Short-Term Rentals in Kirkland

The City Council adopted an ordinance regulating short-term rentals in Kirkland in October 2017. The ordinance, O-4607, defines short-term rentals as a rental lasting for less than thirty days, as opposed to long-term rentals, which are defined as those lasting 30 days or more.

The ordinance primarily applies to single family residences. Multifamily residences are generally governed by the rules of the individual complex.

Residents should be aware, however, that the City of Kirkland requires business licenses for any commercial transaction, including all short-term and long-term rentals (including multifamily residences).

Current requirements to obtain a short-term rental business license for homes in Kirkland:

  1. The property owner, or an authorized agent, must occupy the property as a primary residence at least 245 days per year to enter into short-term rentals there.
  2. A property manager living within 15 miles of the residence must be identified for those days when neither the owner nor an authorized agent are occupying the property.
  3. The property owner must have a business license from the State of Washington.
  4. The property owner (or authorized agent) also must complete and submit a business license application for the City of Kirkland, and pay licensing fees.
  5. As part of the application, a declaration must be filled out and signed. If the applicant is not the owner, it must still be signed by the owner, as owners retain specified responsibilities in all events.
  6. Lodging taxes for short-term rentals must be paid to the State of Washington, and those payments are the responsibility of the property owner.

Frequently Asked Questions:

 

Occupying the Residence

If I own a rental property in Kirkland that is not my continuous primary residence, and that is not the continuous primary residence of an authorized agent, can I still do short-term rentals?

No. You can still do long-term rentals at the property, however.

If I own a single family home and live there continuously as my primary residence, how many days per year can I rent out part of my home?

Short term rentals are not limited by the City as long as you continuously live at the residence, and provided you have no more than two short-term rentals at your home at any one time.

If I, or my authorized agent, live at my single family home at least 245 days per year, but not continuously, am I limited to the total number of days per year I can do short-term rentals?

Yes, if you (or an authorized agent) live at the property for at least 245 days, but not continuously, you may undertake short-term rentals for up to a maximum of 120 days each year. Whenever you and/or your authorized agent are absent from the property, however, you need to have identified a property manager (located within 15 miles of your home) to both the City and your short-terms renters in case issues come up in your absence.

I own a single family residence in Kirkland with a registered detached accessory dwelling unit (ADU), also referred to as a mother-in-law unit. Can I rent out the ADU?

Yes, after first obtaining State of Washington and City of Kirkland business licenses. Beyond that, whether you can enter into short-term rentals without restriction or for no more than a total of 120 days per year depends on whether the owner or a registered agent of the owner lives at the property as his or her primary residence either continuously or for at least 245 days per year.

I live in a condo and travel frequently. Can I rent my condo out when I am travelling?

First, you must check to see if your condo homeowner's association allows short-term rentals. Then, if those rules do allow for short-term rentals you must obtain State of Washington and City of Kirkland business licenses. Then you must comply with the rules of your condo homeowner’s association. The City's short-term rental requirements generally do not apply in multifamily settings like condominiums.

We travel 6 months out of the year and allow various friends to use our home while we are away. Does this Ordinance prohibit me from doing that?

As long as no fees or other things of value are “charged” to the occupants, no business license is required.

Authorized Agents

Who can be an authorized agent and how do they prove they are authorized?

This can be anyone you like, but they will need to be identified on the City’s license application form. To meet the City’s occupancy requirements, and if the property is not owner occupied, the agent will need to live at the rental property as his or her primary residence either continuously or for at least 245 days per year (depending on how may days per year you want to be able to undertake short-term rentals at your property).

Business Licenses

How do I get the required business licenses for short-term and long-term rentals?

The first step is to register with the State of Washington Department of Revenue. Helpful information on how to do so can be found on the Department of Revenue site.

You will then need to apply for a City of Kirkland business license. For short-term rentals, you will also need to complete a short-term rental form. Information on how to apply for a City business license can be found on the Kirkland Business License page.

If I am only operating short-term rentals occasionally do I still need a business license?

Yes. Anyone renting a short-term rental property is required to obtain both a State of Washington and a City of Kirkland business license.

What happens if I fail to get a business license?

A City of Kirkland business license is required prior to undertaking long-term or short-term rentals in Kirkland. Failure to obtain a business license or to keep your license current may result in penalty fees and possibly other sanctions. Operating a business in Kirkland without an active business license can also constitute a misdemeanor crime.

I've been renting a room in my home for years and had no idea I needed a business license. Will I have to pay extra for years when I didn't have the license?

The City does not intend to collect license fees that may have accrued prior to the effective date of the Ordinance in October 2017.

I already have a business license for work I do from home. Do I have to apply and pay for another business license if I want to rent out a room in my home?

Generally yes. The City's Municipal Code says that if more than one business is conducted upon or from a single premises, a separate registration and license shall be required for each separate business conducted, operated, engaged in or practiced. If your businesses are separate and distinct, you will need separate licenses for each business.

Taxes

How do I pay my State Lodging Tax?

This page from the State Department of Records website summarizes how a new business or other economic enterprise can register, at what rate and when the taxes should be charged to customers, and when owners should file to pay the taxes to the state.

Here is a link to the City of Kirkland’s lodging excise code chapter (and please note it is the responsibility of the owner of a short-term rental property to ensure payment of the lodging excise tax):

Airbnb apparently takes a different strategy, and collects and sends lodging taxes on behalf of the property owner. Other short-term rental sites may not provide this service, however, which would require the owners to submit the payments themselves. In any event, owners are ultimately responsible for the payment of these taxes.

What taxes do I have to pay to the City of Kirkland?

In addition to the lodging excise tax applicable to short-term rentals, the City’s business license fee (for both long-term and short-term rentals) consists of two parts: a base fee of $100 and a revenue generating regulatory license (RGRL) of $105 per employee (always a minimum of one employee). For many short-term rentals, a $205 annual fee would be charged.

If the annual gross receipts of your business are less than $12,000.00, you are eligible to pay the registration fee of $50.00, and no RGRL fee is required.

A new business is eligible for the New Business Incentive, which exempts the business from the RGRL fee for the first year of operation.

The City of Kirkland charges no Business and Occupation tax. Short-term rentals are required to pay lodging taxes to the State of Washington.

Enforcement and Complaints

How will this Ordinance be enforced?

The Ordinance will be enforced primarily based on complaints submitted to the City. To initiate an investigation, the Complaint Investigation Request form at Our Kirkland Portal should be filled out completely. The City may become aware of violations in the absence of a complaint, however.

The City does plan to analyze compliance levels during the third quarter of 2018 and will reach out to owners of short-term rentals without business licenses as may be appropriate.

Depending on the facts and circumstances, business licenses can be revoked or suspended, nuisance or code enforcement actions brought, or misdemeanor charges filed.

I live in a residential neighborhood and a nearby home rents out rooms all the time. When the renters are noisy or are causing parking problems for homeowners on the street, where do I complain?

Noise or other complaints that need an immediate response should be reported to the police by calling 9-1-1.

Complaints that do not need an immediate response should be submitted online on the Complaint Investigation Request form.

Am I responsible for the acts of my short-term renters of my single family home?

In addition to requiring your short-term renters to exercise their best efforts to avoid conflicts with neighbors, you are required to exercise your best efforts to make sure those conflicts are avoided as a condition of maintaining your business license. As the owner, you are also responsible for meeting all off-street parking and other applicable zoning and building code requirements.

Other Questions

Do I need to provide off-street parking for my renter?

The parking requirement for short-term rentals that are single family residences are the same as the requirements for a bed and breakfast house as regulated in KZC 115.65.4.j(5).

To summarize this requirement, one parking stall for each short term rental is required. If permanent residents live in the dwelling unit, two additional parking stalls are required. The parking stalls may be provided in a garage or driveway and/or as legal on-street parking immediately adjacent to the dwelling unit.

I contract with a large corporation to provide rooms to house contractors or new employees looking for housing and coming from out of state. Sometimes they stay for a few months at a time and sometimes it is only a week or two. What are my obligations under the Ordinance?

No obligations unless they are charged rent. If they do pay rent, you will need a business license. The City’s licensing requirements apply to economic activity and other sources of gain to owners.