Cape Coral to charge annual tax on vacation rentals to track code compliance

Cape Coral City Council has unanimously approved an annual business tax on vacation rentals in hopes that a tax would help the city track the location of rentals and keep them in compliance with city codes.

A vacation rental is defined under state law as any unit in a condominium, cooperative, or family house and dwelling unit that is used as a public lodging establishment. The amount of business tax charged will be $5.50 per bedroom rented.

The city estimates that there are 5,000 vacation rentals in Cape Coral, which means the city will take in an estimated $82,000 annually from the tax.

Mark Mason, director of financial services at Cape Coral, said the city gets noise complaints but can't tell if the people causing the noise are indeed renters.

He said the city will begin scouring vacation rental websites to begin enforcing the ordinance.

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According to Councilwoman Gloria Tate, this is nothing new for the city to do, referring to past problems with rental owners not paying other taxes.

"There were a lot of people at that time that weren't paying sales tax, for instance, or bed tax," Tate said. "And so they used to get volunteers to look at different websites to make sure that they were paying their fair share."

While the ordinance itself only requires a business license, the city is hoping to use this as a way to have these locations follow the city's code.

"Following the code associated with the business license tax, that's the more important part," Mason said.

Addressing the complaints, Tate added that everyone living in Cape Coral, whether seasonally or year-round, needs to follow nuisance abatement and noise ordinances.

"You can have just as many problems with an annual rental as you can have as a seasonal rental," Tate said. "Everybody has the same responsibilities to keep their property in good condition, to follow the rules, to follow the noise ordinance, and keep the trash under control."

The state of Florida is in charge of regulating vacation rentals and prevents prohibiting vacation rentals or regulating the duration or frequency of vacation rentals. However, the city of Cape Coral follows up with code enforcement to ensure that residents are following the city's ordinances and laws.

Kevin Besserer, director of public policy for the Royal Palm Coast Realtor Association, said the association met with the city of Cape Coral about the ordinance and supports the city's efforts.

"We were happy to support the ordinance. We're trying to be good partners with the city and make sure people are following the rules so we can operate a business and our members can continue to be successful," Besserer said.

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An additional code enforcement officer was brought in this year to help with seasonal and annual renters, according to Tate.

"In general code enforcement has a huge amount of responsibility," Tate said. "So we need to continually grow that as the city grows. More residents, more need for code enforcement."

Councilwoman Jennifer Nelson said all the city is doing is extending the business license to another arm of the hospitality industry.

"This makes perfect sense to me," Nelson said. "Then we will have these types of hospitality units registered with the city so if there are issues with code compliance or law enforcement, we have a record."

This article originally appeared on Fort Myers News-Press: Cape Coral vacation rentals will pay an annual business tax