Taxes Spike On Dozens Of St. Louis Airbnb Properties | St. Louis Public Radio

Taxes Spike On Dozens Of St. Louis Airbnb Properties

May 13, 2019

The St. Louis assessor’s office on Friday sent out letters to the owners of 235 properties listed on Airbnb, informing them that their property value — and taxes — are going up.

The properties have been reclassified from residential to commercial, taking their property tax rate from 19% to 32%.

St. Louis Assessor Michael Dauphin said his office combed through hundreds of properties listed on Airbnb to find ones they believe are commercial enterprises, where the owner lives off-site. They found that the owners of more than half of the reclassified properties live outside of St. Louis, in states as far as California, Colorado and Arizona.

“It is a significant increase, but that’s what every other commercial business owner is paying for their property in the city, so it’s only fair that these short-term rentals are doing the same,” he said, adding that this is an ongoing priority for the city.

“There's been a lot more short-term rental use in the city, so that explains the uptick,” he added.

Dauphin said he hopes the tax hike isn’t seen as an indictment on Airbnb or short-term rentals.

“I use all of these different vendors when I go on vacation with my family. I’m pro-business,” he said. “I don’t think it will affect anyone who is just renting out a single residence in their home.”

Lana Camp-Jessop said she was frustrated to realize this weekend that her rehabbed four-family apartment building off Cherokee Street had been reclassified. She and her husband live on the premises and rent out the other units on Airbnb under the business name Apartment Gallery LLC.

“I’m not sure where I will be able to find the money. I do believe this is going to put us out of business. If we can’t pay our taxes, we’re not going to be able to keep up with it,” she said, adding that she may need to revert to long-term leasing.

Camp-Jessop is organizing members of an existing Facebook group of Airbnb hosts to visit the assessor’s office this week to collectively appeal the measure.

Dmitri Kabargin is one of them. He’s been listing rooms and apartments for rent on Airbnb for the last eight years and currently has seven properties. Two years ago, one of his properties was assessed as a commercial property. As a result, he said his property taxes rose from $1,800 to $5,000 a year. He said at least one more of his properties is now on the commercial list.

Kabargin said the change in tax classification is unclear and uneven, especially for hosts who vary the length of their rental stays.

“It can be changed instantly from short term to long term. Somebody comes in to stay for one month and they like it, and they sign a lease with us for a year. Or somebody signs for a year but something comes up and it becomes short term,” he said. “How do you classify this?”

Dauphin acknowledged that there is room for error in the process — which he said relies on the “internet sleuthing” of a small team of people.

“It’s hard for us to be 100% right when your short-term rental companies don’t necessarily give us all the information. So we’re kind of running blind on all of it,” he said.

He’s encouraging anyone who thinks their properties have been improperly reclassified to reach out to the assessor’s office for an informal appeals process.

Follow Corinne on Twitter: @corinnesusan

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