Maryland Short-Term Rental Regulation: A Guide For Airbnb Hosts

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

Short-term rental regulations in Maryland vary by county and city, with some areas having stricter rules than others. It's crucial for hosts to understand and comply with the specific requirements in their location to avoid fines and legal issues. Here's an overview of the key regulations and considerations for starting a short-term rental business in Maryland.

Starting a Short-Term Rental Business in Maryland

To legally launch and operate a short-term rental in Maryland, hosts must:

Obtain a state-level license: As of October 1, 2019, all short-term rental hosts in Maryland must register with the Maryland Short-Term Rental Commission and pay an annual $100 licensing fee. Failure to register can result in fines of up to $1,000 per violation.

Comply with local regulations: Many counties and cities in Maryland have their own specific rules for short-term rentals. For example:

• In Prince George's County, the rental property must be the host's primary residence, and hosts must have liability insurance of at least $1,000,000.
• In Baltimore, hosts must register their short-term rental with the city and obtain a license, which costs $200 and is valid for two years.
• Montgomery County only allows short-term rentals in the owner's primary residence and limits rentals to 120 days per year if the owner is not present.

Collect and remit taxes: Maryland imposes a state-wide sales tax of 6% on all short-term rentals of 88 nights or less. Hosts are responsible for collecting and remitting this tax, although some platforms like Airbnb may do this on their behalf.

Maintain insurance: The state requires hosts to have at least $1,000,000 in commercial liability insurance coverage to protect both hosts and guests.

Follow safety and habitability standards: Short-term rentals must comply with all applicable building, fire, health, and safety codes, and hosts must provide guests with emergency contact information and clearly post fire escape routes.

It's important to note that regulations can change over time, so hosts should stay informed about any updates. For example, in the small town of Chesapeake Beach, a ban on short-term rentals caught some homeowners off guard in 2020.

Additionally, hosts should be aware of any restrictions set by their homeowners association (HOA) or condo association, as these organizations have the power to prohibit or limit short-term rentals in their communities.

By understanding and following all applicable state and local regulations, hosts can run a successful and compliant short-term rental business in Maryland. However, as the battle over short-term rentals continues in some areas like Ocean City, it's crucial for hosts to stay engaged and advocate for fair rules that balance the needs of full-time residents and property owners.

Short-Term Rental Licensing Requirements in Maryland

To legally operate a short-term rental in Maryland, hosts must obtain a state-level license and comply with local regulations. The state-wide licensing process, as outlined by the Maryland Short-Term Rental Commission, involves the following steps:

1. Register with the Commission: Hosts must create an account on the Commission's online portal and provide basic information about their rental property, including the address, number of bedrooms, and maximum occupancy.
2. Pay the annual licensing fee: There is a $100 annual licensing fee, payable online via credit card or electronic check. This fee is non-refundable and must be paid each year to maintain a valid license.
3. Provide proof of insurance: Hosts must submit evidence of at least $1,000,000 in commercial liability insurance coverage. This can be in the form of a certificate of insurance or a policy declaration page.
4. Complete human trafficking prevention training: All short-term rental hosts in Maryland are required to complete a brief online training on identifying and reporting signs of human trafficking. A certificate of completion must be uploaded as part of the licensing process.
5. Agree to comply with all applicable laws and regulations: Hosts must review and agree to abide by all state and local short-term rental laws, including zoning restrictions, occupancy limits, safety requirements, and tax collection obligations.

Once all required information and documentation have been submitted, the Commission will review the application. If approved, a license will be issued within 30 days. The license is valid for one year from the date of issuance and must be prominently displayed in the rental unit.

Failure to obtain a state license or to comply with applicable regulations can result in significant penalties. Hosts found to be operating an unlicensed short-term rental may face fines of up to $1,000 per violation, as well as possible civil or criminal enforcement action.

It's important to note that the state-level licensing requirement is in addition to, not in place of, any local permits or registrations. Many counties and cities in Maryland have their own specific rules for short-term rentals, which may include additional fees, inspections, or restrictions.

For example, in Prince George's County, hosts must also apply for a county-level Short-Term Rental License through the Department of Permitting, Inspections and Enforcement (DPIE). The application process involves:

1. Completing an online application through the county's Momentum portal
2. Paying a $150 initial license fee (with an annual renewal fee of the same amount)
3. Providing proof of primary residence and property ownership
4. Passing a safety inspection of all habitable spaces
5. Completing human trafficking prevention training

The Prince George's County licensing process typically takes around 90 days. Upon submission of the application and fee payment, hosts are issued a 90-day temporary license to operate while the full application is reviewed. If denied, the temporary license may be revoked.

Falsifying information on the application or operating without a valid license in Prince George's County can lead to denial of the license, revocation of an existing license, fines, and being barred from the Short-Term Rentals program. While specific penalty amounts are not provided, unlicensed rentals are subject to enforcement action.

To summarize, short-term rental hosts in Maryland must obtain a state-level license annually and comply with any additional local licensing requirements in their county or city. The state licensing process involves registering, paying a fee, providing proof of insurance, completing a human trafficking prevention course, and agreeing to follow all applicable rules. Failure to do so can result in significant fines and legal consequences. Hosts should carefully review both state and local regulations to ensure they are in full compliance before listing their property for rent.

Required Documents for Maryland Short-Term Rentals

To obtain a short-term rental license in Maryland, hosts must submit several documents as part of the application process. These documents help verify ownership, ensure the property meets safety standards, and confirm compliance with state and local regulations. Here are the key documents required:

Short-Term Residential Rental License Application: This is the main application form that collects information about the rental property, owner, and property management details. It is available on the county's Department of Health and Human Services (DHHS) website.

Proof of Primary Residence: Owners must provide documentation showing the rental property is their primary residence, such as a driver's license, voter registration card, or utility bill.

Proof of Ownership: A copy of the deed or property tax bill is required to verify ownership of the rental property.

Floor Plan: A floor plan of the rental property must be submitted, clearly labeling all rooms and spaces to be used for sleeping.

Maryland State Sales Use and Tax ID: Hosts must register with the Maryland State Department of Assessments and Taxation (SDAT) to obtain a state tax ID for collecting and remitting sales and use taxes.

Liability Insurance: Proof of current and valid liability insurance coverage of at least $1,000,000 is required.

HOA Approval: If the property is part of a homeowners' association (HOA) or condo association, written approval from the HOA must be provided.

Human Trafficking Prevention Training Certificate: Hosts must complete online training on identifying and reporting signs of human trafficking and include the certificate of completion with their application.

Neighbor Notification: Some jurisdictions, like Prince George's County, require hosts to notify immediate neighbors of their intent to operate a short-term rental. Proof of this notification must be submitted.

These documents are typically submitted online through the county's licensing portal or in person at the relevant department, such as DHHS in Montgomery County or the Department of Permitting, Inspections and Enforcement (DPIE) in Prince George's County.

It's important to note that document requirements may vary slightly by county or city, so hosts should carefully review the specific regulations for their location. Failure to provide all necessary documents can result in delays or denial of the short-term rental license application.

By gathering and submitting these required documents, hosts demonstrate their compliance with state and local short-term rental laws and their commitment to operating a safe and legal rental property.

Maryland Short-Term Rental Taxes

When operating a short-term rental business in Maryland, it's essential to understand and comply with the various state and local taxes that apply. Properly collecting and remitting these taxes is a key responsibility for hosts.

Maryland Sales and Use Tax

Maryland imposes a statewide sales and use tax of 6% on the rental price, including any cleaning fees, for short-term rentals of 88 nights or less. Hosts are responsible for collecting this tax from guests and remitting it to the Maryland State Department of Assessments and Taxation (SDAT). Failure to do so can result in penalties and interest.

County Room Rental and Transient Taxes

In addition to the state sales tax, many counties in Maryland levy their own room rental or transient occupancy taxes on short-term rentals. These taxes are in addition to the state sales tax and must be collected by the host and remitted to the county. The rates vary by jurisdiction:

1. Montgomery County: 7% room rental and transient tax on rentals under 31 days
2. Prince George's County: 7% hotel tax on reservations of 89 nights or less
3. Baltimore City: 9.5% hotel tax on rentals under 90 days
4. Anne Arundel County: 7% hotel tax on rentals under 30 days
5. Howard County: 7% hotel tax on rentals under 30 days

It's important to note that these are just examples, and hosts should verify the specific tax rates and rules for their county.

Possible Tax Deductions and Write-Offs

As a short-term rental operator, you may be able to deduct certain expenses related to your business on your tax return to offset your tax liability. Some common deductions include:

1. Mortgage interest and property taxes
2. Utilities (electricity, water, gas, internet, etc.)
3. Cleaning fees and supplies
4. Repairs and maintenance under $2,500 per item
5. Depreciation of the rental property and furnishings
6. Supplies for guests (toiletries, linens, coffee, etc.)
7. Advertising and marketing costs
8. Rental commissions paid to platforms like Airbnb
9. Property insurance
10. Home office expenses, if used for the rental business

To claim these deductions, you'll need to keep detailed records of all your rental-related expenses throughout the year. Consult with a tax professional to ensure you're claiming all eligible deductions and properly documenting and reporting your rental income and expenses.

It's crucial for short-term rental hosts in Maryland to understand and comply with all applicable state and local taxes. By collecting and remitting the required taxes and taking advantage of available deductions, hosts can operate legally and maximize their rental profits.

Does Maryland Strictly Enforce STR Rules?

Based on discussions from Maryland hosts on Reddit and Bigger Pockets, the state appears to enforce short-term rental regulations more strictly than many other markets, although experiences vary by county. Prince George's County, in particular, is known for its rigorous enforcement and detailed requirements, leading some hosts to characterize it as not particularly Airbnb-friendly.

One Reddit user commented, "PG city council is on the wrong side of this. They say they want STRs to accommodate travel nurses and transient workers, yet they don't seem to realize that making the city better and more affordable will attract permanent nurses and permanent workers."3 Another pointed out the county's stringent rules: "If you want to run a hotel/rooming house, great, get the appropriate approvals. Governments should be giving fines to these illegal businesses until they're forced to comply or have the property seized for non-compliance."

In Montgomery County, hosts have reported mixed experiences with enforcement. While the Department of Health and Human Services is responsive to complaints, some Redditors noted a lack of satisfactory follow-up, with properties continuing to operate illegally despite reports. However, the county's regulations are clear, limiting STRs to primary residences and imposing a 120-day annual cap.

Baltimore County is also known for actively enforcing its STR rules, focusing on preserving the character of residential neighborhoods. Hosts on Reddit have encountered issues with neighbor complaints and emphasized the need for diligent property management to avoid problems. While the county offers a viable environment for STRs with proper licensing, the stringent rules have pushed some hosts to operate under the radar or transition to longer-term rentals.

Even in smaller towns like Chesapeake Beach, the battle over short-term rentals has come to a head. In July 2020, the town issued a reminder to residents that STRs were not permitted, catching many off guard. Despite the ban, some homeowners had been operating Airbnbs without realizing the regulations, leading to a petition to change the law.

While some hosts may attempt to skirt the rules, the consensus on Reddit and Bigger Pockets is that Maryland, and particularly counties like Prince George's and Baltimore, are not the most Airbnb-friendly markets compared to other cities. The strict regulations have led some hosts to sell their rental properties or risk fines and legal consequences for non-compliance.

In summary, Maryland counties are known for actively enforcing their STR regulations, with a focus on preserving residential character and limiting the impact of short-term rentals on communities. While successful hosting is possible with proper licensing and responsible operation, the state's overall regulatory environment is more challenging than many other markets, according to the experiences shared by hosts on Reddit and Bigger Pockets.

How to Start a Short-Term Rental Business in Maryland

Starting a short-term rental business in Maryland requires careful planning and compliance with state and local regulations. Here's a step-by-step guide to help you navigate the process:

1. Research local regulations: Before investing in a rental property, thoroughly research the specific short-term rental rules for the county and city where you plan to operate. Understand zoning restrictions, licensing requirements, tax obligations, and any other local ordinances that may impact your business.
2. Choose a suitable property: Select a property that meets the local requirements for short-term rentals, such as being your primary residence in some counties. Consider factors like location, amenities, and potential rental demand when making your choice. If you plan to purchase a property, work with a real estate agent familiar with local STR regulations.
3. Register with the Maryland Short-Term Rental Commission: All short-term rental hosts in Maryland must register with the state's Short-Term Rental Commission and pay an annual $100 licensing fee. Create an account on the Commission's online portal, provide basic information about your rental property, and submit the required fee.
4. Obtain necessary licenses and permits: Apply for any additional licenses or permits required by your county or city. This may include a county-level rental license, a transient occupancy registration, or a special use permit. Gather and submit all required documents, such as proof of ownership, floor plans, and neighbor notifications.
5. Prepare your property: Ensure your rental property is safe, clean, and well-maintained. Make any necessary repairs or upgrades, and furnish the space with comfortable and functional amenities. Consider hiring a professional cleaning service to maintain a high standard of cleanliness between guests.
6. Obtain insurance: Purchase appropriate insurance coverage for your short-term rental, including at least $1,000,000 in commercial liability insurance as required by the state. Consider additional coverage like property damage protection and income replacement insurance.
7. Create a compelling listing: Craft an attractive and informative listing on popular short-term rental platforms like Airbnb and VRBO. Use high-quality photos, write a detailed description of your property and its amenities, and set competitive rates based on local market demand.
8. Implement a guest screening process: Develop a thorough guest screening process to ensure the safety and security of your property and neighbors. Clearly communicate your house rules and expectations, and consider using a reputable guest verification service.
9. Manage your bookings and guests: Once your listing is live, be responsive to booking inquiries and guest communications. Use a reliable system to manage reservations, check-ins, and check-outs. Be available to address any guest concerns or issues promptly.
10. Comply with tax requirements: Register with the Maryland State Department of Assessments and Taxation (SDAT) to obtain a sales and use tax ID. Collect and remit the required state sales tax (6%) and any applicable county room rental or transient occupancy taxes.
11. Keep accurate records: Maintain detailed records of all rental income and expenses, including receipts and invoices. Use a separate bank account for your rental business to simplify accounting and tax reporting. Consider using property management software to streamline your record-keeping.
12. Continuously improve your business: Monitor your guest reviews and feedback to identify areas for improvement. Stay up-to-date with changes in local regulations and best practices in the short-term rental industry. Continuously invest in maintaining and upgrading your property to attract repeat guests and positive reviews.

By following these steps and staying compliant with Maryland's short-term rental regulations, you can build a successful and sustainable rental business in the state. Remember to prioritize guest satisfaction, neighbor relations, and responsible property management to ensure long-term success.

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

For questions about state-wide short-term rental regulations, licensing, and enforcement in Maryland, contact:

Maryland Short-Term Rental Commission

1. 301 W. Preston Street, Room 1101
2. Baltimore, MD 21201
3. Phone: (410) 767-6500
4. Email: str.commission@maryland.gov

For inquiries related to specific county or city regulations and zoning rules, reach out to the appropriate local department:

Montgomery County

1. Department of Health and Human Services (DHHS)
2. Licensure & Regulatory Services
3. 255 Rockville Pike, Suite 100
4. Rockville, MD 20850
5. Phone: (240) 777-3986

Prince George's County

1. Department of Permitting, Inspections and Enforcement (DPIE)
2. Licensing & Enforcement Division
3. 9400 Peppercorn Place, Suite 500
4. Largo, MD 20774
5. Phone: (301) 883-5304

Baltimore City

• Department of Housing and Community Development
• 417 E. Fayette Street, Suite 1125
• Baltimore, MD 21202
• Phone: (410) 396-3575
• Email: dhcd.baltimorerentalregistration@baltimorecity.gov

In addition to official state and county resources, short-term rental hosts in Maryland may find the following online communities and forums helpful for connecting with other local hosts, sharing experiences, and staying updated on regulations:

Maryland Airbnb Hosts Facebook Group: This active group of over 1,000 members is a great place to connect with hosts across the state, ask questions, and share insights.

Bigger Pockets Short-Term Rental & Airbnb Investing Forum: While not specific to Maryland, this forum is a valuable resource for STR hosts nationwide. You can find discussions on a wide range of topics, from regulatory compliance to marketing strategies and operational tips.

Airbnb Community Center - Baltimore Forum: The Airbnb Community Center has a dedicated forum for Baltimore hosts, where you can ask questions, share insights, and engage with fellow hosts in the area.

By leveraging these official contacts and community resources, Maryland STR hosts can navigate the regulatory landscape, connect with peers, and access the support needed to run successful and compliant short-term rental businesses.

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

Based on discussions in online forums, Maryland Airbnb hosts have mixed feelings about local short-term rental regulations. Here are some real-life experiences and stories shared by hosts:

Prince George's County Enforcement Concerns (Reddit): In a thread titled "Investors running an Airbnb that's running our neighborhood," residents complained about issues with a nearby illegal Airbnb, including trash, parking problems, noise, and safety concerns. Commenters noted the county's strict rules requiring STRs to be the owner's primary residence. However, some expressed frustration that even after reporting violations, the county was slow to take enforcement action, allowing problem rentals to continue operating.

Condo Association Restrictions (Bigger Pockets): A real estate investor asked about converting a condo they previously lived in to a short-term rental. Responders cautioned that many condo and homeowners associations in Montgomery County prohibit or restrict STRs, so it's important to carefully review the bylaws before pursuing that strategy. The original poster ultimately converted their property to a 6-month furnished corporate rental to comply with the association rules.

Regulatory Challenges in Baltimore (Reddit): Hosts have reported difficulties obtaining STR licenses in Baltimore County due to evolving regulations and limited communication from the county. One user shared, "I recently tried to license some Airbnb units. I was denied because they said in order to get the license now, the property has to be registered in a personal name and not under an LLC."

Squatter Concerns (Reddit): In a thread discussing long-term guests using tenant rights to stay in Airbnbs, a host shared a story about a friend in Texas who dealt with a guest who wouldn't leave after a 4-day stay. The police considered it a civil matter rather than trespassing due to the state's "habitation laws." While not specific to Maryland, this highlights hosts' concerns about potential squatting situations.

These online discussions provide insight into the challenges and concerns Maryland hosts face in navigating local short-term rental regulations. While some areas like Montgomery County may not proactively enforce the rules, hosts still worry about the potential for neighbor complaints, licensing denials, and financial impacts of sudden policy changes. The experiences shared underscore the importance of thoroughly researching and complying with local regulations to avoid legal and operational issues.

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 area 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.