Overview: Are Short-Term Rentals Allowed in Wabasha, MN?

Yes, short-term rentals are allowed in Wabasha, Minnesota, but with specific regulations and requirements. The City of Wabasha has established a registration system for short-term rentals, requiring all property owners who rent dwelling units for less than 30 consecutive days to register with the city. However, investors should note that as of August 2025, the city was considering a 12-month moratorium on new STRs while studying their impact on residential neighborhoods.

Key Points for STR Investors:

• Existing STRs can continue operation with proper registration
• A $200 one-time registration fee is required per dwelling unit
• Lodging tax of 3% must be collected and remitted
• State sales tax of 6.875% applies
• The city may have implemented restrictions on new STRs during the moratorium period

How to Start a Short-Term Rental Business in Wabasha

Step 1: Verify Current Regulations

Contact City Hall at (651) 565-4568 to confirm:

• Whether the moratorium on new STRs is still in effect
• Current zoning requirements for your intended property location
• Any recent updates to registration or licensing requirements

Step 2: Property Assessment

• Confirm your property is in an appropriate zoning district for STRs
• Ensure the dwelling unit meets safety and habitability standards
• Consider seasonal demand patterns (peak season: late spring through summer)

Step 3: Registration Process

• Complete the Short-Term Rental Registration Form
• Pay the $200 registration fee
• Submit required documentation (see next section)
• Maintain registration compliance for ongoing operations

Step 4: Tax Setup

• Register for state sales tax collection (6.875%)
• Set up city lodging tax collection and remittance (3%)
• Understand county tax implications (1.25% vs. 1% for residential homestead)

Required Documents, Permits, Licenses, and Guidelines

City of Wabasha Requirements

Registration Documents:

• Completed Short-Term Rental Registration Form
• Property ownership verification
• Contact information for property owner and local responsible party
• Property address and description
• $200 registration fee per dwelling unit

Ongoing Compliance:

• Monthly or quarterly lodging tax remittance (3% of lodging charges)
• Property must remain registered with current owner
• Registration is non-transferable between property owners

Minnesota State Requirements

• State sales tax registration and remittance (6.875%)
• Compliance with Minnesota Statutes 469.190 regarding lodging tax administration

County Requirements

• Wabasha County property tax considerations (1.25% rate for STR properties vs. 1% for residential homestead)

Specific Regulations for Short-Term Rentals

City of Wabasha Regulations

Definition: A Short-Term Rental is defined as a dwelling unit rented for less than 30 consecutive days for tourist or transient use.

Registration Requirements:

• Mandatory for all STR properties
• One-time fee of $200 per dwelling unit
• Non-transferable registration (new owners must re-register)
• Registration must be completed before operation begins

Lodging Tax:

• 3% of lodging charges must be collected
• Remitted to City of Wabasha
• Monthly or quarterly payment options available
• 95% goes to Wabasha/Kellogg Convention and Visitors Bureau
• 5% retained by city for administration

Zoning Considerations:

• Zoning laws may restrict STRs in certain residential areas
• Investors should verify zoning compliance before purchase

Wabasha County Regulations

• STR properties are taxed at 1.25% rate
• Residential homestead properties are taxed at 1% rate
• This higher tax rate should be factored into investment calculations

State of Minnesota Regulations

• State sales tax of 6.875% applies to short-term rentals
• Hosts are responsible for collecting and remitting this tax
• Failure to comply can result in fines and penalties

Potential Moratorium

As of August 2025, the city was considering a 12-month moratorium on new STRs. Investors should verify the current status as this could affect new property acquisitions.

Contact Information

City of Wabasha - Primary Contact

City Hall Administration

• Phone: (651) 565-4568
• Fax: (651) 565-4569
• Business Hours: Monday-Thursday 9 AM to 4 PM, Friday 9 AM to 11 AM
• Physical Address: 900 Hiawatha Drive East, Wabasha, MN 55981
• Mailing Address: PO Box 268, Wabasha, MN 55981

For Public Comments on Proposed Moratorium:

• Email: clerk@wabasha.org

Planning & Zoning Department

• Phone: (651) 565-4568
• Purpose: Zoning compliance questions and property use verification

Wabasha County

• Website: www.co.wabasha.mn.us/
• Purpose: Property tax information and county-level regulations

Source Pages

1. Short-Term Rental Registration Page: www.wabasha.org/shorttermrentalregistration/
2. Moratorium Information: www.wabasha.org/moratorium/
3. Registration Form: www.wabasha.org/wp-content/uploads/Fillable-Form-Short-Term-Rental-5.pdf
4. Wabasha City Code Chapter 32 (Lodging Tax): codelibrary.amlegal.com/codes/wabashamn/latest/wabasha_mn/0-0-0-19170
5. Minnesota Statutes 469.190: www.revisor.mn.gov/statutes/cite/469.190
6. Interim Moratorium Draft Ordinance: www.wabasha.org/wp-content/uploads/Interim-Ordinance-Short-Term-Rental-Housing-071125.docx

Investment Considerations and Recommendations

Market Dynamics

• Peak season runs late spring through summer
• Fall offers moderate demand due to foliage and festivals
• Winter months present challenges due to harsh Minnesota climate
• Consider off-season strategies like long-term rentals or winter sports packages

Due Diligence Checklist

• [ ] Verify current moratorium status
• [ ] Confirm zoning compliance for specific property
• [ ] Factor 1.25% county tax rate into financial projections
• [ ] Assess seasonal demand patterns for your specific property type
• [ ] Review insurance requirements for STR operations
• [ ] Understand competition from existing registered STRs

Financial Planning

• Registration fee: $200 per unit (one-time)
• Ongoing lodging tax: 3% of gross revenues
• State sales tax: 6.875% of gross revenues
• County property tax: 1.25% (higher than residential homestead rate)
• Potential impact of moratorium on new property acquisitions

This guide provides the essential regulatory framework for STR investment in Wabasha, Minnesota. Given the evolving regulatory environment, investors should maintain regular contact with city authorities and stay informed about any changes to ordinances or tax requirements.