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

Starting a Short-Term Rental Business in Wake County

To legally launch and operate a short-term rental like an Airbnb or VRBO in Wake County, North Carolina, you must follow the regulations set by the local government. In Raleigh, the county seat, STRs are permitted as a "Limited Use" in certain zoning districts including R-1, R-2, R-4, R-6, R-10, RX, OX, NX, CX, and DX.

Key requirements include:

• Obtaining a zoning permit from the City of Raleigh
• No cooking facilities allowed in bedrooms (except in studio rentals)
• No exterior advertising signage
• STR guests cannot hold special events or gatherings in residential zones
• In multi-unit buildings, no more than 25% or 2 units (whichever is greater) can be used as STRs
• Operators must comply with all state and local laws related to fire codes, building codes, smoke/CO detectors, housing codes, and taxes
• The zoning permit number must be posted on all STR advertisements and on the property itself

Raleigh's STR ordinance went into effect in March 2021, replacing previous "Homestay" regulations. As of 2022, the city had 291 registered STRs, with 83% registering that year after the new law took effect.

Hosts are also required to collect state sales tax (4.75% as of 2024) and local room occupancy taxes (2-6%) from guests. STR booking platforms like Airbnb collect and remit these taxes on behalf of hosts in many cases.

One Raleigh STR operator shared on Reddit that it can be confusing to determine if operating an STR is legal, especially outside city limits. They advised contacting the local City Council member or Mayor's office for clarity if no STR ordinance exists yet.

Overall, the STR market has grown rapidly in Wake County, with Airbnb and VRBO listings increasing 81% in Raleigh over 2 years. Some argue this reduces affordable housing, but others say the relatively small number of STRs isn't a major factor compared to the overall housing shortage. With the proper permits and procedures though, STRs can be a viable business opportunity in Wake County.

Short-Term Rental Licensing Requirements in Wake County

To legally operate a short-term rental in Wake County, you must obtain a zoning permit from the City of Raleigh. The permit application requires submitting the following documents via the online Permit and Development Portal:

1. Completed Short-Term Rental Application
2. Floor plan clearly labeling all rooms
3. Proof of property ownership or notarized Owner's Affidavit if the applicant is not the owner
4. Designated Responsible Party Form

Permit fees are due when the permit is issued. As of 2024, the fee for an STR zoning permit is $172. Annual renewal fees are the same amount as the original permit fee.

After the City processes the application, the STR operator will receive their Short-Term Residential Rental Registration number. This number must be conspicuously posted on all STR advertisements, including the listing itself.

The permitting process typically takes 1-2 weeks from submission to approval, if all required documents are provided. Incomplete applications may extend the timeline.

Failure to obtain a permit before operating an STR may result in fines starting at $100 per day. Repeated violations can lead to higher fines of $500 per day. The City also has the authority to revoke an STR permit if the operator fails to comply with any provisions of the ordinance.

It's important to note that obtaining a permit does not override lease agreements, HOA rules, or other legally binding contracts that may prohibit STRs. Operators should carefully review any such restrictions before applying for a permit.

Required Documents for Wake County Short-Term Rentals

To apply for a Short-Term Rental permit in Wake County, you must submit the following documents:

1. Short-Term Rental Application: This is the main application form that collects information about the property owner, rental unit details, and the 24/7 responsible party. It also includes acknowledgments that the applicant has read and will comply with all STR ordinance requirements.
2. Floor Plan: A detailed floor plan or building layout clearly labeling and identifying the use of each room is required. This helps verify that there are no illegal cooking facilities in bedrooms and that the STR meets building code requirements.
3. Proof of Property Ownership: Applicants must demonstrate they are the legal property owner. This can be done by providing a copy of the property deed, tax record, or utility bill in the owner's name. If the applicant is not the owner, they must submit a notarized Owner's Affidavit giving them permission to operate the STR.
4. Responsible Party Designation Form: STR operators must designate a Responsible Party who can be contacted 24 hours a day, 7 days a week to respond to any issues that arise with the rental. This form collects their contact information and must be kept up to date.

These documents must be submitted through the City of Raleigh's online Permit and Development Portal when applying for the STR zoning permit. The portal allows applicants to upload each required document directly.

Failure to provide all required documentation may delay the processing of your STR permit application. Incomplete applications will not be accepted.

Wake County Short-Term Rental Taxes

As a short-term rental operator in Wake County, North Carolina, you are responsible for collecting and remitting several state and local taxes:

1. State Sales Tax: North Carolina imposes a statewide sales tax of 4.75% on short-term rentals (stays less than 90 continuous days). This tax is administered by the North Carolina Department of Revenue and is remitted by either the STR operator or the rental platform (like Airbnb or Vrbo) on behalf of the host.
2. Local Sales Tax: Wake County levies an additional 2% sales tax on top of the state rate, for a total of 6.75%. This local portion is also collected and remitted along with the state sales tax.
3. Wake County Room Occupancy Tax: A 6% occupancy tax applies to all rentals of accommodations in Wake County, including short-term rentals. This tax is collected by the host and paid to the Wake County Department of Tax Administration on a monthly basis.

So in total, short-term rental guests in Wake County pay a 12.75% tax on their stay - 6.75% in sales taxes and 6% in occupancy taxes. STR operators are responsible for collecting these taxes from guests and filing the appropriate returns, unless they only rent through a platform that collects and remits the taxes for them.

It's important to note that if you rent your property for fewer than 15 days per year, that rental income is tax exempt and you do not need to collect taxes. But once you exceed the 14-day threshold, all rental income is taxable.

Possible Tax Deductions

STR operators can deduct many of the expenses involved in running their rental business to reduce their taxable income. Some common deductible expenses include:

1. Mortgage interest
2. Property taxes
3. Insurance
4. Utilities
5. Repairs and maintenance
6. Supplies
7. Advertising and platform fees
8. Depreciation on the rental property

Hosts should keep detailed records and receipts for all rental-related expenses. Working with a tax professional is recommended to ensure you are claiming all the deductions you are eligible for. With proper tax planning and expense tracking, STR operators can significantly reduce their overall tax burden.

North Carolina Wide Short-Term Rental Rules

In addition to local regulations in Wake County, short-term rental operators must also comply with state-level laws in North Carolina. The primary state statute governing vacation rentals is the North Carolina Vacation Rental Act (VRA).

The VRA defines a "vacation rental" as the rental of residential property for vacation, leisure, or recreation purposes for fewer than 90 days by a person who has a place of permanent residence elsewhere. The act outlines requirements for vacation rental agreements, handling of tenant security deposits, property maintenance, and eviction procedures.

Key provisions of the VRA include:

1. Vacation rental agreements must be in writing and contain specific information, including a description of the property, rental period, rental rates, and any tenant fees
2. Agreements must also include a statutorily-prescribed notice to tenants regarding their rights and obligations
3. Landlords must keep tenant security deposits in a trust account and provide an accounting to the tenant within 30 days after the tenancy ends
4. Landlords are responsible for providing a fit and habitable premises and must repair or remedy any unsafe or unsanitary conditions
5. Expedited eviction procedures allow landlords to remove tenants for specified reasons, such as holding over after the end of the rental term or violating the rental agreement

In 2019, the North Carolina General Assembly passed N.C.G.S. § 160D-1207, which prohibits cities and counties from requiring rental property owners to register rental properties with the local government. This effectively eliminated the authority of municipalities to enact short-term rental registration requirements.

However, in the 2022 case Schroeder v. City of Wilmington, the North Carolina Court of Appeals ruled that Wilmington's short-term rental registration ordinance was not prohibited by the statute because it was narrowly tailored to serve a legitimate government interest. This decision may open the door for other cities to enact similar registration requirements.

At the state level, North Carolina imposes sales and occupancy taxes on short-term rentals. The statewide sales tax rate is 4.75%, with counties levying an additional 2-2.75% depending on the jurisdiction. Mecklenburg County, where Charlotte is located, has a 7.25% combined sales tax rate as of 2024.

Vacation rental operators must also collect and remit county occupancy taxes, which range from 3-6% of the gross receipts derived from the rental. In Wake County, the occupancy tax rate is 6%.

It's crucial for short-term rental hosts in North Carolina to understand and comply with all applicable state and local laws. Failure to do so can result in fines, penalties, and legal action. Consulting with a local attorney specializing in landlord-tenant law is advisable to ensure regulatory compliance.

Does Wake County Strictly Enforce STR Rules?

Based on discussions from local hosts on forums like BiggerPockets and Reddit, it appears that Wake County and the City of Raleigh do not strictly enforce short-term rental regulations, making the area relatively Airbnb-friendly compared to some other cities.

While Raleigh's STR ordinance technically requires hosts to obtain a permit and follow certain rules, many operators continue to list their properties on Airbnb and Vrbo without full compliance. The city government has acknowledged that they are not proactively enforcing the regulations at this time.

One Raleigh Airbnb host on Reddit shared that they contacted the Mayor's office and were told the city isn't actively cracking down on STRs. However, they may issue a violation notice if they receive a direct complaint about a specific property. This seems to be the case only for the most egregious rule-breakers though.

Another host on BiggerPockets mentioned that hundreds of unpermitted STRs are still operating in Raleigh. They advised that as long as you're being a good neighbor and not drawing negative attention, you likely won't face any issues from the city.

So in practice, Wake County is fairly lax about short-term rental enforcement. The government has taken a hands-off approach as the STR market has exploded in the area. While the regulations are on the books, actual enforcement is minimal unless there are serious problems.

This is a common situation in many cities - STR rules exist but are spottily enforced. Hosts are operating in a gray area and accepting some risk of future crackdowns. But for now, Wake County seems content to let the short-term rental industry grow with little interference, making it a relatively friendly environment for Airbnb and Vrbo hosts.

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

Starting a short-term rental business in Wake County, North Carolina involves several key steps to ensure you are operating legally and successfully:

1. Understand Wake County's STR regulations: Familiarize yourself with the local rules governing short-term rentals. In Wake County, STRs are permitted as a limited use in certain zoning districts (R-1, R-2, R-4, R-6, R-10, RX, OX, NX, CX, and DX). Key requirements include obtaining a zoning permit, no cooking facilities in bedrooms, no exterior signage, and limits on the number of STR units in multi-unit buildings.
2. Determine if your property is eligible: Check your property's zoning using Raleigh's iMaps tool to see if STRs are allowed. If you are part of a homeowners association (HOA) or have a lease agreement, review those documents to ensure they do not prohibit STRs. It's better to clear any potential roadblocks upfront.
3. Register your business: Choose a business structure (sole proprietorship, LLC, etc.) and register your business with the state. Apply for an Employer Identification Number (EIN) from the IRS if needed. This step legitimizes your rental business and is necessary for tax purposes.
4. Obtain permits and licenses: Apply for a zoning permit from the City of Raleigh via their Permit and Development Portal. You will need to provide property details, a floor plan, proof of ownership, and a designated responsible party. Permit fees are $172 as of 2024. You must renew the permit annually.
5. Prepare your property: Outfit your rental to be guest-ready with furniture, linens, kitchenware, and amenities. Ensure the space is clean, safe, and complies with any building or fire codes. Consider hiring a professional photographer to take high-quality listing photos to attract guests.
6. Create your listing: Sign up for STR platforms like Airbnb or Vrbo and create your property listing. Write a compelling description, set competitive rates, and establish house rules. Be sure to highlight any unique selling points of your property and the local area to stand out.
7. Automate your rental: Use STR management software or hire a property manager to streamline operations. This can include cleaning coordination, guest communication, pricing optimization, and more. The more you can automate, the more passive income your rental can generate.
8. Comply with tax requirements: Register for a tax account with the Wake County Tax Administration. You will need to collect and remit state sales tax (4.75%), local sales tax (2%), and Wake County occupancy tax (6%) from your guests. Platforms like Airbnb may collect and remit some taxes for you.
9. Launch and optimize: Once your listing is live, focus on delivering an excellent guest experience to earn positive reviews. Solicit feedback from guests and continuously make improvements. Adjust your pricing regularly based on demand, events, and seasonality to maximize revenue.

By following these steps and staying compliant with local regulations, you can build a successful short-term rental business in Wake County. Always prioritize guest satisfaction and be a good neighbor to ensure the long-term viability of your STR.

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

For questions about short-term rental regulations and zoning in Wake County and Raleigh, here are the key contacts:

Wake County Planning, Development, and Inspections

1. General questions about planning and zoning: Wake.Planning@wake.gov
2. General questions about building and inspections: Wake.Permitting@wake.gov

City of Raleigh Planning and Development Department

1. Phone: (919) 996-2492
2. Email: currentplanning@raleighnc.gov
3. Short-Term Rental website: https://raleighnc.gov/permits/services/short-term-rentals

For specific staff contacts, consult the Wake County Planning, Development, and Inspections staff directory: https://www.wake.gov/departments-government/planning-development-inspections/inspections-permits/contact-us

In addition to official government resources, connecting with the local short-term rental host community can provide valuable support and advice:

• Join the Raleigh Airbnb Host Club on Facebook to network with other local hosts
• Participate in the Raleigh Real Estate Investing group on BiggerPockets to discuss STR opportunities and challenges: https://www.biggerpockets.com/forums/521-raleigh-real-estate-investing
• Follow discussions on short-term rentals in the r/raleigh subreddit: https://www.reddit.com/r/raleigh/search/?q=short%20term%20rental&restrict_sr=1

These peer groups allow you to learn from the experiences of other Raleigh STR operators and stay up-to-date on regulatory developments that may impact your business. Building a strong network with your fellow hosts is key to navigating the evolving world of short-term rentals.

What Do Airbnb Hosts in Wake County on Reddit and BiggerPockets Think about Local Regulations?

Discussions on Reddit and BiggerPockets provide insight into how short-term rental hosts in Wake County view and navigate local regulations:

On Reddit, one host shared their experience contacting the Raleigh Mayor's office about the legality of operating an Airbnb. They were told that while STRs are technically not allowed under current codes, the city is not actively enforcing the rules unless they receive a direct complaint. However, a notice of violation may be issued in the case of a complaint.

Another Raleigh host on Reddit mentioned renting out their spare bedroom on Airbnb in between longer-term tenants. They noted that many hosts continue to operate, as the city hasn't shifted from its lack of enforcement absent neighbor complaints. The host advised that as long as you're being a good neighbor yourself and not drawing negative attention, you likely won't face issues.

On BiggerPockets, a prospective STR investor asked about regulations in the Raleigh area. One response highlighted that the city passed an ordinance effective January 2020 that hosts need to be aware of. It was suggested to either operate and see if any fines are incurred, or wait to get more clarity on the new rules.

In another BiggerPockets thread, an investor asked about Airbnb rules specifically in Watauga County, NC. A reply noted that the North Carolina General Assembly passed a law in 2019 preventing cities from regulating STRs. This statewide action supersedes some local ordinances.

Overall, the sentiment among Raleigh hosts seems to be that while regulations are on the books, enforcement is sporadic unless problems arise that generate complaints. Many continue to operate in this gray area, while keeping an eye on how new ordinances passed by the city council will be implemented. The statewide law limiting local STR regulation has also created some confusion that hosts are grappling with.

Disclaimer: While we here at BNBCalc strive to keep all of our 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 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.