Milwaukee, Wisconsin Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations Milwaukee, Wisconsin?

Short-term rentals have transformed Milwaukee's hospitality landscape, offering visitors unique alternatives to traditional accommodations. However, operating an Airbnb or VRBO in Milwaukee requires navigating specific regulations designed to balance tourism benefits with neighborhood preservation. Here's what you need to know about the regulatory framework governing short-term rentals in Milwaukee.

Starting a Short-Term Rental Business in Milwaukee, Wisconsin

Starting a short-term rental business in Milwaukee begins with understanding the city's licensing requirements. In Milwaukee, property owners must obtain a Tourist Rooming House license for each rental property they operate. Unlike some cities that require special use permits, Milwaukee allows short-term rentals without this additional hurdle, though the Tourist Rooming House license is mandatory.

The application process involves several steps. First, you'll need to complete a permit application through the Department of Neighborhood Services (DNS), which oversees short-term rentals in the city. This application requires detailed property information, proof of insurance, and potentially a floor plan or landlord consent if you're not the property owner.

Wisconsin state law prevents local governments from prohibiting rentals for periods of 7 consecutive days or longer, but municipalities like Milwaukee can still regulate through zoning, building standards, permits, and taxation. This creates a somewhat complex regulatory environment where both state and local rules apply.

Property owners must also register with the city for tax purposes. Short-term rental operators in Milwaukee are responsible for collecting and remitting several taxes, including property tax, innkeeper's tax, and gross income tax. Maintaining accurate records of rental activities and tax payments is essential, as the city may conduct compliance audits.

Local hosts often share their experiences navigating these regulations. One Wisconsin host mentioned on a real estate forum that regulations vary significantly between counties: "Definitely check with the local municipality...Even areas of northern Wisconsin are restrictive. Thankfully mine is zoned recreational, so I was able to get permitting that allows less than 7 day rentals year round, but still need someone within 25 miles." This highlights the importance of researching specific zoning requirements before investing.

The Department of Neighborhood Services conducts inspections to ensure properties meet health, safety, and zoning requirements. Hosts must cooperate with DNS inspectors and address any issues promptly to maintain their licenses.

Annual renewal of your Tourist Rooming House license is required to continue operating legally. The renewal process typically involves demonstrating continued compliance with safety codes and paying the renewal fee. Failing to renew or comply with regulations can result in penalties or license revocation.

For prospective hosts, it's advisable to thoroughly research Milwaukee's short-term rental regulations before purchasing property or converting existing property into a short-term rental. The regulatory landscape continues to evolve, so staying informed about changes to local ordinances is crucial for long-term success in Milwaukee's short-term rental market.

Short-Term Rental Licensing Requirement in Milwaukee, Wisconsin

Operating a short-term rental in Milwaukee requires obtaining a Tourist Rooming House license through the City of Milwaukee Department of Neighborhood Services (DNS). This licensing process ensures your property meets safety standards and complies with local regulations before hosting guests.

To secure your Tourist Rooming House license in Milwaukee, you'll need to submit:

• Completed Tourist Rooming House License Application form
• Completed Fire & Safety Self-Certification Checklist
• Detailed floor plan of your rental unit
• Proof of ownership (deed, land contract, or current property tax bill) or lease/rental agreement if you're not the owner
• State of Wisconsin Seller's Permit
• Proof of insurance coverage for your rental property
• Payment of the initial license fee ($100)

You can submit your application package either online through Milwaukee's Land Management System (LMS) or in person at the Department of Neighborhood Services office located at 841 N. Broadway, Room 104, Milwaukee, WI 53202.

After submitting your application and required documents, DNS will review your materials and contact you with instructions to pay the license fee. Once payment is processed, an inspector will schedule a property inspection to verify compliance with building codes and fire safety requirements.

The entire licensing process typically takes 2-4 weeks from application to approval, assuming your property passes inspection and all requirements are met. Your Tourist Rooming House license must be renewed annually to maintain legal operation.

Operating without a proper license can result in significant penalties. In Milwaukee, unlicensed operators may face fines ranging from $150-500 for first offenses. Continued non-compliance can lead to steeper fines, permit revocation, and potential legal action against the property owner.

Beyond the city license, Milwaukee short-term rental operators must also register with the Wisconsin Department of Revenue to collect and remit the required taxes, including:

1. Wisconsin state sales tax (5%)
2. Milwaukee County sales tax (0.5%)
3. City of Milwaukee room tax (10%)

Maintaining accurate records of your rental activities and tax payments is essential, as you may be subject to audits or compliance checks by city officials. Regular inspections may also be conducted to ensure ongoing compliance with health and safety standards.

Required Documents for Milwaukee City, Wisconsin Short-Term Rentals

To legally operate a short-term rental in Milwaukee, you'll need to prepare and submit several essential documents. Each serves a specific purpose in ensuring your property meets safety standards and regulatory requirements.

1. Tourist Rooming House License Application: This official form, available through the City of Milwaukee Department of Neighborhood Services, serves as your formal request to operate a short-term rental. It collects information about your property and contact details.
2. Fire & Safety Self-Certification Checklist: This document confirms your property meets fire safety standards, including functional smoke detectors, carbon monoxide alarms, and fire extinguishers. This checklist is part of the licensing package and helps ensure guest safety.
3. Floor Plan: A detailed layout of your rental unit showing room dimensions and identifying areas designated for rental use. This helps officials verify your property meets occupancy limits and building code requirements.
4. Proof of Ownership or Lease Agreement: Documentation proving your legal right to use the property as a short-term rental. This can be a deed, land contract, current property tax bill, or if you're not the owner, a lease agreement with explicit permission to sublease.
5. State of Wisconsin Seller's Permit: Obtained from the Wisconsin Department of Revenue, this permit allows you to collect and remit state sales taxes on your rental income. This is required unless you exclusively use platforms like Airbnb that collect taxes automatically.
6. Proof of Insurance: Evidence of homeowner's or business liability insurance coverage for your rental property. This protects both you and your guests in case of accidents or property damage.
7. Property Manager Information: If you live more than 25 miles from your rental property, you must designate a local property manager. You'll need to provide their name, address, and contact information, as they'll serve as your local representative.
8. Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) License: This state-level license is required for all tourist rooming houses and must be obtained before your city license can be approved.
9. Lodging Establishment Health Inspection Form: Your property must pass a health inspection conducted by the state's designee. This inspection verifies your rental meets health and safety standards for accommodating guests.
10. Site Plan: A diagram showing available on-site parking spaces for guests. This helps ensure your property won't create parking congestion in the neighborhood.
11. Resident Agent Designation: Documentation identifying the person responsible for managing the property, addressing complaints, and ensuring compliance with regulations. This person must be available 24/7 to respond to issues.

Each of these documents plays a crucial role in the licensing process and helps ensure your short-term rental operation complies with Milwaukee's regulations while providing a safe environment for guests.

Milwaukee City, Wisconsin Short-Term Rental Taxes

Operating a short-term rental in Milwaukee subjects hosts to several tax obligations that must be carefully managed to ensure compliance and profitability. Understanding these tax requirements is essential for anyone entering the short-term rental market in Milwaukee.

Wisconsin State Sales Tax: All short-term rental stays of 29 nights or less in Milwaukee are subject to Wisconsin's 5% state sales tax. This applies to the full listing price, including cleaning fees and any additional guest charges.

Milwaukee County Sales Tax: In addition to the state sales tax, Milwaukee County imposes an additional 0.5% county sales tax on short-term rentals, bringing the combined sales tax rate to 5.5%.

Basic Room Tax: Short-term rental operators in Milwaukee County must collect a 3% basic room tax on the total rental amount, including the listing price, cleaning fees, and any guest fees.

Additional Room Tax: The City of Milwaukee adds a substantial 7% additional room tax on top of the basic room tax, resulting in a total room tax of 10% for properties within Milwaukee city limits.

Innkeeper's Tax: This 10% tax applies to short-term rental stays in Milwaukee and is collected in addition to the state sales tax. This appears to be the same as the combined basic and additional room taxes mentioned above.

Property Tax: Short-term rental properties in Milwaukee are subject to the same property tax rates as other residential or commercial properties in the city. These rates vary based on the property's assessed value and location.

Gross Income Tax: Rental income generated from your short-term rental must be reported on your income tax returns. This applies to both federal and state income taxes, with rates varying based on your total income and filing status.

Potential Tax Deductions and Write-Offs

While the tax burden may seem significant, short-term rental hosts in Milwaukee can benefit from various deductions to reduce their taxable income:

1. Property-Related Expenses: You can deduct mortgage interest, property taxes, insurance premiums, and utilities proportionate to rental usage.
2. Depreciation: The IRS allows you to depreciate the cost of your rental property (excluding land) over 27.5 years, providing a significant annual deduction.
3. Operational Costs: Expenses for cleaning services, maintenance, repairs, supplies, and furnishings are generally deductible.
4. Professional Services: Fees paid to property managers, accountants, attorneys, and other professionals related to your rental business can be deducted.
5. Marketing and Advertising: Costs associated with listing your property on platforms like Airbnb and VRBO, as well as other marketing expenses, are typically deductible.
6. Travel Expenses: If you travel to check on your property or perform maintenance, you may be able to deduct these costs, including mileage for property-related trips.

To maximize these deductions, maintain detailed records of all expenses and consider consulting with a tax professional familiar with short-term rental regulations in Wisconsin to ensure you're taking advantage of all available tax benefits while remaining compliant with tax laws.

Wisconsin Wide Short-Term Rental Rules

Milwaukee short-term rental hosts must navigate not only city-specific regulations but also broader Wisconsin state laws that establish the foundation for all short-term rental operations throughout the state.

The cornerstone of Wisconsin's short-term rental regulation is the 2017 legislative act that significantly shaped the current regulatory landscape. This law prevents municipalities, including Milwaukee, from prohibiting rentals of 7 consecutive days or longer. This means that while Milwaukee can regulate short-term rentals through licensing, taxation, and zoning, it cannot implement an outright ban on rentals that last a week or more.

Under Wisconsin state law, any property owner who rents their property for more than 10 nights annually must obtain a Tourist Rooming House license from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP). This requirement applies to all Milwaukee hosts and involves:

1. Passing a pre-licensing inspection
2. Paying the annual license fee (typically $110)
3. Complying with health and safety standards
4. The state also imposes operational requirements that affect Milwaukee hosts:
5. Properties cannot be rented for more than 180 consecutive days in a 365-day period
6. Hosts must maintain a guest register with names and addresses
7. Written business records must be kept for each rental transaction
8. A designated operator must be located within 25 miles of the property

Wisconsin tax law requires short-term rental operators to register with the Wisconsin Department of Revenue and obtain a seller's permit to collect and remit the 5% state sales tax, unless they exclusively use platforms that collect taxes automatically.

The state also establishes occupancy limits for short-term rentals, generally restricting occupancy to two people per bedroom plus two additional occupants, or the maximum occupancy permitted by the state license, whichever is less.

For Milwaukee hosts, these state-wide regulations serve as the baseline compliance requirements, with city-specific rules adding additional layers of regulation. Understanding both state and local requirements is essential for lawful operation, as non-compliance at either level can result in penalties, fines, or license revocation.

The Wisconsin Room Tax Law further requires that all short-term rental operators collect and remit applicable room taxes, which in Milwaukee includes both the state-mandated taxes and the city's additional room tax requirements.

These state-wide regulations create a consistent framework across Wisconsin while still allowing municipalities like Milwaukee to implement additional requirements tailored to their specific community needs and concerns.

Does Milwaukee City Strictly Enforce STR Rules?

Based on insights from local hosts and real estate forums, Milwaukee appears to take a relatively moderate approach to short-term rental enforcement compared to other major cities. While regulations exist on paper, the actual enforcement has historically been less aggressive than in other markets.

According to discussions on Reddit, some hosts have operated "illicit Airbnbs" in Milwaukee with minimal interference from authorities. One host shared their experience running an unauthorized short-term rental in an apartment complex where management "could barely be bothered to maintain the illusion of caring" even when a guest accidentally mentioned the Airbnb to the leasing office. This suggests a somewhat relaxed enforcement environment.

Milwaukee is generally considered moderately Airbnb-friendly, though not without restrictions. The city allows short-term rentals without requiring special use permits, which is more permissive than many comparable cities. However, hosts must still obtain a Tourist Rooming House license to operate legally. This balanced approach places Milwaukee in the middle of the spectrum between highly restrictive and completely unregulated markets.

Real estate professionals in Milwaukee confirm that while the city itself has relatively few restrictions, the suburbs may be implementing tighter controls. The consensus among hosts is that Milwaukee offers a more favorable regulatory environment than many coastal cities, though hosts should still prepare for potentially increased scrutiny as the city's tourism profile rises with major events like the upcoming RNC.

How to Start a Short-Term Rental Business in Milwaukee City, Wisconsin

Starting a short-term rental business in Milwaukee requires careful planning and adherence to local regulations. Follow these steps to successfully launch your venture:

Research Local Regulations

Begin by thoroughly researching Milwaukee's short-term rental laws, including zoning restrictions, licensing requirements, and tax obligations. Visit the City of Milwaukee's Department of Neighborhood Services website for detailed information. Understanding these regulations before investing will help you avoid potential legal issues and unexpected costs later.

Select an Appropriate Property

Choose a property that meets local zoning requirements and is well-suited for short-term rentals. Consider factors like location (proximity to attractions, business districts, or the upcoming RNC venue), amenities, and potential guest appeal. Ensure the property is in a zone that permits short-term rentals and verify that any HOA or condo association rules don't prohibit them.

Apply for a Tourist Rooming House License

Submit an application for a Tourist Rooming House license through the City of Milwaukee Department of Neighborhood Services. This is a mandatory requirement that ensures your property meets safety standards and complies with local regulations. The application fee is approximately $100, and the process typically takes 2-4 weeks to complete.

Prepare Required Documentation

Gather all necessary documents, including the completed Tourist Rooming House License Application, Fire & Safety Self-Certification Checklist, detailed floor plan, proof of ownership or lease agreement with permission to sublease, Wisconsin Seller's Permit, and proof of insurance coverage.

Register for Tax Collection

Obtain a Wisconsin Seller's Permit to collect and remit state sales tax (5%) and county sales tax (0.5%). Register with the City of Milwaukee Treasurer's Office to collect and remit the 10% room tax. Set up systems to track these tax obligations and maintain accurate records of all rental transactions.

Secure Appropriate Insurance

Purchase comprehensive insurance coverage specifically designed for short-term rental properties. Standard homeowner's policies typically don't cover commercial use, so you'll need specialized coverage that includes liability protection, property damage, and potential loss of rental income.

Prepare Your Property for Guests

Furnish and equip your rental property with essential amenities that meet or exceed guest expectations. This includes comfortable furniture, quality linens, fully-equipped kitchen, reliable Wi-Fi, entertainment options, and basic supplies. Consider hiring a professional photographer to showcase your property effectively.

Create Detailed House Rules and Safety Information

Develop clear house rules that outline expectations for guests, including quiet hours, maximum occupancy, parking instructions, and policies regarding pets, smoking, and parties. Prepare a safety information binder with emergency contacts, evacuation routes, and instructions for using appliances and amenities.

Establish a Property Management System

Decide whether you'll self-manage or hire a property management company. If self-managing, set up systems for guest communication, cleaning between stays, maintenance, and addressing emergencies. If you live more than 25 miles from the property, you must designate a local property manager who can respond to issues within 25 miles.

Market Your Property Effectively

Create compelling listings on platforms like Airbnb and VRBO with high-quality photos, detailed descriptions, and competitive pricing. Research similar properties in your area to determine appropriate rates, considering seasonal fluctuations and special events like the upcoming Republican National Convention that could significantly impact demand.

By following these steps and maintaining compliance with Milwaukee's regulations, you can establish a successful and legally compliant short-term rental business that provides value to guests while generating reliable income.

Who to Contact in Milwaukee City, Wisconsin about Short-Term Rental Regulations and Zoning?

For information about short-term rental regulations and zoning in Milwaukee, your primary point of contact should be the Milwaukee Department of Neighborhood Services (DNS). This department oversees all aspects of short-term rental operations in the city, from licensing to compliance inspections.

Milwaukee Department of Neighborhood Services

841 N. Broadway, Room 104
Milwaukee, WI 53202
Phone: (414) 286-2268
Email: dns@milwaukee.gov

The Environmental Division of DNS, which specifically handles Tourist Rooming House applications, is located in Room 105 of the same building. When submitting applications or documentation in person, this is where you'll need to go.

Beyond official government resources, Milwaukee hosts can benefit from connecting with several community groups and forums:

Wisconsin State Airbnb Host Community: A Facebook group where local hosts connect, share experiences, and ask questions about operating in the Wisconsin and Milwaukee market.

BiggerPockets Forums: The Milwaukee section on BiggerPockets provides a platform for hosts to discuss local regulations, share advice, and network with other hosts in the area.

These resources can provide valuable insights from experienced hosts who have already navigated Milwaukee's regulatory landscape, offering practical advice that complements the official information available from the Department of Neighborhood Services.