Massachusetts short-term rental rules for owners

Massachusetts is one of the few states with a real statewide framework for short-term rentals. Chapter 337 of the Acts of 2018, in force since July 1, 2019, pulled short stays into the room occupancy excise, required every operator to register, and set an insurance floor, while leaving each city and town free to decide where rentals may operate. Owners therefore always deal with two authorities: the Commonwealth for tax and registration, and the municipality for use.

Who the law covers

The law reaches owner-occupied, tenant-occupied and investor units alike, whether a whole home or a single room, rented to guests for short stays of up to about a month. Hotels, motels and bed-and-breakfasts have their own rules. Small hosts get one break: a property rented for 14 days or less in a calendar year does not have to collect the tax.

Registration with the Department of Revenue

Every operator registers each property through MassTaxConnect and receives a certificate of registration for it. The Department of Revenue maintains a public registry of lodging operators, and platforms or other intermediaries that collect rent must register and file returns as well. Towns increasingly ask for the state certificate number before issuing their own permit.

How the room tax adds up

• State excise: 5.7%, made of a 5% rate and a 0.7% surtax.
• Local option excise: up to 6% where a municipality has adopted it, and up to 6.5% in Boston.
• Community impact fee: up to 3%, charged only on professionally managed units and on units in owner-occupied two- and three-family houses, where the town has voted it.
• Convention center financing fee: 2.75% in Boston, Cambridge, Worcester, Springfield, West Springfield and Chicopee.
• Cape Cod and Islands Water Protection Fund: 2.75% in Barnstable, Dukes and Nantucket counties.

The "professionally managed" label broadly targets operators running several units in the same municipality; check how it applies before you add a second property in the same town.

Insurance

Each short-term rental must be covered by at least $1 million of liability insurance. A platform's host protection can satisfy the rule if its limits are equal or higher, but it only protects bookings made through that platform, so direct and repeat guests need your own policy.

Local control

Chapter 337 explicitly lets cities and towns regulate short-term rentals by ordinance or bylaw, and outcomes vary widely:

• Boston limits hosting to owner-occupied situations under its 2018 ordinance: a room in the host's home, the host's own unit while they are away, or a unit in a two- or three-family house the owner lives in. Investor units are not eligible, which is why we treat the city as closed.
• Cape Cod towns such as Chatham, Dennis and Wellfleet run local registration tied to the state certificate, generally without an owner-occupancy rule.
• The Berkshires: Great Barrington adopted rules in 2022, and other hill towns have debated or passed bylaws of their own.
• Elsewhere, from the North Shore to the Pioneer Valley, requirements run from simple registration to owner-occupancy conditions or limits on days per year.

Condominiums, septic and sanitary code

A condominium master deed or bylaws can prohibit short stays outright. In unsewered towns, the Title 5 septic permit fixes the number of bedrooms you may legally advertise. The state sanitary code applies to every dwelling offered for rent, and local boards of health may inspect.

Owner checklist

• Read the bylaw for the exact zoning district, including any owner-occupancy or day-count rule.
• Register with the Department of Revenue and keep the certificate number handy.
• Find out which local excise and fees apply, and who collects them for direct bookings.
• Arrange $1 million liability cover, or document the platform's.
• Check condominium documents and the septic permit before you commit.

For owners on Cape Cod and across the rest of the state, we study every request and tell you honestly whether and how we can help.