Short-term rentals in Hilton Head Island, explained properly.

Under § 10-2-40 of the Town Code, a short-term rental permit must be obtained before a property is advertised, offered, used or operated as a short-term rental (any rental under 30 consecutive days). Each rental property needs its own permit, and where several units sit on one parcel, each unit needs a permit. A permit is not valid unless the Town has issued a Certificate of Occupancy for the property. The Town's FAQ says the permit is separate from, and in addition to, the business license.

Town Code § 10-1-10 treats anyone who owns and rents one or more residential units in the Town as doing business, for both short-term and long-term rentals, so a Town business license is required and the annual business license tax must be paid. Section 10-2-50 requires short-term rental owners to keep both a valid STR permit and a Town business license, and to stay current on fees, taxes and fines. Business licenses run May 1 to April 30, are due for renewal by April 30, and the tax is based on gross revenue.

STR permits run for the twelve months from May 1 to April 30 and are valid only for the period they are issued for, whatever the date of issue. Permits are non-transferable and non-refundable, and valid only for the owner, agent and property named on the permit, so a new owner needs a new permit. Owners must tell the Town about changes to the contact information on the application.

Permit fees are set by Town Council in the budget ordinance. Ordinance 2026-04 (adopted March 31, 2026) changed the STR permit fee from a flat $250 to $150 per bedroom, with a $250 late fee for renewals after May 15 in 2026 and, in later years, from May 1. A bedroom is a room designed and used for sleeping rather than as living, dining or common space, and must meet building and safety codes.

The application is made on the Town's form with the fee and must include: for a single-family house (or any home without shared trash and parking), a site plan showing the screened trash area and the parking spaces; a copy of at least one advertisement for the rental; where applicable, a letter from the homeowners' or property owners' association approving the use as a short-term rental; an affidavit signed by the owner affirming compliance; and the parking information. An application filed by an agent must be signed by the owner. If the property is owned by a trust, company or other entity, the application must name an individual with legal authority to act for the owner. False information is grounds for suspension or revocation.

During every stay the owner or a designated agent must be available by telephone at all times and able to be physically present, or take other responsive action, within one hour of the Town's notice of a complaint. The Town runs a 24/7 STR Rapid Response Hotline (843-341-6864) for noise, parking and trash complaints.

While a permit is active, the property must keep working smoke and carbon monoxide detectors (and combustible gas detectors if propane is used inside), at least one charged fire extinguisher, unobstructed escape routes, and an automatic shut-off timer of no more than 60 minutes on any outdoor gas grill. Properties of 3,600 square feet or more (by the Beaufort County tax record) without a fire suppression system need a fire alarm system monitored by a monitoring company, with smoke alarms in bedrooms, along the escape path and on each story. Properties renewing a permit issued before October 21, 2025 have until May 1, 2027 to comply; newer applications must comply from May 1, 2026.

Guests may park only in the off-street spaces shown in the permit application and approved site plan, with no more than six exterior spaces per property (garage spaces do not count). Each space must be at least 9 by 18 feet on an improved surface. Parking on the street, off-site, in buffers or on unimproved ground is not allowed, and driveways may not be expanded to add rental parking without the Town's written approval. Vehicles parked in violation may be towed or immobilized at the vehicle owner's expense.

Guests must follow the Town's noise rules; activity that unreasonably disturbs the peace of others is prohibited, nighttime hours run from 10:01 p.m. to 6:59 a.m., and noise rules are enforced 24 hours a day. A set statement about these rules must be displayed inside the rental.

Each property needs a designated trash storage area fenced or screened from the street and neighbors. Outdoor containers must be lidded at all times, and may be put out at the curb no more than 24 hours before pickup and must be brought back within 24 hours after.

Any advertisement must list the STR permit number and match the permit application, including the number of bedrooms and the maximum number of vehicles allowed at the property.

Before any guest arrives, the property must prominently display the owner's or agent's contact information, the Town's noise statement, trash instructions (container location, pickup spot and times), notice of any pool or hot tub and its safety equipment, and Town-provided outreach materials.

Any short-term rental property may be inspected by the Town to check compliance, after 48 hours' written notice to the contact on the permit application. Owners are responsible for their own ongoing inspections, and must also follow any other laws and private covenants that apply to the property.

Renting, advertising or operating without complying with the chapter is a violation subject to administrative citation. Fines are $250 for a first infraction, $500 for a second within one year, and $1,000 for a third or later infraction within one year of the previous one, plus a $25 late fee if a fine is not paid within 30 days. Other Town penalties, including business license suspension or revocation, can also apply.

The Town may suspend a permit for one year, pending a hearing before Town Council on revocation, if it was issued in error or obtained by false information, a permit condition is breached, the owner is delinquent on fees, fines or taxes, the property is declared a nuisance, or there are more than two code convictions or more than three administrative citations connected with the property within twelve months. Council's decision may be appealed to circuit court.

The Town charges a 1% local accommodations tax on rent from rooms or lodging furnished to transients in the Town, including residences and condominiums. Stays by the same person for 90 days or more are not taxed. Owners renting for less than 90 days must open an account with the Town's Revenue Services Office.

The Town also charges a 2% beach preservation fee on the same short-stay rent (rentals to the same person for 90 continuous days are not covered). It is collected from guests and paid to the Town with the accommodations tax.

The Town accommodations tax and beach preservation fee are paid quarterly: by April 20 for January to March, July 20 for April to June, October 20 for July to September and January 20 for October to December. A return is required even with no rentals (report zero). Late payments incur a penalty of 5% of the unpaid amount per month, and delinquent businesses face a $1,092.50 municipal summons.

South Carolina charges a 7% tax on rent for rooms, lodgings or sleeping accommodations furnished to transients, including rentals of a residence (S.C. Code § 12-36-920(A)). The South Carolina Department of Revenue (SCDOR) describes this as 5% sales tax plus 2% accommodations tax, together with any local sales and use taxes that SCDOR collects for counties. SCDOR's ST-575 chart lists the total accommodations rate for each county and city.

SCDOR applies accommodations tax to sleeping accommodations of any kind rented to guests for less than 90 consecutive days, including rooms or spaces in your own home and condos. Rentals to the same person for 90 continuous days are not taxed. A home with six or fewer bedrooms is exempt only when the owner or operator lives on the same premises at the time and does not use a rental agency or online travel company to rent the rooms.

SCDOR says owners who book short-term rentals directly must hold a Retail License to file and pay accommodations tax, with one license for each rental location. If you rent only through a property management or online travel company that takes the reservation and the payment, that company remits the tax for the full booking and you do not need a Retail License. A license is also not required if you rent a room or space for no more than one week each calendar quarter, but the tax must still be filed and paid once a year.

Accommodations tax returns and payments must be filed electronically (SCDOR's MyDORWAY or approved software), by the 20th of the month following the end of the filing period.

Under the Local Accommodations Tax Act, a city or county may add a local accommodations tax of up to 3% on stays taxed under S.C. Code § 12-36-920(A). A county may not charge more than 1.5% inside a city or town without that municipality's consent. SCDOR notes that many local accommodations taxes are not administered by SCDOR, so owners must contact the city or county where the rental is located to report them.