I have to have my rental property inspected?
No, at this time Council has directed staff to first begin the STR registration process to collect data on how many rentals we have in Georgetown and where they are located. The regulation will be on a low to moderate level and include annual permit registration and hotel occupancy tax collection.
Why regulate short-term rentals in the first place?
There are many good reasons why local government leaders are focused on finding ways to manage the rapid growth of short-term rental properties in their communities. To name a few:
- Increased tourist traffic from short-term renters has the potential to slowly transform peaceful residential communities into “communities of transients” where people are less interested in investing in one another’s lives, be it in the form of informal friend groups or church, school and other community-based organizations.
- Short-term renters may not always know (or follow) local rules, resulting in public safety risks, noise issues, trash and parking problems for nearby residents.
- So-called “party houses” i.e. homes that are continuously rented to larger groups of people with the intent to party can severely impact neighbors and drive down nearby home values.
- Conversion of residential units into short-term rentals can result in less availability of affordable housing options and higher rents for long-term renters in the community.
- Local service jobs can be jeopardized as unfair competition from unregulated and untaxed short-term rentals reduces demand for local bed & breakfasts, hotels and motels.
- Towns often lose out on tax revenue (most often referred to as Transient Occupancy Tax / Hotel Tax / Bed Tax or Transaction Privilege Tax) as most short-term landlords fail to remit those taxes even if it is required by law.
- Lack of proper regulation or limited enforcement of existing ordinances may cause tension or hostility between short-term landlords and their neighbors
- The existence of “pseudo hotels” in residential neighborhoods (often in violation of local zoning ordinances etc.) may lead to disillusionment with local government officials who may be perceived as ineffective in protecting the interests of local tax-paying citizens.
View source for the above answer.
How will Georgetown’s program compare to other cities?
This is to be determined. Staff are still working through the details of the low-to-moderate regulation model for Georgetown and completing a best practices study of around 15 cities in the area. During the November 2022 Council presentation, staff highlighted some examples of programs in the area.
How can I get involved? Will there be opportunities for public input
Staff expect to return to Council with regulatory details early in the new year. This FAQ will be updated when a date for a public hearing is set. In the interim, if you have questions or comments, contact Kim.McAuliffe@georgetown.org.
I live next door to a short-term rental. Where do I go if I need to report any issues?
Code Compliance is the correct department to report issues regarding trash and debris – 512-930-3606. If the occupants are creating an excessive amount of noise, or if you believe a parking violation is occurring on a city street, please call the police non-emergency number at 512-930-3510. If a crime is being committed or an emergency situation exists, please call 911.