The Sun Belt region of the USA is stretched from Florida to California and Palm Springs is a resort city on a desert in California. In this city, you can enjoy activities like Golf, swimming, hiking, bike-riding and horseback riding. Hence, it has turned into a popular destination to enjoy a luxurious vacation.
Canadian Snowbirds try to escape snowy winter of their nation and being a neighbor, the USA has become their first choice to enjoy a seasonal vacation. They grab this opportunity and try to expand their businesses in this country with the help of efficient tax and licence consultants. For many years, Palm Springs is famous for its unique scenic beauties and leisure activities. Thus, Canadian Snowbirds invest here behind rental properties.
Before offering short-term, long-term and seasonal rentals, as a Canadian, you need to be cautious about various non-residents tax issues.
Below, we have discussed some facts and rules and regulations that are to be considered while running rental businesses in Palm Springs.
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Expected income & other statistical facts!
If we look at the real estate market of 2019, the median property prices have hovered around $457,000. In each quarter, the average income from a rental property is around $1700. The average cap rate is about 0.6%. In 2019, at each quarter, the average occupancy rate was about 61.8%.
Before owning a rental property, you must know some other economic factors as well. For example, at Palm Springs, the index of the cost of living is 112 and it is 12% lower than that of California and 22% higher than that of the entire USA. Similarly, the crime rate of Palm Springs is 2% and it is 2% lower than that of other US cities.
Laws & Regulations
To use your property in offering vacation rentals, you need to collect City-issued Registration Certificate and Transient Occupancy Tax Permit after paying various fees.
In cases of vacation rentals, if the owner is not present in the property, then rental-guests can stay there for a maximum of 28 consecutive days.
Before offering rental, the owner or the official representative has to sign a contract with a rental-guest of above 25 years of age.
Tax Rules
To the owner of a rental property, the tax rules are very simple in the Palm Springs. A tax with the rate of 11.5% will be imposed on the vacation rental fee per year and with the same rate, another tax will be imposed on the fee of land use permit. If you offer Home-share Services, then the fee will be a little lower than that of a vacation rental.
At the Accounting & Tax, we help our Canadian clients by informing them about US non-residents tax filing requirements.We provide information about the rules and regulations of passports and visas. Also, we inform them about tax-related matters.