Short-term vs. Long-term Rental

Short-term rental vs. Long-term lease

Short-term rentals

Short term rentals of residential rooms or properties on sites such as Airbnb or Homeaway is considered a business activity and certain city codes apply.

Short term rentals are permitted by city code in residential areas as a home occupation. However, they may be prohibited by the HOA. A home occupation only permits the resident of the home to engage in the business activity. This means that you cannot rent your property short term if it is not your primary residence. In addition, a city business license is required and can be obtained at www.auroragov.org/obl. In addition, the city’s lodger’s tax of 8% must be collected and remitted on either a quarterly or monthly basis. Note that some short term rental websites may collect the state’s lodgers tax but may not collect the City’s.

You are responsible for any impacts your guests have on the neighborhood including noise or other nuisance violations.

There are no limits on the number of days or the amount of the home that can be used in the short term rental, but it must be your primary residence. Only one listing or booking at a time is allowed. The resident does not need to own the home. If you have a tenant that engages in short term rentals, it is important for you to be aware that the tenant’s use of the property for business activities may impact you. See the Tax and Licensing obligations.

Long-term rentals (leases)

Long term leases (longer than 30 days with up front written agreement) do not require a business license or collection of lodger’s tax.

Tax & License obligations

Business activities in a residential home are allowed in certain circumstances and as long as they comply with the home occupation guidelines. Business activities may generate liability for certain city taxes and licenses. Anyone engaged in business in the City is required to obtain a general business license at www.auroragov.org/obl.

The city requires that a 3.75% sales tax be remitted on sales of tangible personal property. Items used in your business also require that a 3.75% use tax be paid if sales tax was not previously paid on the item. The city has an occupational privilege tax of $2 per month per employee that is matched by $2 per month by the employer. Failure to collect or pay these taxes may result in a lien and potential a distraint (seizure) of assets to cover the tax liability. As a landlord, a business activity by a tenant that fails to remit taxes may result in the posting of a lien for the undue tax balance. The city expects assistance from the landlord in helping to gain compliance or eliminate any unlawful business activities engaged in by the tenant.

A home office would only require a general business license. The city does not have any special registrations for home offices or most home occupations. Short term rentals require a city business license and collection of the city’s lodger’s tax. See short term rentals for more information.

Requirements for a "Home Occupation" Business

The home occupation guidelines are listed below:

Home Occupation is a secondary use that operates business activities within a residential dwelling and follows the Supplemental Regulations for Home Occupations set forth within the Building and Zoning Code Section 146-1220 and Section 146-2001.

Home Occupations require a Business License and must meet the following regulations:

1. The residents of the dwelling unit shall be the only people engaged in the activity;2. The activity is carried on only in the principal building and is incidental and secondary to the primary purpose served by the dwelling;3. The storage of materials to be used in the activity shall be inside either the principal building or an accessory building;4. There shall be no external evidence, which in any way advertise or evidence the performance of the activity;5. Except for parties entering the dwelling unit as a result of prior individual invitation, in no way shall the general public be invited or solicited upon the premises;6. Performance of any personal service including, but not limited to, insurance agents, tax consultants and instruction in the arts, shall be limited to one pupil, client (which may include a partnership, married couple or parties engaged in a joint venture) or customer, at any one time;7. In no way shall the use jeopardize the health, safety or welfare of the occupants or of the surrounding neighborhood; and8. The operation of a Home Occupation shall not cause or encourage an amount of vehicular or pedestrian traffic above what is normally associated with the residential area in which the Home Occupation is conducted. Commercial vehicles less than 7,000 pounds empty weight are permitted on a residentially zoned lot (Building and Zoning Code Section 146-1501). Truck tractors, semitrailers and tow trucks are not permitted on residentially zoned lots.

Note: The conducting of an animal hospital, barbershop, beauty parlor, day care, health clinic, hospital, kennel, or tearoom shall not be deemed to be a home occupation.

Daycare homes/centers, group homes, schools, places of worship or other uses listed in the Building and Zoning Code Section 146-501 Residential Use Table (5.1) within Residential zones are not regarded as home occupations because they are categorized as Live/Work and are regulated separately within the Building and Zoning Code.

All licenses referred to here and issued by the Tax and Licensing Division are not transferable to a new owner. Any change of ownership requires a new application and license, with fees paid according to the provisions applying to that particular license.

City of Aurora | All Rights Reserved | Powered by CivicLive | © 2020 Intrado Corporation.