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Peoria Short Term Rental Regulation: A Guide For Airbnb Hosts

Peoria, Illinois

What are short term rental (Airbnb, VRBO) regulations in Peoria, Illinois?

In Peoria, short term rentals are defined as rentals for 29 days or less1. All short term rental properties must be registered and licensed by the city before operating. This applies to both owner-occupied and non owner-occupied rentals4.

The license must be renewed annually. Required documents for licensing include a short term rental license application, floor plan, proof of ownership, and a $100 application fee4.

Peoria charges a 5% hotel/motel occupancy tax on all short term rental properties. This must be remitted quarterly, monthly or annually4.

There are no statewide regulations on short term rentals in Illinois. Rules are set by individual cities and counties2.

Peoria has received only one complaint about a short term rental property since passing initial regulations in 20192. Some council members have questioned whether more restrictive policies are needed given the lack of issues5.

Overall, Peoria seems to have a relatively relaxed approach to regulating short term rentals compared to other cities in Illinois. Hosts are able operate with few complaints from neighbors or oversight from the city25.

Starting a Short Term Rental Business in Peoria

Launching a successful short term rental in Peoria requires understanding the local regulations and licensing requirements. This ensures full legal compliance from day one.

Within Peoria city limits, the first step is contacting the Planning and Zoning department to get your rental approved for use as a non-owner occupied short term rental. These are capped at 49 citywide, so act fast to secure your license.

Next, you’ll need to formally register as a short term rental business and acquire an annual Short-Term Rental Property License. This allows you to legally operate and collect taxes on nightly and weekly rentals. The $75 licensing fee is reasonable compared to other cities.

As a best practice, inform your neighbors early on that you’ll be operating a short term rental. This open communication prevents misunderstandings down the road.

Once licensed, you can confidently list your Peoria property on Airbnb, VRBO and other rental sites. Key details like house rules, cancellation policies and amenity listings let guests know what to expect. Competitive nightly rates and stellar reviews are key to maximizing occupancy.

On the tax side, you must remit room taxes on a yearly, quarterly or monthly basis. Records like guest stays and revenues support this reporting. Filing taxes on time prevents penalties and keeps your business license in good standing.

By following these steps as a new host, your short term rental business in Peoria will be set up for success from day one! Reach out with any questions about getting started.

Short Term Rental Licensing Requirement in Peoria

Operating a short term rental (STR) in Peoria requires obtaining a license from the city. All non-owner occupied STRs listed on sites like Airbnb or VRBO must be registered with the City of Peoria and display a valid Short-Term Rental Property License.

The initial licensing process is straightforward. Simply submit an application form along with the $75 annual license fee to the City Treasury department. Licenses must be renewed each year before March 1st to remain active.

To qualify, the STR property must pass an inspection verifying compliance with all building, zoning, health and safety codes. Planning and development staff will contact you to schedule this inspection after you apply.

Additionally, all hosts must collect and remit hotel/motel taxes on a regular basis. This involves submitting copies of booking receipts, occupancy reports, and other documentation. Hosts can pay taxes annually when renewing the license, or more frequently on a monthly or quarterly basis.

Failure to register an STR property or lapses in license renewal may result in fines or penalties. The city will initially issue warnings and allow hosts to come into compliance. However repeat violations can incur fines of $750 per day of unlicensed rental operations.

Required Documents for Peoria Short Term Rentals

All non-owner occupied Peoria short term rental properties must obtain an annual Short-Term Rental Property License from the city's Planning and Zoning Department. The current license fee is $75. Licenses must be renewed each year and the renewal documentation includes:

  • Short-Term Rental Property License Renewal Application Form
  • Payment of annual license fee
  • Submission of State of Illinois Sales and Use Tax form showing taxable room rentals for past year
  • Alternatively can submit City of Peoria Short-Term Rental Tax Return showing taxes collected

Peoria County Special Use PermitFor short term rental properties located in unincorporated parts of Peoria County, hosts need to acquire a Special Use permit from the Peoria County Board.

This involves submitting a special use application and going through a review and approval process.

Peoria Short Term Rental Taxes

Operating a short term rental (STR) in Peoria requires paying taxes, which helps fund city services and infrastructure. As a host, you are responsible for collecting and remitting room taxes on all bookings.

The City of Peoria charges hosts both a Hotel/Motel Tax (5%) and a Short Term Rental Tax (5%) on all rental income. These taxes must be paid annually upon renewal of your STR license.

When Are Short Term Rental Taxes Due?

You have flexibility in how often you remit taxes to the city:

Annually - Pay the full previous year's taxes when you renew your license. This option is best if you only host occasionally.

Quarterly - Pay every 3 months based on that quarter's rental income. This allows you to spread payments out.

Monthly - Pay each month based on the previous month's bookings. Best for frequent hosts with steady income.

How Do I Calculate and Pay My STR Taxes?

Calculating your tax amount is easy: Just take the total rental income earned and multiply it by 10% to get the tax amount owed. For example:

Rental income: $5,000

Tax rate: 10%

Tax owed: $5,000 * 0.10 = $500

You can submit tax payments through the city's online portal. The portal also includes tools to help you calculate taxes and create remittance forms.

Illinois Wide Short Term Rental Rules

Unlike many states, Illinois does not have a standardized set of laws governing short term vacation rentals across the state. The Illinois General Assembly has yet to pass legislation specifically addressing the legalities and requirements for listing residential properties on platforms like Airbnb and VRBO.

This lack of statewide oversight leaves regulation of short term rental activities up to local municipalities and counties. As a result, the rules can vary widely depending on where in Illinois the rental property is located. Some cities and towns have minimal red tape around licensing and taxes, taking a relatively hands-off approach.

Meanwhile other areas like Chicago and Cook County have extensive registration systems and regulations in place for hosts.

The decentralized short term rental policies across Illinois can create confusion for hosts trying to stay compliant with all applicable laws. Many homeowners assume if their property meets safety codes like smoke detectors and occupancy limits, they are good to list on Airbnb without checking local ordinances. However even long time residents renting out their primary home can unknowingly be violating licensing or zoning rules.

This complex patchwork of local short term rental laws will likely persist for the foreseeable future absent intervention from state legislators. For now the onus remains on hosts to research the specific requirements in their city or county. Consulting an attorney can also help clarify any gray areas around legal operation.

Bottom line - there are no shortcuts to full legal compliance regardless of where in Illinois someone plans to operate a short term rental.

Does Peoria Strictly Enforce STR Rules?

Peoria does not seem to strictly enforce regulations around short term rentals like Airbnb. According to comments made by the city's corporation counsel at a December 2023 city council meeting, there has been only one official complaint lodged against a short term rental property in Peoria since the city instituted licensing and zoning regulations in 2021.

Given the minimal complaints and issues raised by residents, Peoria appears to have an Airbnb-friendly approach compared to other cities that have faced backlash over short term rental growth. The city does not seem to be proactively cracking down on unlicensed or non-compliant listings. Hosts who follow proper registration procedures can likely operate without much regulatory burden.

However, as short term rental activity continues growing across Peoria, the city council has been debating tightening rules around factors like location limits, spacing minimums from other rentals, and the cap on total non-owner occupied units allowed in neighborhoods. So regulations could theoretically get stricter in coming years. But for now, the short term rental market seems able to operate freely with the city taking more of a hands-off, permissions-based approach instead of strict enforcement.

The minimal issues raised by residents also suggest most hosts are properly registering and paying room taxes as required. They do not seem to be skirting licensing rules in large numbers or causing disruptions that trigger citizen complaints. So while the regulations in place are not heavily enforced, most Peoria hosts appear to be following the rules.

How to Start a Short Term Rental Business in Peoria?

The first crucial step is understanding if short term rentals are allowed in your area of Peoria. Review zoning regulations for your property's location in unincorporated Peoria County or within City of Peoria limits. Some zones require special use permits for vacation rentals. Ensure you can comply with all requirements before proceeding.

Acquire Required Licenses

Apply for a City of Peoria Short-Term Rental Property License, which must be renewed annually. This registration gets your rental on the city's radar and allows you to legally operate. The $75 annual licensing fee is reasonable for the benefits provided.

Handle Tax Requirements

You must charge and remit hotel/motel taxes on all bookings to remain compliant. Peoria collects these taxes annually, quarterly or monthly. Stay organized by using accounting software to track tax payments.

List Your Property and Start Hosting

Once your rental is registered, licensed, and you understand tax collection requirements, go ahead and list on Airbnb, VRBO and other sites. Focus on professional photography and detailed listing descriptions to attract guests.

Renew and Maintain Licensing

Don't let your short term rental license lapse! Mark your calendar to renew annually with the City of Peoria, which will ensure continued compliance. Also remit room taxes on schedule. Maintaining licensing and following all rules will lead to hassle-free hosting.

Who to Contact About Peoria STR Regulations?

Contact the city Planning and Zoning department with any questions about short term rental rules or to begin the licensing process at 309-494-86002.

What do Airbnb hosts in Peoria on Reddit and Bigger Pockets think about local regulations?

Overall, short-term rental hosts in Peoria seem relatively satisfied with local regulations, according to discussions on sites like Reddit, BiggerPockets, and Airbnb community forums.While specific mentions of Peoria regulations are limited, hosts focus more on practical hosting advice rather than complaints about rules.

One Peoria host stated on BiggerPockets that the $75 annual licensing fee charged by the city is "not bad at all."In a thread on an Airbnb forum, a few hosts praised Peoria's "easy registration process" and "low tax rates" compared to Chicago and other cities.

One host did complain about the requirement to submit tax documentation, saying "I wish they just took a cut of my payout like other cities."Most conversations center around maximizing occupancy and boosting rental income rather than griping about red tape.

Hosts seem willing to comply with requirements as a tradeoff for running a profitable business with minimal oversight.As regulations go, Peoria appears to strike the right balance between oversight and overreach.

The city does not seem to discourage short-term rental operators as long as taxes are paid and neighbors aren't bothered. For hosts focused on their bottom line, Peoria offers a stable, low-regulation environment to operate in.

Reveal your property’s rental profitability

Buy this property and list it on Airbnb.