1. How do Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott define a short-term (Airbnb) rental (STR)?
Following Arizona’s definition of a short-term (Airbnb) rental, the majority of cities (such as Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott) class such properties as lodgings where guests can rent out a property for a short duration of time consecutively. All short term rental properties must follow the regulations of the Revised Statutes Section 9-500.39 and must be utilized for residential purposes.
The Arizonan Department of Revenue defines 30 days or less for Airbnb residential rental properties. These properties, when rented out, must pay Arizona’s transaction privilege tax.
https://www.azleg.gov/ars/9/00500-39.htm
https://awning.com/post/arizona-short-term-rental-laws
2. Can investors own more than one vacation rental property in Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott?
Yes! If you have been looking to purchase properties in Sedona, Tucson, Lake Havasu, Flagstaff, or Prescott to rent out as a short-term rental, the good news is that there is no limit to the number of properties you can rent.
It is also worth considering that non-owner rentals are also allowed, meaning that investors can purchase additional properties alongside their primary residence to rent out as an STR. However, there may be a limit on the number of properties per zone.
3. Do Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott have any zoning restrictions for STRs?
The zoning restrictions for short-term (AIrbnb) rentals will vary depending on the region in question. As standard, Arizona law doesn’t specify any basic restrictions, but individual cities may implement these.
- Sedona: All Airbnb rentals must be in a permitted zoning district
- Tucson: STRs are generally allowed in most commercial and mixed-use zones, but they may not always be permitted in exclusively residential zones.
- Lake Havasu: Short-term rentals, depending on their nature, may be allowed in certain residential zones; however, these are primarily found in mixed-use or special-purpose zones.
- Flagstaff: Primarily found in commercial districts, although some exceptions may be made for residential zones for bed and breakfasts.
- Prescott: With a permit, Prescott primarily allows STRs in commercial tourism zones, but these may also be allowed in other zones.
https://www.sedonaaz.gov/home/showpublisheddocument/36443/638155980691930000
https://www.prescottvalley-az.gov/DocumentCenter/View/375/Chapter-13—Zoning-PDF
4. In Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott can an investor own and operate their AirBnB property as a business entity?
When operating a short-term (Airbnb) rental property, as standard, Arizona rules do not specifically define that investors cannot operate their AirBnB property as a business entity.
As such, for investors looking to run a Airbnb rental property, it is possible to do so either as an individual or as a business entity. Nevertheless, a permit must be obtained before operating a short-term rental property.
https://govos.com/blog/5-things-to-know-about-arizona-sb1168/
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5. In Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott, can investors register accessory dwelling units (ADU), duplexes, and multifamily homes as Vacation Rentals?
Arizona state law prevents cities and municipalities from preventing the use of a property for short-term (Airbnb) rental applications based on occupancy, use, or classification.
As such, multi-family homes, duplexes, and ADUs can all theoretically be used as vacation rentals. However, it is worth checking the specific city’s regulations first to ensure this is the case for your region. It is also crucial to check that your property meets the necessary parking regulations for Arizona short term rental properties.
https://www.tucsonaz.gov/pdsd/accessory-dwelling-units-code-amendment/FAQ
6. What are the Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott requirements for obtaining a Vacation Rental License?
In order to obtain a vacation rental license in Arizona, several key requirements need to be met. These may include:
- Obtaining a TPT license from the Arizona Department of Revenue
- Get a Conditional Use Permit for non-owner-occupied properties
- Registering with the city in question
- Obtain suitable insurance for the vacation rental
- Individual and designated 24/7 contact information
You may need to complete rental forms when applying for a vacation rental permit in your chosen city. Each city may have slightly different vacation rental requirements, which is worth keeping in mind as part of your decision; these are often outlined on the application forms for your specific city.
https://www.rentresponsibly.org/az/flagstaff/
7. What are the costs associated with a Vacation Rental License in Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott?
Though the exact permits and requirements may vary slightly by city, the cost of obtaining a vacation rental permit in Arizona’s cities – including Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott – is usually $250. However, it is worth keeping in mind that additional fees may be applicable for further works, regulations, and the like as necessary.
8. Do Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott have Vacation Rental occupancy limits?
Following standard Arizona legislation, there are typically no restrictions regarding occupancy limits on Airbnb rental properties across Arizona, including in Tucson, Lake Havasu, Flagstaff, and Prescott. Moreover, local legislation should be consulted, as cities are allowed to impose a limit of up to two occupants per bedroom available; as such, a property with two bedrooms may have a limit of four guests.
https://www.tucsonaz.gov/pdsd/accessory-dwelling-units-code-amendment/FAQ#_ftn1
9. Do Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott require an inspection for investors to obtain an STR license? What are the physical and structural requirements for a vacation rental?
In Arizona, all investors looking to operate a property as a short-term (Airbnb) rental will need to obtain licenses to do so, following recent changes to Arizonan laws. Short term licensing fees are usually around $250.
The type of additional licenses required will depend on how the property is planned to be rented; for example, investors may only require a seasonal TPT license and a business license to rent out the property for Super Bowl use. This should then be canceled if the business is not going to continue.
Alternatively, if the rental is going to be an ongoing STR, the TPT license will need to be ongoing, and the investor will need to seek a business license from the relevant city.
Some of the main physical and structural requirements for Airbnb rentals in Arizonan cities such as Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott include:
- Adequate parking access for all occupants of the property
- Strong and stable structural foundations and interior/exterior walls
- Must adhere to all local and state building safety regulations
https://codes.iccsafe.org/codes/arizona
https://www.flagstaff.az.gov/494/Building-Safety
10. Do Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott have any responsible agent requirements?
As per Arizona’s requirements, all rental properties need to have a responsible agent or representative available 24/7, and the contact details for this individual must be provided at the time of submitting a license request. The responsible agent should also be available for any queries or complaints received from the public regarding the STR property.
11. Do Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott have specific insurance requirements for a Vacation Rental?
All vacation rentals in Arizona need to have obtained the necessary insurance prior to operating, which may include – but not necessarily be limited to – vacation rental insurance and any additional short-term (Airbnb) rental insurance policies. Many providers will offer short term rental plans that cover the main insurance policies the investor will need in one place.
https://insurancebrokersofaz.com/short-term-rental-property-insurance-coverage/.
https://www.insuranceproaz.com/short-term-rental-insurance-in-arizona
https://www.axios.com/local/phoenix/2022/11/21/arizona-cities-regulations-short-term-rentals
12. What are the duration and renewal terms of a Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott Vacation Rental license?
Arizonan short-term (Airbnb) rental investors need to obtain a TPT license to operate a short-term rental, which remains active for approximately one year. TPT licenses must be renewed by the 1st of January each year. This should be canceled upon terminating the Airbnb rental business. Moreover, the investor will need to take out a business license, which may expire depending on the terms of the specific city, and a short-term rental license, which also tends to last for one year.
https://azdor.gov/transaction-privilege-tax/short-term-lodging
https://azdor.gov/transaction-privilege-tax/tpt-license/renewing-tpt-license
13. In Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott, do Airbnb and VRBO remit taxes on the host’s behalf? Are there any taxes that the host must track and pay directly to Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott?
Yes – as per Arizona law, online booking platforms must collect state and local taxes on behalf of the investor. In accordance with this, if you have been looking to begin operating a short-term rental property in Arizona through AirBnB or VRBO, your taxes should be paid automatically.
https://www.avalara.com/mylodgetax/en/resources/vacation-rental-tax-guides/arizona.html
14. Who should I contact if I have questions regarding Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott Vacation Rentals?
For questions regarding the regulations surrounding Sedona, Tucson, Lake Havasu, Flagstaff, or Prescott short-term (Airbnb) or vacation rental licensing, it is usually best to contact the city directly for further support.
However, for more general help, you can contact the Arizona Department of Revenue for support by email at residentialrental@azdor.gov or by phone, (602)716-RENT(7368).
https://azdor.gov/transaction-privilege-tax/short-term-lodging
15. Are there any new laws and regulations that the city is requiring?
Short-term (Airbnb) rental owners in Sedona, Tucson, Lake Havasu, Flagstaff, and Prescott need to be aware of several newly implemented rules and regulations for Arizona state laws.
Recent changes to Arizona state laws mean that investors need to obtain a vacation rental permit from mid-December 2022 to operate their business, alongside other forms of licenses, such as a TPT license.
It is worth keeping in mind here that every city also has its own individual laws that must be followed. In accordance with this, it’s important also to monitor individual cities’ law changes when determining how to manage a short-term rental property.
