Charleston is a city full of history and charm and has some of the country’s most sought-after vacation rental properties. But before you start listing your home on Airbnb or VRBO, there’s one crucial thing to consider: Charleston has strict short-term rental regulations, and failing to follow them can lead to fines, revoked permits, and even legal trouble.
At Southern Charmed Hospitality Group, we know the ins and outs of Charleston’s short-term rental laws and want to help you navigate them correctly. Whether you’re a homeowner looking to rent out a portion of your home or an investor trying to break into the market, this blog explores what you need to know to stay compliant and successful.
Short-Term Rental Categories in Charleston
Charleston takes short-term leases seriously, creating a classification system to regulate them. Your ability to rent out your property depends on where it’s located and how it’s used.
Category 1: Old and Historic District (Downtown Charleston)
- You must live in the home and can only rent out part of it.
- Full-home vacation rentals are not allowed in this district.
- This rule is designed to preserve the character of Charleston’s historic neighborhoods and prevent an overload of rentals replacing long-term residents.
Category 2: Other Areas of the Charleston Peninsula
- Applies to homes outside the Old and Historic District but still downtown.
- It must be owner-occupied, and only one rental unit is allowed per property.
- Ideal for homeowners looking to rent out a spare bedroom or an attached unit while still living on the property.
Category 3: Suburban and Outer Charleston Areas
- Covers areas like West Ashley, James Island, Johns Island, and Daniel Island.
- It must still be owner-occupied, but there’s more flexibility in property size and layout.
- These areas are less restrictive, making them a popular choice for those looking to operate an STR legally.
Short-Term Rental Overlay Zone (Cannonborough-Elliotborough)
- This designated zone allows short-term rentals in select properties, primarily in the Cannonborough-Elliotborough neighborhood.
- Properties must still meet zoning regulations and obtain the proper permits.
- If you’re looking for a commercial short-term rental opportunity, this is one of the few places in Charleston where it’s possible.
What You Need to Operate a Short-Term Rental Legally
If your property falls into an eligible category, you still need to meet the city’s requirements to operate legally. Here’s what that involves:
1. Prove It’s Your Primary Residence
- If you’re applying for a short-term rental permit, the home must be your primary residence (meaning you live there most of the year).
- The city verifies this through the 4% Legal Residence tax exemption—if you don’t have this exemption, you likely won’t qualify for an STR permit.
2. Follow Occupancy Limits
- The city limits STRs to no more than four adult guests at a time, regardless of the property’s size.
- Large groups and party houses are not permitted under city regulations.
3. Provide Off-Street Parking
- Every short-term rental must have at least one designated off-street parking space for guests.
- This rule helps reduce congestion in residential areas and prevent parking issues for neighbors.
4. Get the Right Permits & Licenses
- You’ll need a Short-Term Rental Permit from the City of Charleston, which includes submitting:
- A site plan showing where guests will stay.
- Photos and floor plans of your property.
- Proof of the required tax exemption.
- You’ll also need a business license, which must be renewed yearly.
Taxes & Fees: What You Need to Know
If you’re running a short-term rental, you’re responsible for collecting and remitting taxes—and Charleston has quite a few.
Here’s what you’ll need to collect from guests and pay to the city and state:
- State Sales Tax: 5%
- State Accommodations Tax: 2%
- Local Option Sales Tax: 1%
- County Transportation Tax: 1%
- School District/Education Tax: 1%
- Charleston County Accommodations Tax: 2%
- City of Charleston Accommodations Tax: 2%
That’s 12% in taxes on every booking—so be sure to factor that into your pricing!
What Happens If You Don’t Follow the Rules?
Charleston actively enforces its short-term rental laws, and it doesn’t grandfather in existing illegal rentals—meaning that just because people got away with it before doesn’t mean they still can.
Violations can result in:
- Fines of up to $1,000 per day for noncompliant rentals.
- Revocation of permits, meaning you can’t operate at all.
- Legal action from the city if you continue to list your property illegally.
Staying compliant is key if you’re serious about running a short-term rental in Charleston.
Making Short-Term Rentals Work for You
Charleston’s short-term rental market can be highly profitable—but only if you follow the rules. The city’s strict regulations mean that not everyone can operate an STR, but those who can often see great returns.
If you’re considering turning your property into a short-term rental, make sure to:
- Confirm your eligibility based on your location and residence status.
- Get the proper permits and licenses before listing your home.
- Factor in taxes and fees when setting your rental rates.
- Stay updated on city regulations, as they can change over time.
Make Your Short-Term Rental in Charleston, SC, Successful with Help from Southern Charmed Hospitality
At Southern Charmed Hospitality Group, we specialize in managing and marketing short-term rental properties effectively. Whether you’re a property manager who needs help ensuring your property is compliant, maximizing occupancy, or simply taking the hassle out of hosting, we’re here to help.
Are you thinking about starting an STR in Charleston? Contact us today to learn how we can help you navigate the process and turn your property into a thriving, fully legal short-term rental in Charleston, South Carolina! Whether it’s a garage apartment or an entire home, we have the knowledge and experience to guide you through every step.