California has recently introduced a new personal property tax statement, Form BOE 571-STR, which is mandatory for owners of short-term rental properties starting in 2024.
Here are some things you should know:
- The deadline for filing is May 7th, 2024.
- You must file if the total value of personal property within the rental exceeds $100,000. It is encouraged to file no matter the value, to prevent the county from making assumptions about personal property values and overtaxing.
This is how the tax works:
- Individuals must provide the original cost and acquisition year for all personal property items used in the short-term rental (furnishings, appliances, equipment, supplies, etc.)
- The county then applies a depreciation factor to these items to calculate the net value, which is subject to a tax rate of just over 1%.
- Penalties can be hefty, from 50% for failure to timely file to 75% for fraud. Counties can also cross-check short-term rental platforms, such as Airbnb and VRBO, to ensure compliance.
Short-Term Rental Tax Form (Pages 32-33)
Whether or not you choose to file, don’t be surprised if you receive future correspondence from local counties related to the above. Please let us know if you have any questions.