SALISBURY — A combination of a new lodging tax and an improved economy are giving one local real estate agent his second slow summer in as many years.
An early March nor’easter led to a sluggish summer rental season for Tom Saab in 2018 and he said the new 5.7% tax the state placed on most short-term rentals last December is giving him a case of déjà vu.
“This was supposed to be an Airbnb law,” Saab said. “But what they decided to do was just throw us under the bus and put all, short-term rentals in the mix. If you rent for under 31 days, you now have to charge an 11.7% tax, about 5% to the state and 6% to the town, over and above your rent. If you don’t charge this, the (Department of Revenue) is going to come after you for it.”
Saab went on to say the new taxes cost an average seasonal renter an additional $300 to $400 per stay.
“We have had a number of people who come here and they are middle-income, blue-collar America who come to rent here,” Saab said. “People come down here with a budget. Right away, you are taking another $300, $400 away from them in taxes. That is less money for them to spend down in the entertainment center. Less money to spend at say, Joe’s Playland or Tripoli’s Pizza and so on and so forth.”
Merrimack Valley Chamber Of Commerce vice president Wil Carpenter agreed with Saab’s take on the matter.
“This is a disincentive for people who are on a limited budget, based upon the demographic,” Carpenter said. “You have a lot of folks coming up from Greater Lowell and Greater Lawrence, Methuen and Haverhill. Let’s say they have $1,000 to spend. You add 11 percent to that and now they have to come up with another $100 or $110. That could be a budget-breaker for some families on a tight budget.”
Saab also pointed to a booming U.S. economy as another hindrance to beach rentals in the area.
“People who have extra money are doing something different,” Saab said. “They are going to Disney World or on a cruise.”
Saab said he has roughly 80 units to rent over a 10-week period this summer and still has roughly 100 weeks open.
“For the middle of June, that is too much,” he said. “These owners need that income to pay for their taxes, their water, their sewer and other expenses and are the ones that are suffering. So, we are discounting things. We are taking $200, $300 off of a week, just to get them filled up.”
The same appears to be true across the state line in New Hampshire where real estate broker Bob Preston is also having a tough time filling short-term rentals in Seabrook and Hampton Beach.
“Last year was soft and this year it is softer,” Preston said. “I’m talking about a broad area here, Hampton Beach and Seabrook Beach. If it wasn’t for my repeat tenants, I don’t know where we would be.”
Although Preston doesn’t have to deal with the new lodging tax in New Hampshire, he blames a combination of weather and shifting demographics for his short-term rental slowdown.
“We didn’t get a lot of snow this year but we haven’t had much sun either,” Preston said. “You also have the younger generation, what we will call the millennials, who don’t vacation the way our parents do. They want to go to the beach for three or four days and go home and do it again next month, somewhere else. Our folks were also dragging along three or four or five kids and these folks are not bringing any.”
Carpenter said Preston”s comments “hold water.”
“It is a brand new world,” Carpenter said. “It is a new generation and they don’t vacation like we and our parents did. That has an impact and a ripple effect as well.”
Staff writer Jim Sullivan covers Amesbury and Salisbury for The Daily News. He can be reached via email at email@example.com or by phone at 978-961-3145. Follow him on Twitter @ndnsully.