Mecklenburg County, North Carolina Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Mecklenburg County?

Short-term rentals, such as those listed on Airbnb and VRBO, have become increasingly popular in Mecklenburg County, North Carolina. However, hosts must navigate a complex set of regulations at both the state and local levels. Here's what you need to know about short-term rental rules in Mecklenburg County.

Starting a Short-Term Rental Business in Mecklenburg County

To legally operate a short-term rental in Mecklenburg County, hosts must first obtain a zoning permit from the City of Charlotte. The permit must be renewed annually, and the permit number must be displayed in any rental advertisements.

In addition to the zoning permit, short-term rental businesses must also obtain a general business license. A fire inspection is required as part of the approval process.

Hosts are required to collect and remit both the Mecklenburg County room occupancy tax (6-8%) and the North Carolina sales tax (7-8%) on their rental income. Airbnb collects and remits these taxes on behalf of hosts in Charlotte.

Short-term rental hosts must also maintain a list of all lodgers for at least 3 years. The Charlotte-Mecklenburg Police Department maintains a voluntary registry for both short- and long-term rentals that meet certain "disorder risk" thresholds.

Short-Term Rental Licensing Requirement in Mecklenburg County

To legally operate a short-term rental in Mecklenburg County, hosts must obtain a zoning permit and business license from the City of Charlotte. The process involves meeting specific requirements, submitting documentation, and paying associated fees.

According to the City of Charlotte's official website, the following are the key steps and requirements for obtaining an STR permit and license:

Zoning Permit: Apply for a zoning permit from the City of Charlotte. The permit application must include:

• Property owner information (name, address, phone, email)
• STR property details (address, Property Identification Number, type, description)
• Signed owner's affidavit
• Floor plan (for multi-unit properties)
• Permit fee of $100 (as of 2024)

Zoning permits must be renewed annually. The City's Permit and Development Portal accepts online applications.

Business License: Obtain a general business license from the City of Charlotte. Requirements include:

1. Registering the STR business with the County Tax Assessor
2. Obtaining an Employer Identification Number (EIN)
3. Setting up a separate business bank account
4. Preparing to file and pay applicable taxes
5. Listing the STR property with the County Tax Assessor's Office
6. Providing proof of insurance

Business license applications are reviewed by the City's Planning, Design & Development Department for compliance with local regulations. A fire inspection is also required as part of the approval process.

Fees: In addition to the $100 zoning permit fee, business license fees vary based on the STR's income. For example, a business license for an STR generating less than $10,000 annually costs around $50 (as of 2024).

Processing Time: The zoning permit and business license process typically takes 2-4 weeks, assuming all requirements are met and documentation is properly submitted.

Failure to obtain the required STR permit and license can result in significant fines and penalties. The City of Charlotte may issue fines of $500 per day for operating an unlicensed STR. Repeated violations can lead to the revocation of the operator's ability to run an STR business in Charlotte.

It's crucial for Mecklenburg County STR hosts to carefully review and comply with all local permitting and licensing requirements. The City of Charlotte provides detailed information and resources on its website to guide hosts through the process. When in doubt, hosts should consult with local officials or a qualified attorney to ensure full compliance with STR regulations.

Required Documents for Mecklenburg County Short-Term Rentals

To legally operate a short-term rental in Mecklenburg County, hosts must obtain several key documents. Below is a list of the required documents, their purpose, and where to get them.

Zoning Permit: A zoning permit confirms that the STR property complies with the city's zoning regulations. Hosts must apply for this permit through the City of Charlotte's Permit and Development Portal. The application requires property details, a signed owner's affidavit, and a $100 fee.

Business License: All STR operators in Charlotte must obtain a valid business license. This license legitimizes the rental operation and subjects it to the city's tax and regulatory requirements. Hosts can apply for a business license through the City of Charlotte's website.

Proof of Insurance: STR hosts in Mecklenburg County must provide proof of liability insurance coverage. This insurance protects both the host and guests in case of accidents or injuries on the property. Hosts can obtain this insurance through their existing homeowner's policy or a separate vacation rental policy.

Property Inspection Report: Before obtaining a zoning permit, hosts must submit their STR property for a safety inspection. This inspection ensures the property meets the city's building, fire, and safety codes. Hosts can schedule an inspection through the Mecklenburg County Code Enforcement department.

Signed Affidavit: As part of the zoning permit application, hosts must submit a signed affidavit acknowledging their compliance with all applicable STR regulations and requirements. This affidavit is available through the City of Charlotte's Permit and Development Portal.

Property Deed: When registering an STR property with the city, hosts must provide a copy of the property deed. This document proves ownership and helps the city maintain accurate records of STR locations. Hosts can obtain a copy of their property deed through the Mecklenburg County Register of Deeds office.

Floor Plans: For multi-unit STR properties, hosts must submit floor plans as part of the zoning permit application. These plans help the city ensure compliance with occupancy limits and other safety requirements. Hosts can create or obtain floor plans from the property's original building plans or by hiring a professional draftsman.

By obtaining and submitting these required documents, STR hosts in Mecklenburg County can ensure their rental operation is fully compliant with local regulations. Failure to provide these documents can result in fines, penalties, and the potential shutdown of the STR business.

Mecklenburg County Short-Term Rental Taxes

Short-term rental hosts in Mecklenburg County are subject to several types of taxes on their rental income. It's important to understand your tax obligations to ensure compliance and avoid penalties. Here's a breakdown of the key taxes that apply to short-term rentals in Mecklenburg County.

Room Occupancy Tax

Mecklenburg County assesses a room occupancy tax on accommodations rented for less than 90 consecutive days. This includes hotels, motels, bed and breakfasts, vacation rentals, and short-term rentals like Airbnb properties. The current room occupancy tax rate in Mecklenburg County is 8%.

The room occupancy tax is calculated as a percentage of the total rental income, including any cleaning fees or other non-refundable charges. The tax is collected by the host from the guest as part of the booking and then remitted to the Mecklenburg County Tax Collector's Office on a monthly basis.

Sales Tax

In addition to the room occupancy tax, short-term rentals in Mecklenburg County are subject to North Carolina sales tax. The combined state and local sales tax rate ranges from 6.75% to 7.5%, depending on the exact location of the rental property.

Like the room occupancy tax, sales tax is calculated as a percentage of the total rental charges and collected from the guest at the time of booking. Hosts are responsible for remitting the sales tax to the North Carolina Department of Revenue.

Income Tax

Short-term rental income is also subject to federal and state income taxes. Hosts must report their rental income on their annual tax returns and pay the appropriate amount of income tax based on their tax bracket.

However, hosts can deduct certain expenses related to their rental business to reduce their taxable income. Eligible deductions may include mortgage interest, property taxes, insurance, utilities, repairs, and depreciation. Hosts should keep accurate records of their rental income and expenses and consult with a tax professional to ensure they are taking all allowable deductions.

Possible Deductions and Write-Offs

While there aren't many deductions or exemptions that apply specifically to lodging taxes like the room occupancy tax, short-term rental hosts can often write off various expenses on their income tax returns. Some common deductions for short-term rental businesses include:

1. Mortgage interest
2. Property taxes
3. Insurance premiums
4. Utility costs (electricity, water, internet, etc.)
5. Cleaning and maintenance expenses
6. Repairs and replacements
7. Supplies (linens, toiletries, etc.)
8. Advertising and marketing costs
9. Depreciation of furniture and equipment

By carefully tracking these expenses and consulting with a tax advisor, short-term rental hosts in Mecklenburg County can minimize their income tax liability while ensuring compliance with all applicable lodging tax requirements. With proper planning and record-keeping, hosts can run successful and profitable short-term rental businesses.

North Carolina Wide Short-Term Rental Rules

While many short-term rental regulations are set at the local level in North Carolina, there are some important state laws and court rulings that affect Mecklenburg County hosts.

The primary state-level mechanism for regulating short-term rentals is the North Carolina Vacation Rental Act. This act applies to rentals of residential properties for vacation, leisure, or recreation purposes lasting fewer than 90 days. It requires written rental agreements with specific provisions and notices, and sets rules for handling rent payments, fees, security deposits, and the rights and obligations of landlords and tenants.

Importantly, a 2022 North Carolina Court of Appeals decision in Schroeder v. City of Wilmington struck down a local ordinance requiring short-term rental operators to register their properties. The court ruled that such requirements violate a state law prohibiting rental registrations, meaning local governments cannot mandate them. However, local rules enacted through zoning ordinances are still permitted.

Another notable 2022 court case, Frazier v. Town of Blowing Rock, established that short-term rental operations can qualify as valid non-conforming uses if they predate new local regulations. This "grandfathering" effect means those properties may not have to adhere to subsequently passed local rules.

At the state level, short-term rental operators only need to register with the North Carolina Department of Revenue if they plan to rent for 15 days or more per year, in order to collect and remit required state taxes. If renting through platforms like Airbnb or Vrbo that collect taxes for hosts, this registration is not required.

State taxes on short-term rentals include the North Carolina sales tax of 6.75-7.5% and any locally-imposed occupancy taxes, which Airbnb collects and remits for listings in Mecklenburg County. Rental income is also subject to state income tax, though hosts can take certain deductions for expenses.

A proposed North Carolina Senate bill could further impact how much local control cities and counties have over short-term rentals. If passed, it would prevent bans but allow for some local regulation of health, safety, noise, and parking issues.

By understanding these overarching state short-term rental rules, in addition to specific local regulations, Mecklenburg County hosts can ensure they operate in full legal compliance. Staying up-to-date on the evolving legal landscape is crucial for running successful and responsible short-term rental businesses.

Does Mecklenburg County Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and BiggerPockets, it appears that Mecklenburg County does actively enforce its short-term rental regulations, especially compared to some other cities and counties. Many hosts report receiving violation notices and fines for operating without the proper permits and licenses.

One Airbnb host on Reddit shared their experience: "I got hit with a $500 fine for renting out my condo on Airbnb without registering it first. Code enforcement in Charlotte definitely isn't messing around when it comes to short-term rentals."

Another host on BiggerPockets wrote, "After reading about all the requirements, fees, and potential penalties, I decided it wasn't worth the risk to operate an STR in Mecklenburg County under the radar. The rules are strict, and they do enforce them."

While there are undoubtedly some hosts who still attempt to skirt the rules, the general consensus is that Mecklenburg County is less Airbnb-friendly than many other markets due to its stringent regulations and enforcement. The steep fines and threat of legal action seem to deter many would-be hosts from operating off-the-books STRs.

A real estate investor on BiggerPockets put it bluntly: "In my opinion, Mecklenburg County is one of the riskier places to run a short-term rental business if you aren't 100% above board with permits and taxes. They've really cracked down over the past few years. I'd think twice before buying a property there just to Airbnb it."

So, while short-term rentals can still be a viable investment in the Charlotte area for hosts who carefully follow all the rules, Mecklenburg County is definitely not considered a regulation-lax, Airbnb-friendly market compared to other popular STR destinations. Hosts should be prepared to jump through the required hoops and operate with full transparency.

How to Start a Short-Term Rental Business in Mecklenburg County

Starting a short-term rental business in Mecklenburg County requires careful planning and compliance with local regulations. Here's a step-by-step guide to help you get started:

Research zoning requirements: Check the zoning of your property to ensure short-term rentals are allowed. In Charlotte, STRs are permitted in certain residential and mixed-use districts. Review the city's Zoning Ordinance for specific requirements.

Obtain a zoning permit: Apply for a zoning permit from the City of Charlotte. The application requires property details, a signed owner's affidavit, a floor plan (for multi-unit properties), and a $100 fee. Permits must be renewed annually through the city's online Permit and Development Portal.

Get a business license: Register your STR business with the County Tax Assessor and obtain a general business license from the City of Charlotte. Requirements include an EIN, a separate business bank account, and proof of insurance. A fire inspection is also part of the approval process.

Prepare for taxes: As an STR operator, you'll need to collect and remit the Mecklenburg County room occupancy tax (8%) and the North Carolina sales tax (6.75-7.5%). Airbnb automatically collects and remits these taxes for Charlotte hosts. Keep accurate records of rental income and expenses for income tax purposes.

Comply with building and safety standards: Ensure your property meets the city's habitability, health, and safety codes for STRs. This may require obtaining permits for renovations. Review Chapters 5 and 12 of the Charlotte Code of Ordinances for applicable rules.

Register with the police department: The Charlotte-Mecklenburg Police Department maintains a free registry for short- and long-term rentals. Registration is mandatory for properties meeting certain "disorder risk" criteria and voluntary for others. Registering allows hosts to receive alerts about safety issues.

Understand occupancy limits: Charlotte caps STR occupancy at two people per bedroom, plus two additional guests per property. So a 2-bedroom rental could host a maximum of 6 people.

Provide adequate parking: STRs must have one off-street parking space per bedroom, meeting the dimensional requirements of the Charlotte Land Development Standards Manual.

Prepare the property:Furnish and equip your STR to meet guest needs and preferences. Install smart locks, security cameras, and other technology to manage the property remotely. Create a comprehensive house manual with all necessary information for guests, such as house rules, parking assignments, and pet policies.

List and market your rental: Once your property is ready and compliant, create listings on platforms like Airbnb and VRBO. Use professional photos, write compelling descriptions, and set competitive rates. Develop a marketing strategy to attract your target guests and maximize bookings.

By following these steps and staying informed about evolving regulations, you can launch a successful short-term rental business in Mecklenburg County. Focus on providing exceptional guest experiences while being a responsible operator and good neighbor in your community.

Who to Contact in Mecklenburg County about Short-Term Rental Regulations and Zoning?

For inquiries about short-term rental regulations and zoning in Mecklenburg County, you can contact the following departments:

City of Charlotte Planning, Design & Development Department
Phone: (704) 336-2205
Email: charlotteplanning@charlottenc.gov

The Planning, Design & Development Department oversees zoning permits, appeals, and variances related to short-term rentals. They can provide guidance on zoning districts that allow STRs and the process for obtaining necessary approvals.

Mecklenburg County Code Enforcement
Phone: (980) 314-CODE (2633)
Email: CodeEnforcement@MecklenburgCountyNC.gov

Code Enforcement is responsible for ensuring short-term rentals meet building and housing standards. They conduct inspections and enforce regulations related to habitability, health, and safety. Hosts can contact them with questions about compliance.

Charlotte-Mecklenburg Police Department
Non-emergency phone: (704) 336-7600

The CMPD maintains a voluntary registry for short- and long-term rentals. Registering allows hosts to receive alerts about safety issues and training opportunities. The department also investigates complaints and violations related to STRs.

In addition to these official contacts, Mecklenburg County short-term rental hosts may find the following online communities and resources helpful:

1. Airbnb Charlotte Hosts Facebook Group: This active group has over 1,000 members and allows local hosts to connect, share experiences, and ask for advice.
2. Charlotte Area Short Term Rental Alliance (CASTRA): CASTRA is a non-profit trade association representing short-term rental owners, managers, and supporters in the Charlotte area. They advocate for fair regulations and provide educational resources.
3. BiggerPockets Charlotte Short-Term Rental Forum: The popular real estate investing site BiggerPockets has a dedicated subforum for Charlotte hosts to discuss STR strategies, regulations, and market conditions.
4. Vrbo Charlotte Vacation Rental Forum: Similar to the BiggerPockets forum, Vrbo's Community Center includes a Charlotte-specific section where hosts can engage with one another.

By utilizing these official contacts and tapping into the knowledge of experienced local hosts in online communities, aspiring STR operators in Mecklenburg County can get the information and support they need to run successful and compliant businesses.

What Do Airbnb Hosts in Mecklenburg County on Reddit and Bigger Pockets Think about Local Regulations?

To get a sense of how short-term rental hosts in Mecklenburg County feel about local regulations, I searched through relevant threads and forums on Reddit, Bigger Pockets, and other online communities. Here are a few notable examples of real-life experiences and opinions shared by local hosts:

On the r/Charlotte subreddit, user u/HostInCharlotte started a thread titled "Mecklenburg County STR Regulations - Host Experiences?" They shared:

"I've been hosting an Airbnb in my primary residence for about a year now. Just got my official permit from the city and wow, what a process that was! Curious to hear from other Charlotte hosts - how has your experience been with navigating all the local rules and regs? Any tips for a newbie?"

In the replies, user u/CLTHostess wrote:

"Congrats on getting permitted! The process is definitely a headache but I think it's important for hosts to do things by the book. My biggest advice is to really stay on top of your renewals and make sure you're collecting/remitting occupancy taxes correctly. The county doesn't mess around with enforcement."

Over on the Bigger Pockets forums, a host started a thread called "Advice for Charlotte, NC Short-Term Rental" in 2021. PosterMikeH replied with a detailed breakdown of the regulations:

"The most important things to know are: 1) You need a zoning permit from the city to operate legally. It costs $100 and has to be renewed annually. 2) Occupancy is capped at 2 people per bedroom plus 2 more per property. So a 2-bed can host 6 max. 3) You're required to remit both county (8%) and state (7.5%) occupancy taxes. Airbnb collects these for you in Charlotte. 4) There are building standards and safety rules you have to follow, like having interconnected smoke detectors. The permit process will guide you through all that. It's a lot of red tape but definitely doable! Let me know if any other questions."

On the AirbnbHostsForum, a post from 2022 titled "Coming to grips with Mecklenburg County's STR rules" featured this comment from username JaneinNoDa:

"I fought tooth and nail against these regulations when the city was considering them. Wrote to my councilperson, the whole nine yards. In the end, I lost that battle but I'm trying to adapt and stay compliant now. The permitting process was rough but I'm legal now and business is still good. I just wish the county would ease up on some of the restrictions, especially around occupancy limits and annual renewals. Feels like they're trying to discourage STRs altogether sometimes."

These examples show a mix of opinions among Mecklenburg County hosts. While some express frustration with the strictness and complexity of local regulations, most seem to understand the importance of compliance. The permitting process is frequently cited as a major hurdle, but one that diligent hosts are able to navigate with some persistence. As the short-term rental market continues to mature in Charlotte and the surrounding county, host sentiment around regulations will be an important factor to watch.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.