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Friday, January 18, 2013

John F. Craig House to Become Whole House Rental

This news is a few days old, but still a bummer for those who love Cape May Bed and Breakfasts: The John F. Craig House will no longer serve as a B and B.  Like many others (see, The Abbey), the JF Craig House will become a whole house rental.   The Mainstay is also for sale -- I would think it's unlikely that the Mainstay would succumb to the whole house rental trend, but who knows?

4 comments:

  1. Didn't Cape May change the tax rules a few years ago and thus make things unprofitable for B and B operators? At the time (before the economy went south) the prediction was that the old single family houses which became B and Bs would revert back to being the summer homes of the very rich for the second time around. I guess the very rich are doing something else for their summer amusement during a struggling economy.

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  2. George - I do not think this is a Cape May tax rule. It is a state tax that effectively doubles the tax on B and Bs vs house rentals, seven percent vs. fourteen percent. There are other benefits to going the whole house rental route, as well, that are not particularly fair. Stricter fire codes for b and b's, for example. I understand there has been lobbying in Trenton about the tax issue, to no avail.

    I am not an expert on this topic but this is my understanding.

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  3. George - if I recall correctly, Cape May has a seven percent across the board tax, applicable to both rentals and b and b's. The state, on the other hand, has another seven percent tax that only applies to b and b's. A local businessman explained this to me a while ago but I can't find that discussion now -- but this is what I recall. The problem may be amplified (iirc) because no one collects the tax from the house rentals but b/c of the state tax the b and b's must pay both. Therefore, the b and b's pay the 14 and the whole housers pay zero.

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  4. Yes, I'm fuzzy on the details as well. If I recall correctly all this places a B and B on an uneven tax footing compared with a motel which of course has many more rooms to rent. Perhaps with this tax landscape in place Cape May, in time, will become the next Wildwood with '50s era themed motels...sigh.

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