Overview: Are Short-Term Rentals Allowed? Short-term rentals (STRs) are allowed in New Castle, Virginia. There is no separate New Castle city-level STR licensing framework; operations are governed by Virginia state rules and Craig County, the local authority. Virginia state law broadly permits STRs, defining them as rentals of fewer than 30 consecutive days. In Craig County, hosts must register to collect and remit the 5% Transient Occupancy Tax (TOT) on net receipts, and they must make monthly filings with the Commissioner of the Revenue. Because intermediaries (Airbnb/VRBO) increasingly remit TOT directly to localities, Craig County has been working to secure detailed information returns from those platforms to validate tax collections and prevent underreporting. Investors should assume tax compliance and structured reporting are mandatory in this market.

How to Start a Short-Term Rental Business in New Castle (Craig County) To launch an STR in New Castle/Craig County, follow these steps:

• Confirm zoning and property use:
  • Verify the property’s zoning allows short-term lodging (standard residential use is commonly permitted, but confirm any overlays or HOA rules).
• Obtain a local business license:
  • Register with Craig County to operate a lodging business; the business license is required for tax remittance and must be renewed annually.
• Register for Transient Occupancy Tax:
  • Register with the Craig County Commissioner of the Revenue to collect and remit the 5% TOT on net receipts.
• Implement a tax workflow:
  • Set up monthly TOT remittance by the property owner if you collect TOT directly; when using intermediaries, ensure the platform remits TOT and that Craig County receives the required informational returns.
• Safety and habitability:
  • Comply with state and local life-safety standards (smoke and carbon monoxide detectors, fire extinguishers). While specific inspection rules are not codified for New Castle in the provided content, prepare for potential fire or zoning inspections when obtaining business licenses or operating in certain districts.
• Insurance:
  • Obtain general liability coverage appropriate for hosting; insurance specifics are not mandated in the provided source, but are standard prudent practice.
• Ongoing filings and renewals:
  • Submit monthly TOT filings (5% of net receipts) to the Commissioner of the Revenue, keep records, and renew the business license annually.

Required Documents, Permits, Licenses, and Guidelines Based on the source content and typical Virginia requirements, expect to provide:

• Business license documentation (Craig County)
• Transient Occupancy Tax registration with the Commissioner of the Revenue
• Property information and owner contact details
• Proof of payment of applicable fees
• Life-safety compliance (smoke/CO detectors, fire extinguisher)
• Records sufficient to calculate “net receipts” for TOT
• Floor plan and parking plan (common in Virginia jurisdictions, though not explicitly codified for New Castle/Craig County in the provided source)

Note on state-level documentation: Outside Craig County-specific rules, Virginia localities often require identification (driver’s license), federal EIN, proof of ownership or residency, and insurance; consider gathering these documents proactively.

Specific Regulations for Short-Term Rentals in New Castle, County, and State

• State (Virginia):
  • Short-term rental is defined as lodging for fewer than 30 consecutive days.
  • No state-level licensing regime; most rules are set by localities.
• County (Craig County):
  • Transient Occupancy Tax applies: 5% of net receipts.
  • Monthly reporting: Property owners must file monthly with the Commissioner of the Revenue.
  • Intermediaries (Airbnb/VRBO): Virginia law requires these platforms to provide tax details to localities. Craig County has considered/tabled an informational return ordinance aimed at improving data fidelity from intermediaries (e.g., confirming property identification, correcting zip code errors).
  • Operational scope: The article notes 28 registered accounts (with eight hosts operating multiple properties), and that 20 of those accounts use an intermediary, underscoring the county’s focus on compliance across both owner-managed and platform-facilitated rentals.
• City (New Castle, Virginia):
  • No separate city-level ordinance identified in the provided content. New Castle follows state rules and Craig County’s TOT and reporting requirements.

Contact Information for Local Authority in Charge of STRs Craig County Commissioner of the Revenue (administers Transient Occupancy Tax for STRs):

• Website (Commissioner of the Revenue, Transient Occupancy information): www.craigcounty.virginia.gov/government/commissioner-of-the-revenue/short-term-rentals/
• Phone (Commissioner of the Revenue): Not explicitly provided in the source; the county’s general offices can be reached through the county website.
• Email: Not provided in the source. Contact via the Commissioner’s office or county website for the current point of contact.
• Note: Ensure you reach out to the Commissioner’s office for the latest forms, filing schedules, and any additional local requirements that may evolve from Craig County’s ongoing ordinance process.

Links to Source Pages

• County focus and tax framework: newcastlerecord.com/2024/10/08/short-term-rentals-present-ongoing-revenue-challenge-for-county/
• State-level overview of Virginia STR laws and practice: www.gosummer.com/post/virginia-short-term-rental-laws
• Market context for New Castle STRs: www.airroi.com/report/world/united-states/virginia/new-castle
• Craig County TOT guidance: www.craigcounty.virginia.gov/government/commissioner-of-the-revenue/short-term-rentals/
• Virginia Code on Transient Occupancy Taxes (context): law.lis.virginia.gov/vacode/title15.2/chapter9/section15.2-983/

Notes for Investors

• Compliance posture: Treat 5% TOT, monthly filings, and data validation (including intermediary reporting) as core to your operational compliance plan in Craig County.
• Documentation: Maintain thorough records of gross and net receipts, remittances, and correspondence with platforms to withstand audits and ensure accurate tax attribution.
• Market outlook: Craig County is working to streamline TOT administration in a platform-heavy environment. Given ongoing legislative refinements at the local level, verify the most current filing requirements with the Commissioner’s office before listing.
• Risk management: Even without city-level codes in the provided content, monitor any future ordinances that may address parking, occupancy, or inspections. Verify zoning and HOA restrictions and consider maintaining higher insurance coverage than the minimum.