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Hot Topics in Asheville – Hotel Tax and Housing

Taxes and housing are on the tip of everyone’s tongue, whether they are visiting or living here. Asheville is seeing significant growth that is impacting both the occupancy tax rate and the housing situation. Let’s investigate both just a little further so that we can understand the financial makeup of Asheville.


Occupancy Tax is Still Affordable

Occupancy tax belongs to Buncombe County, the home of Asheville. This tax covers all hotels, motels, inns, and short term rentals (cabins, AirBnB, etc). The last increase took place in 2015 when it increased to 6% from 4%. Currently that is exactly the tax rate one pays when they stay here. It may seem a bit higher once you factor in our 7% sales tax, but for the sake of discussion we are solely focusing in on the occupancy tax. As of now, there are no plans for the county government to raise taxes. We are certainly hearing the rumors, but to date there is no reliable source that would back those rumors up. However, we must factor in the incredible boom Asheville is seeing right now in tourism. It wouldn’t be of any surprise if the county government took measures to increase in order to make the most out of the financial benefit of a tourism boom. Despite the consideration, the occupancy tax is relatively low when compared to other counties in the state of North Carolina and the majority of the country.

Many people often wonder if Asheville will impose a city wide occupancy tax for the hotels and AirBnB’s situated in the city limits. The short answer is “No”.  The longer answer is that they are simply not allowed to by the state of North Carolina. It isn’t technically a law but in order for any local government to impose a special tax within city limits, they must make a request to the state and receive approval. So far, no one on City Council has discussed that as their focus has been strongly on housing issues.


Bond Referendum Focuses on Affordable Housing

The bond referendum was approved in August 2016 and was most recently amended for the City Council’s approval. The bond itself is worth $74 million and means that there is a 4.15 cent increase on property taxes in order to pay off the debt. While the bond covers several key issues in the area, affordable housing is the one that everyone is watching closely. It is proposed that there will be 2,800 new units of affordable housing made available by June, 2021. It also includes the expansion of permanent place-based affordable housing, so that many can have a home that they can reside in for much longer than a rental. Additionally, there is a focus on location and energy efficiency considered as key factors for the affordable housing. Lastly, the bond has ambitious plans to eliminate the homeless crisis that Asheville is currently facing. Location is probably one of Asheville’s largest challenges when it comes to affordable housing. The city has three properties that are referenced in the bond as key places to transform into usable and affordable space. Two of them are in the heart of downtown and all three are on the bus lines, making it attractive for folks who rely on mass transit for work and errands. Those three properties contribute a total of approximately 14 acres to develop, which is why it will take about 4 years to complete those developments.


What does this mean for the visitor or potential new resident? For the visitor, there is still a relatively low tax in place that won’t break your travel budget and allows you to spend more on meals and entertainment. For the potential new resident, you will see more growth in the city and new opportunities arise. Growth in the city will be a huge benefit as we support local businesses and add to our eclectic lifestyle!


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