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Tax assessors target Airbnb properties

When you travel, you may like the convenience and predictability of a hotel chain. On the other hand, if you have ever used Airbnb to find a place to stay on your trip, you know the benefits include a wider variety of locations and a room that feels more like a home. Perhaps your positive experience with Airbnb is what prompted you to list your own property for travelers to Missouri.

If you are one of the many St. Louis property owners who list your property as an Airbnb rental, you may have been shocked to receive a notice from the city assessor's office informing you that their agents had reclassified your property from residential to commercial. Now you are dealing with a property assessment that may more than double your tax bill.

Why the sudden increase?

As guests come to the city for graduations and other events, you may be hoping to rent apartments you own, duplexes or a single-family home to these visitors. Numerous others in Missouri have purchased property for this purpose as a way to earn some income on the side. Until recently, you may have enjoyed a tax rate comparable to residential property owners.

Recently, the St. Louis tax assessor's office did an investigation into local properties listed on Airbnb. The agency determined that some of those properties listed as residential are actually commercial because of the following factors:

  • The property owners do not live on site.
  • Some owners do not even live in the state of Missouri.
  • The property owners offer the units for short-term use, more like a hotel than an apartment.
  • Hotels and other short-term rentals pay a commercial tax rate of 32%, not a residential tax of 19%.

The difference can be significant, and you may be like some who feel that the unexpected hike in rates will be financially devastating. Because the assessor's office made the determination to hike your tax rate by doing online research, there is a chance that the assessment of your property as a short-term commercial rental property is a mistake. In fact, you may already know how often a short-term renter can turn into a long-term tenant.

Fighting for a fair assessment

Even if you have not received a hike in your tax assessment, if you have properties listed on Airbnb, the assessor may reclassify those properties in the future. If this happens, you may wish to dispute the assessment, but you have a limited time to do so. In any case, the right to appeal the assessment of your property is always available to you. If you decide to appeal your property taxes, you would be wise to have strong legal advocacy.

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