Rehoboth May Double Rental Tax - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Rehoboth May Double Rental Tax

Posted: 11/17/2017 15:41:00 -05:00 Updated:
(Photo: WBOC) (Photo: WBOC)

REHOBOTH BEACH, Del. - The City of Rehoboth Beach is set to discuss and vote on increasing the city's residential rental tax rate from three percent to six percent at Friday night's commissioner meeting.

The move would apply to places like bed and breakfasts, cottages, cabins and AirBnb's. Mayor Paul Kuhns says it's part of the city's five year capital improvement plan.

"Rentals are a very large part of the local scene if you will, and I think we are getting more and more people into town," Kuhns says. "Whether they're driving into town or they're renting homes, and we have to pay for the public services that we offer."

The money would go to paying for services such as boardwalk clean up, beach clean up, parks and the police department. Kuhns says if approved, the jump would still be less than some neighboring beach towns, with Fenwick charging 7.5 percent, Bethany charging 7 percent and Lewes charging 5 percent.

"I think Bethany and Fenwick probably have more rentals than Lewes but Rehoboth has many more rentals than both of those probably combined," Kuhns says.

Kuhns says this is just the first look at the city's revenue for the capital improvement plan, which he says could cost $3 million in the first year alone. Rehoboth's residential rental tax has not been increased for twenty years, Kuhns says.

Sharon Palmer-Stauffer, the Rental Manager and Vice President of Rental Operations at Coldwell Banker says some property owners could lose income if the taxes are increased, and it could affect one of the area's big moneymakers.

"Tourism is such a fragile industry that we don't want to lose anybody," she says. "Any loss is not a good one. Tourism is such a huge part of our economy down here that we have to take good care of it."

She suggests that in the future places like Rehoboth Beach look at developments that are outside city limits to find more funding, as Sussex County properties do not have a rental tax. 

"All of these complexes who use city services aren't paying anything," she says. So maybe instead of constantly hitting municipalities, the municipalities could somehow throw the net out a little bit broader."

If approved, Kuhns says the increase could begin with contracts signed starting in December of this year. 

Friday's meeting starts at 7 p.m. at Rehoboth City Hall.


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