Short-Term Rental Compliance in South Carolina

State Regulation

Are you curious about the dynamic world of short-term rentals (STR) in the charming state of South Carolina? Get ready, as we're about to take you on an exciting exploration through the diverse world of vacation rentals in the Palmetto State!

This guide will demystify the world of short-term rentals, covering all aspects from legal considerations to essential tips that will boost your hosting skills in South Carolina. We will delve into the key inquiries every aspiring host must consider before jumping into the thriving STR market in the State.

Is STR legal in the State?

Short-term rentals in South Carolina are legal but subject to varying local regulations. A notable development is the introduction of a bill (H. 3253) in the South Carolina General Assembly. This bill, if passed, would prohibit local governments in the state from enacting or enforcing ordinances that ban the rental of residential dwellings for short-term periods (defined as fewer than 29 consecutive days). The bill reflects ongoing discussions and debates around the regulation of short-term rentals, including platforms like Airbnb and Vrbo, in South Carolina.

Is there a statewide definition of STR?

In South Carolina, there is a defined statewide understanding of what constitutes a short-term rental (STR). For tax purposes, a short-term rental is generally defined as a reservation for less than 90 continuous days. This encompasses various types of accommodations, including entire homes, apartments, condos, beach houses, cabins, and others rented out temporarily. It's important to note, though, that this definition primarily pertains to tax regulations and may vary in certain contexts or local jurisdictions.

Statewide Registration Requirement

In South Carolina, apart from tax obligations, short-term rental (STR) operators must adhere to a range of regulations that vary depending on the location, including zoning laws, occupancy and safety standards, licensing, and insurance requirements.

Zoning Laws: It's essential to check local zoning laws to ensure that short-term rentals are allowed in the area where your property is located. Many cities have restrictions on STRs in certain residential zones.
Business Registration and Licensing: Operators must register their rental as a business entity with the South Carolina Secretary of State. This is a mandatory step, and the cost for registration is typically around $110. Additionally, most cities and counties require a business license to operate any rental property, with fees varying by location.
STR Permit Requirements: Some cities in South Carolina mandate STR permits to legally operate a short-term rental. It's crucial to apply for this permit and comply with any specific regulations that may apply depending on the STR permit category.
Housing Safety and Occupancy Standards: Hosts need to comply with various rules concerning housing safety, including working smoke detectors, fire extinguishers, and emergency escape routes. Local fire marshals might require additional safety measures like fire alarm systems, emergency lighting, and posting of exit diagrams. There are also occupancy limits based on factors like the number of bedrooms, available parking spots, and total capacity for the rental property.
Insurance Requirements: Standard homeowners or landlord insurance policies often do not cover short-term rentals. Cities usually require hosts to have STR-specific liability insurance policies with coverage for personal injury of guests, property damage, theft, and loss of rental income.
Property Inspections: Some municipalities demand an inspection of the rental dwelling by the zoning, building, or fire department before approving an STR permit. These inspections check for compliance with building and fire codes, occupancy limits, parking requirements, and health and safety standards.

Each city and county may have additional or unique requirements for short-term rentals, so it's important to consult with the local planning or zoning office to understand the specific regulations in your area.

Statewide Tax Requirement

In South Carolina, the statewide tax requirements for short-term rentals are defined by a combination of state and local taxes. For tax purposes, short-term rentals are categorized as reservations lasting less than 90 continuous days. The taxes applicable to these rentals include state sales tax, state accommodations tax, and any relevant local taxes.

You're exempt from collecting state accommodations tax if your rental period is less than 15 days within a taxable year. Additionally, if you rent out six or fewer bedrooms in a residence you own and live in, and do not use a short-term rental marketplace for guest transactions, you are not liable for state accommodations taxes.

For those who need to collect state accommodations tax, registration with the South Carolina Department of Revenue for a retail license is required. However, if you provide accommodations for less than one week in any calendar quarter, you don't need to register for a retail license, but you still must collect and pay lodging tax.

Local governments in South Carolina may have additional rules for local taxes on short-term rentals, so it's important to check with local authorities for specific local tax obligations.

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