So, you’re interested in owning a residential investment opportunity in Fountain Hills? There are some things you need to know before making that decision. We’ve done the research for you about what you can and cannot do when it comes to tax rates.
CAN I RENT MY HOME?
In Fountain Hills and Scottsdale, there are few deed restrictions when it comes to renting your property. However, many rentals that are located within Homeowner’s Associations (HOA) regulate the minimum number of days you must rent at a minimum. It’s always a good idea to read the HOA’s rules and regulations.
HOW LONG CAN I RENT IT?
There are generally no restrictions about the length of time your residential property can be rented. However, many cities, including Fountain Hills and Scottsdale, are auditing rental online services to determine if individuals are renting on a daily basis vs 30-day or longer term. This is due to the tax code.
WHAT IS THE TAX CODE?
Rentals are subject to city tax requirements. In Fountain Hills, taxes for long-term rentals, defined as more than 30 days, are 1.6%. If the activities are less than 30 days, the owner is subject to paying hotel (or bed) tax rates which can be as high as 10%.
HOW STRONG IS THE ENFORCEMENT?
Most states, including Arizona, are cracking down on VRBO, Homeaway and AirBnB rentals because they have come realize how much tax income was leaking out of the system. These taxes previously came through the hotel bed taxes and are now being shared with these online rental companies.
WHERE CAN I GET MORE DETAILS?
The following links contain useful information provided by the Arizona Department of Revenue:
- https://azdor.gov/sites/default/files/media/TPT_RATETABLE_10012018.pdf (this is a great resource for hotel/bed tax rates at both the state and local level!)
Here’s a great article that addresses these issues, written for short term rental property owners: https://www.avalara.com/mylodgetax/en/resources/vacation-rental-tax-guides/arizona.html