Residential Rental Licensing
Can Paradise Valley residents rent their homes?
Yes. Residential-zoned property rental is permitted by Section 1004 of the Town of Paradise Valley Zoning Ordinance. However, the entire property must be rented as a whole. Accessory buildings may not be leased, subleased, or rented separate and apart from the main building and no main building may be leased, subleased, or rented separate and apart from an accessory building.
The Town of Paradise Valley levies a privilege tax on the gross business receipts derived from the rental of commercial and residential properties. All residential and commercial rental properties are subject to the tax.
If you rent your property for more than 30 consecutive days, the gross receipts from the rental are subject to a 1.65% tax.
Short-term (vacation) Rental
If you rent your property for less than 30 consecutive days, the following taxes apply:
|Arizona Transient Lodging Tax||7.27%|
|Paradise Valley Transient Lodging Tax||3.40%|
|Paradise Valley Sales Tax||2.50%|
Residents are required to apply for a Transaction Privilege (Sales) Tax (TPT) License from the Arizona Department of Revenue (DOR) and post their license number on each online market place advertisement. Even though online market place websites will remit taxes to the Department of Revenue on your behalf, owners are still required to file a tax return showing the gross receipts received from the online market place with a deduction equal to the amount received from the online market place.
- DOR Residential Rental TPT License Application
- DOR Bulletin Online Lodging Marketplace Guidance Updated July 2019 (OLM Operators, owners, and Property Managers must list their Transaction Privilege Tax License number on each online advertisement.)
- DOR Bulletin Explaining Residential Rental Requirements
- DOR Bulletin Residential Rental Tax
- DOR Information on Registration for Property Management Companies
- Maricopa County Assessor Residential Rental Property Registration (PDF)
Things to Keep in Mind Before You Rent
As you know, Paradise Valley prides itself on our unique setting, pristine neighborhoods, top-rated resorts, and outstanding quality of life. The Town government seeks to protect the Town’s unique and valued character while upholding the law, applying the law fairly and impartially, and limiting its interference with individual decision making and property rights. The information shared below is provided for informational purposes only, and is not intended to be a comprehensive listing of the law, rules, or issues concerning short-term rentals. You may wish to consider the following:
- Pursuant to State law, the short term rental may only be used for residential purposes. Therefore, the property, when rented, is not permitted as a location for: adult oriented business activities; housing sex offenders; operating or maintaining a structured sober living home; liquor control; and commercial event rental activity such as, hosting weddings, bar or bat mitzvahs, auctions, art openings, musical events, fund raisers, business meetings and other functions of a commercial nature.
- State law requires you to obtain a sales tax license (a.k.a. a Transaction Privilege Tax (TPT) license) and pay appropriate sales tax. (See links above).
- Short-term rental properties are governed by the same noise, trash and nuisance ordinances as any other residence.
- Standard Homeowners’ insurance - including liability (bodily injury, damage to property of a third party such as a renter, etc.) and property insurance - may exclude incidents or claims related to short-term rentals.
- It is the Town’s legal position that overstays or refusals to leave by a short-term renter, and possibly allegations of property damage or misappropriation, as a general matter, are not criminal in nature; rather, they are governed by civil landlord-tenant law. Thus, if you call the Paradise Valley Police Department for such an issue, the officer and the Department will not remove the renter absent a court order or other criminal activity as home rentals are subject to the eviction process through the Arizona residential landlord/tenant act.
- If the property is on a septic tank, review the capacity and operational requirements that additional loading from higher occupancy rentals may place upon the functionality of the system.
In sum, the field of short term vacation rentals via online listings represents an evolving area with various impacts, costs and benefits - both known and unknown. We hope the information above proves helpful. Again, please be aware that the foregoing items are not intended to be a comprehensive listing or set of the issues impacting short-term rentals. The Town follows a limited government model, and does not seek to identify all federal and state laws that may impact short-term rentals or to identify all of the possible legal consequences of owning or operating a short-term rental. Rather, the Town’s role is largely reactive in this regard, in investigating and responding to any complaint received about a home in Paradise Valley - no matter the use or status of the home.
For questions about licensing, please call Duncan Miller, Town Clerk, at 480-348-3610.