Short‑Term Rental Rules On Hilton Head Island For Buyers

Thinking about buying a Hilton Head home to rent for short stays? The profit is in the planning. One permit, two approvals, and a few new safety upgrades can shift your numbers fast. If you line up the rules early, you protect cash flow and avoid costly surprises after closing.

This guide walks you through Hilton Head Island’s short‑term rental rules, the 2025 ordinance changes that affect 2026 operations, what lenders and HOAs will ask for, and the taxes that impact your net. You also get a step‑by‑step buyer checklist you can use before you make an offer. Let’s dive in.

Know the rule: permit plus business license

Hilton Head regulates private homes, villas and condos rented for less than 30 days. Timeshares and hotels are excluded. If you plan to rent short term, you need the Town’s short‑term rental permit before you advertise the property. You also need a Town business license for rental activity. These are separate items, and you need both to operate.

• You can review the Town’s permit program and current instructions on the Hilton Head Island STR permit page. Town STR permit program
• The business license program governs your local tax account and filings for rental income. Town business license for short‑term rentals

Timing, fees and renewal window

• Permit year: May 1 through April 30.
• The online renewal portal typically opens March 1 for the coming year.
• Baseline permit fee: the Town currently lists $250 per property for the existing program year. The Town may change the fee structure in 2026, so confirm the fee that applies to your closing month.

Application checklist: what you need to file

Site plan and parking specifics

Single‑family STRs must include a simple site plan. The plan shows the house, property lines, paved parking spaces and a fenced or screened trash storage area. Each parking space must be at least 9 feet by 18 feet on an improved surface. The Town limits exterior or visible parking to a maximum of six spaces per site. Garage spaces are not counted in that exterior limit. The Town provides a basic site‑plan tool if you do not have a survey. Town site‑plan guidance and tool

Owner affirmations and HOA letter

The application asks you to affirm compliance with noise, trash, parking, response times and life‑safety standards. You must include a current business license and, when the property is in a community with an association, a letter from the HOA confirming short‑term rentals are allowed. Under 2025 changes, the STR permit must be issued to a person rather than only to an entity. Permit requirements and checklist

Non‑transferability and advertising rules

Permits are non‑transferable and non‑refundable. A sale typically requires the buyer to apply for a new permit. The Town also requires your STR permit number to appear on every public advertisement. Check that the current listing shows a permit number, and that the number of bedrooms and permitted vehicles on file match the ad.

Operational rules that affect your bottom line

Parking, trash and good‑neighbor expectations

• Parking must be off‑street and on improved surfaces. No parking on grass or pine straw.
• Exterior parking is capped at six spaces per site. Deliver written vehicle limits to guests.
• You must show the location of screened trash storage on the site plan and post trash rules in the rental. Trash and parking are common complaint triggers.

On‑call agent and complaint response

You or your designated agent must be reachable 24/7 and respond to complaints quickly. The Town requires a responsible action or on‑site response within one hour. The Town runs a 24/7 STR Nuisance Hotline at 843‑341‑6864 and uses listing monitoring services to track ads. Plan to staff a reliable response contact or hire a manager who can meet the one‑hour standard. Owner responsibilities and hotline info

Inspections and enforcement

Town staff can conduct compliance inspections with 48‑hour notice. The updated ordinance created administrative citations and an escalating fine structure for repeat violations. Properties with multiple citations risk permit suspension or revocation, which directly hits revenue. Town ordinance highlights and enforcement updates

2025 ordinance changes buyers must budget for

Town Council approved significant amendments in October 2025, with most items effective May 1, 2026. Some life‑safety deadlines extend for existing permit holders to May 1, 2027. Key themes include added fire‑alarm expectations for very large homes, propane and gas safety requirements, tighter parking standards, ad disclosures and stronger enforcement. Council action and dates

Fire and life‑safety for larger homes

If the home is 3,600 square feet or larger and does not have a fire suppression system, you must install a monitored fire‑alarm system that meets the intent of national signaling standards. Existing permit holders received time until May 1, 2027 for alarm installation, but new buyers should plan for equipment, installation and monitoring costs in 2026 if they purchase a large home. Ordinance update on safety

Propane and smoke‑detector standards

If your property uses propane, you must have a combustible gas detector. External propane grills need an automatic shutoff timer set to 60 minutes. Smoke detectors must be in every bedroom, on each floor, and along egress paths. Bedrooms must meet building and safety definitions used by the Town.

Fines and penalties

Hilton Head uses an administrative fine schedule that escalates for repeat violations. As published in 2025, first offenses are $250, second offenses are $500 and subsequent offenses are $1,000, with a reset after 12 months with no citations. Unpaid fines can block permit renewal, and multiple citations can lead to suspension or revocation. Fine schedule summary

Occupancy and zoning: what is not capped yet

As of late 2025 and into 2026, the Town did not adopt a blanket overnight occupancy cap. Council removed occupancy limits during its October 2025 action. Location and use standards for STRs are being studied in the Land Management Ordinance rewrite, and future overlay districts or neighborhood‑level rules could add restrictions. Track the LMO process if you plan to buy with rental income in mind. Council discussion on occupancy and LMO work

HOA, lending and insurance: gatekeepers you cannot skip

HOA approval sits ahead of the Town

Many resort and condo communities on Hilton Head restrict or prohibit short‑term leasing. The Town’s checklist requires an HOA approval letter when applicable. Private covenants control regardless of Town permits, so validate the HOA package and get written confirmation that STRs are allowed before you underwrite any rental income. Permit requirements and HOA letter

What lenders want to see

Lenders often require proof that STR use is legal under Town rules and HOA covenants. Expect requests for the Town STR permit, the HOA approval letter, and historical booking statements if you plan to use STR income for underwriting. Because permits are non‑transferable, some lenders will not count STR income until your new permit is issued.

Insurance for vacation rentals

Platform protections are not a substitute for dedicated insurance. Many hosts obtain a specialized STR policy or a landlord policy with endorsements for guest liability, intentional damage and loss of rental income. Pool and hot‑tub exposures may need add‑ons. Budget for higher premiums if you plan frequent short stays.

Taxes and fees: model your NOI carefully

Short‑term rental income is subject to state and local taxes, collected either by you or by your marketplace platform depending on the stay type and platform policies. Confirm who collects and who remits for each channel you use.

• State sales tax: South Carolina’s statewide sales and use tax base rate is 6 percent. SCDOR sales and use tax
• State accommodations tax: South Carolina also imposes a state accommodations tax on transient lodging.
• Local taxes and fees: Hilton Head historically adds a 1 percent local accommodations tax and a 2 percent beach preservation fee. Confirm current local rates with Town Revenue Services because allocations can change. Town overview of STR business and taxes

In practice, the combined tax burden on gross rental receipts is often about 10 to 11 percent, depending on platform collection and local surcharges. Always verify current rates with SCDOR and Town Revenue Services before you make an offer or finalize projections.

Permit fees today and what could change in 2026

The current baseline STR permit fee is listed at $250 per property for the permit year. Town leaders have discussed fee changes for 2026, including a per‑bedroom structure that could increase costs for larger homes and a late renewal penalty if you miss the May 15 date. Build a cushion into your first‑year expense model and confirm the live rate when you apply. Current permit program details

Buyer due‑diligence: an 8‑step plan

Use this sequence once you identify a property you might buy for short‑term rental:

1. Confirm the property has an active Town STR permit and a business license. Ask for the permit number and match it in the Town dashboard. Town STR program hub
2. Verify permit transfer rules. Assume you will need to apply for a new permit at closing and plan for timing and cost.
3. Order the HOA disclosure package. Get a written HOA letter that confirms STR permission and any HOA parking, insurance or registration rules. The Town expects this letter when applicable. Permit requirements
4. Walk the site for compliance: count paved parking spaces and measure 9 by 18 feet, confirm trash enclosure screening, verify required postings, check smoke detectors, assess propane devices and detectors, and confirm whether the home is 3,600 square feet or larger, which triggers monitored alarm requirements for non‑sprinklered homes. Site‑plan and standards
5. Request the seller’s compliance history: any Town citations, complaints, unpaid fines or pending actions. Repeat issues raise renewal risk. Fine schedule context
6. Clarify taxes and collection: confirm what your platform collects and what you must remit to the Town and SCDOR. Build a baseline withholding estimate. Town business and tax overview
7. Talk to your lender and insurer: ask what proof they require to count STR income, and get quotes for specialized STR coverage.
8. Call Town STR staff for property‑specific questions, fee checks and deadlines. STR program email: [email protected]. STR program phone: 843‑341‑4740. Nuisance hotline: 843‑341‑6864. Town program contacts

Smart strategies for Hilton Head investors

• Build parking and vehicle limits into your listing copy and house rules. Provide a simple parking map to guests.
• Show your STR permit number on every ad and make sure bed count and vehicle limits match your permit file.
• If you are evaluating a large home, budget for a monitored alarm system plus monthly monitoring and testing. Get vendor quotes during due diligence.
• Set a 24/7 response plan with a local manager who can be on site within an hour. The fastest way to avoid fines is proactive communication.
• Align your calendar to the May 1 permit year. Plan upgrades and inspections before peak season so renewal is smooth.
• Keep a clean compliance record. Fines escalate, and multiple citations risk suspension, which can erase peak‑season revenue.

Buying a Hilton Head STR can be a strong play when you control permitting, safety, taxes and operations up front. Use the checklist here, verify current permit fees, tax rates and compliance deadlines with Hilton Head Island Revenue Services and SCDOR before making an offer, and build a small reserve for 2026 fee changes.

Ready to move from research to execution? Partner with a team that can align your purchase plan, permit timing and capital stack. If you want senior‑level guidance and integrated financing options for a time‑sensitive deal, talk with The Arch Corporation. We combine brokerage with in‑house lending to help you close with speed and certainty.

FAQs

Do I need a permit to advertise a Hilton Head short‑term rental?

• Yes. The Town requires a short‑term rental permit before you advertise any stay under 30 days, in addition to a Town business license for rental activity.

Are Hilton Head STR permits transferable when I buy a property?

• No. Permits are non‑transferable and non‑refundable. You should plan to apply for your own permit after closing and time your go‑live accordingly.

What are Hilton Head’s parking rules for vacation rentals?

• All guest parking must be off‑street on improved surfaces, each space must be at least 9 by 18 feet, and exterior or visible parking is limited to six spaces per site.

Do Hilton Head STRs have an occupancy limit in 2026?

• The Town removed a blanket occupancy cap during the October 2025 process. Future zoning or overlay rules could add limits later, so watch the LMO rewrite.

What safety upgrades might I need for a large rental home?

• Homes 3,600 square feet or larger without fire suppression must install a monitored alarm system. All STRs must meet smoke‑detector and propane safety rules.

What taxes apply to short stays on Hilton Head?

• Expect state sales tax, state accommodations tax, and local taxes such as the local accommodations tax and beach preservation fee. Combined rates often total about 10 to 11 percent, but confirm current rates with the Town and SCDOR.

How fast must my on‑call agent respond to a complaint?

• The ordinance requires a responsible action or on‑site response within one hour. The Town’s 24/7 hotline routes complaints to the contact on your permit.