New Hanover County, North CarolinaShort-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in New Hanover County, North Carolina?

Starting a short-term rental business in New Hanover County is relatively straightforward. The county does not require hosts to obtain any specific permits or licenses to operate a vacation rental.

However, short-term rental operators still need to follow certain rules and best practices:

• Insurance - Have liability insurance that covers short-term rentals, typically at least $500,000 in coverage. Keep a certificate of insurance documenting this.
• Parking - Provide adequate off-street parking, at least one space per rented bedroom, to avoid parking violations and fines.
• Occupancy Limits - Never exceed occupancy of two adults per bedroom plus two additional adults. Post maximum occupancy signs and include limits in rental listings.
• Local Manager - Appoint a local property manager who lives within 25 miles and is available 24/7 to respond to any issues. Post their contact information in the unit and online listing.
• Rental Agreement - Use a formal rental agreement outlining all policies, fees, and local rules. Have guests sign upon arrival and keep records for at least a year.
• Tax Registration - Register with the New Hanover County tax department to collect and remit the required 6% occupancy tax on all rental income under 30 days. File regular tax returns, usually monthly or quarterly.

It's important to note that while the county and city of Wilmington previously required permits and registration for short-term rentals, those requirements were struck down in court in 2021. This ruling found that North Carolina state law prohibits cities from requiring rental permits or registries.

However, New Hanover County can still regulate short-term rentals through general zoning and development standards. So hosts need to check if their property is zoned to allow vacation rentals and follow any applicable zoning rules.

Short-Term Rental Licensing Requirement in New Hanover County

Based on the official New Hanover County website, there are currently no specific licensing or registration requirements for short-term rentals in the county.

In 2021, the North Carolina Court of Appeals ruled in the case Schroeder v. City of Wilmington that the city's short-term rental registration system and cap on rental licenses violated state law. The court found that North Carolina statute prohibits cities from requiring permits or registration for vacation rentals.

As a result of this court decision, New Hanover County and Wilmington can no longer enforce any registration or licensing requirements for short-term rental operators. The previous system requiring hosts to enter an annual lottery for one of 400 available rental licenses in Wilmington is no longer in effect.

So at this time, short-term rental hosts in New Hanover County do not need to submit any applications, documents, or fees to the county or city to obtain a rental permit or license. There is no longer any approval process to legally operate a vacation rental.

However, this does not mean short-term rentals are completely unregulated. Hosts still need to follow other county and city rules related to:

1. Zoning restrictions on where rentals are allowed
2. Parking requirements, usually 1 space per bedroom
3. Occupancy limits, typically 2 adults per bedroom plus 2
4. Noise ordinances and quiet hours
5. Posting a local manager's contact information
6. Having proper insurance coverage, a minimum $500,000 liability policy

Fines for violating these standards can potentially range from $100 to $500 per incident. But without mandatory licensing, enforcement is now more complaint-driven rather than proactively monitored through a registration system.

The key remaining requirement for short-term rental operators in New Hanover County is collecting and remitting the 6% Room Occupancy Tax. Hosts must register with the county tax department to collect this tax from guests and file regular returns, or face penalties and legal issues for noncompliance.

So in summary, after the 2021 court ruling, starting a short-term rental in New Hanover County no longer involves any license applications or approval process with the local government. But hosts still must follow other rules and tax obligations to operate legally and avoid potential fines.

Required Documents for New Hanover County Short-Term Rentals

Based on the official New Hanover County website and zoning ordinance, there are no specific documents or permits required to operate a short-term rental in the county. The previous registration and licensing system for vacation rentals was struck down by the North Carolina Court of Appeals in 2021.

However, short-term rental hosts still need to follow certain rules and best practices, even if they don't need to submit documentation to the county:

1. Liability Insurance - Have a short-term rental insurance policy with a minimum of $500,000 in liability coverage. This protects you and your guests in case of injuries or property damage. Keep a certificate of insurance on file documenting your coverage.
2. Occupancy Limits - Ensure your rental does not exceed maximum occupancy of two adults per bedroom, plus two additional adults. Post the maximum occupancy prominently in the unit. While you don't need to submit this to the county, you should have it documented for your records and to include in the rental listing.
3. Local Manager Contact - Designate a local manager who lives within 25 miles of the rental and is available 24/7 to respond to any issues. Post their name and contact information in the unit. Include the local manager's info in your online listing as well. Keep a record of this for your own documentation.
4. Tax Registration - Register with the New Hanover County tax department to collect and remit the required 6% occupancy tax on all rental income. You'll need to submit a Room Occupancy Tax Application to establish an account for reporting and get set up to file regular tax returns.
5. Rental Agreement - Have a signed, written rental agreement with all guests outlining policies, charges, and local rules. Keep these agreements on file for your records for at least a year after each stay. You don't need to submit these to the county.

So in summary, after the 2021 court ruling, New Hanover County no longer requires short-term rental operators to submit any specific application documents or permits to the local government. The key remaining documentation is registering with the tax department to collect occupancy taxes.

But hosts should still keep good records of their insurance, occupancy limits, local manager info, tax account, and rental agreements to ensure they are following all other applicable short-term rental standards in the county.

New Hanover County Short-Term Rental Taxes

As a short-term rental operator in New Hanover County, you are responsible for collecting and remitting several types of taxes on your rental income. It's important to understand these tax obligations to remain compliant and avoid penalties.

Room Occupancy Tax

The primary tax for short-term rentals in New Hanover County is the Room Occupancy Tax. This is a 6% tax on the gross receipts from rental accommodations for stays less than 90 consecutive days.

As the host, you must collect this 6% tax from your guests as part of the rental price and then remit it to the New Hanover County tax department monthly. This applies whether you rent out a whole home, apartment, condo or just an individual room.

To collect and pay the Room Occupancy Tax, you first need to register with the county tax department and set up an account for reporting. You'll then file a Room Occupancy Tax return and submit the taxes every month, usually due by the 20th day of the following month.

If you use a short-term rental booking platform like Airbnb or Vrbo, they will automatically collect and remit the Room Occupancy Tax on your behalf in most cases. However, for direct bookings outside these platforms, you are still responsible for handling the tax.

Sales Tax

In addition to the Room Occupancy Tax, short-term rentals in New Hanover County are subject to sales tax. The total sales tax rate is 7%, consisting of the 4.75% North Carolina state sales tax plus a 2.25% county sales tax.

Like the occupancy tax, you must add this 7% sales tax to your rental price and collect it from guests. If you rent via a platform like Airbnb, they will collect and remit the sales tax for you. Otherwise, you need to report and pay it to the state.

Income Tax

Finally, as a short-term rental host, you must pay income tax on your net rental earnings. You'll report your rental income and expenses on your annual federal and state income tax returns. The amount of tax owed depends on your total taxable income and tax bracket.

Rental income is usually taxed as ordinary income, subject to federal income tax rates ranging from 10-37% and North Carolina income tax rates of 4.99-5.25%. However, you can deduct many expenses associated with operating your rental to reduce your taxable income.

Short-Term Rental Tax Deductions

To minimize your income tax burden, keep detailed records of all expenses related to your short-term rental business. Some common deductions include:

1. Mortgage interest
2. Property taxes
3. Insurance
4. Utilities
5. Repairs and maintenance
6. Cleaning fees
7. Supplies
8. Advertising costs
9. Property management fees
10. Depreciation

Consult a tax professional to ensure you are tracking and claiming all allowable deductions for your rental business. With diligent record-keeping, you can often significantly reduce your taxable rental income.

In summary, the key taxes for short-term rentals in New Hanover County are the 6% Room Occupancy Tax, 7% sales tax, and income taxes on net rental income. Failure to comply with these tax obligations can result in significant penalties and legal issues, so it's essential for hosts to understand and follow the requirements. Utilizing a platform like Airbnb or a tax professional can help simplify the process.

North Carolina Wide Short-Term Rental Rules

In addition to New Hanover County's local regulations, short-term rental hosts must also comply with state-level rules in North Carolina. The primary state law governing vacation rentals is the North Carolina Vacation Rental Act (VRA).

The VRA applies to any person or entity that is involved in the rental or management of residential property for vacation, leisure, or recreation purposes for less than 90 days. It establishes certain requirements for vacation rental agreements, handling of funds, accounting, and the rights and obligations of landlords and tenants.

Some key provisions of the VRA include:

1. Written Agreement - All vacation rentals must be documented with a written rental agreement signed by the landlord/broker and tenant. The agreement must contain specific notices and provisions required by the VRA.
2. Tenant Duties - Tenants must comply with all obligations of the rental agreement, maintain the property in a clean and safe condition, and be responsible for damages beyond normal wear and tear.
3. Landlord Duties - Landlords must provide a fit and habitable property, make timely repairs, keep common areas safe, and return any security deposit properly.
4. Accounting - Landlords or brokers must maintain accurate records of all payments, receipts, and disbursements related to the rental property and provide an accounting to the tenant.

Importantly, in 2019 North Carolina passed N.C.G.S Section 160D-1207 which prohibits cities and counties from requiring rental property owners to register rental properties with the local government or obtain any specific permission or permit to lease or rent their properties.

This state law has preempted many local government efforts to require permits or registration for short-term rentals. In the 2022 case Schroeder v. City of Wilmington, the NC Court of Appeals struck down Wilmington's short-term rental registration ordinance as conflicting with this statute.

However, the law still allows local governments to regulate vacation rentals through general zoning and development standards, as long as those rules apply uniformly to rental and owner-occupied properties alike.

So while New Hanover County and its municipalities can no longer require permits or licenses specific to short-term rentals, they can still impose generally applicable rules related to zoning, parking, occupancy, noise, and health and safety codes.

As a short-term rental host in New Hanover County, it's essential to understand and comply with both the statewide Vacation Rental Act and the local zoning and land use regulations that remain in effect. Consulting with a local attorney and tax professional is advisable to ensure full compliance.

Does New Hanover County Strictly Enforce STR Rules?

Based on discussions among hosts on forums like BiggerPockets and Reddit, New Hanover County appears to take a relatively relaxed approach to enforcing short-term rental regulations compared to many other cities and counties. The general consensus is that the county is fairly Airbnb-friendly overall.

A key factor is the 2021 court ruling that struck down Wilmington's previous short-term rental registration and cap system. This decision found that North Carolina state law prohibits cities from requiring permits or limiting the number of vacation rentals.

As a result, New Hanover County and Wilmington now have fewer tools to proactively monitor and ensure compliance across the short-term rental market. Without mandatory registration, the county has limited data on the location and number of active rentals.

Many hosts report that enforcement now tends to be more complaint-driven. If neighbors don't file noise, parking, or nuisance complaints about a particular property, county officials are less likely to intervene or issue fines. Some hosts even admit to operating rentals that likely violate certain rules around zoning, occupancy limits, or insurance requirements.

However, this doesn't mean short-term rentals are completely unregulated. The county can still enforce generally applicable zoning, safety, noise, and parking ordinances. Fines for violations can potentially range from $100 to $500 per incident if a property does prompt complaints.

The key remaining requirement that the county does strictly enforce is collecting and remitting the 6% Room Occupancy Tax on all short-term rental income. The county tax department actively monitors and audits occupancy tax compliance, with penalties for failing to register and file regular returns.

But in terms of other short-term rental standards, most BiggerPockets and Reddit users characterize New Hanover County as relatively hands-off and Airbnb-friendly compared to the strict permit and registration systems seen in some major cities. Many hosts operate with minimal interference as long as they avoid neighbor complaints.

So while it's still important for hosts to follow applicable rules and tax obligations, in practice New Hanover County appears to prioritize occupancy tax collection over aggressive enforcement of other short-term rental regulations. The 2021 court ruling has made the county more accommodating to Airbnb and Vrbo rentals overall.

How to Start a Short-Term Rental Business in New Hanover County

Starting a successful short-term rental business in New Hanover County involves several key steps. Here's a comprehensive guide to launching your Airbnb or Vrbo rental:

• Research local regulations thoroughly: Before investing in a rental property, make sure you fully understand all current New Hanover County ordinances, zoning codes, taxes, insurance requirements, and legal considerations for short-term rentals. Rules can vary by municipality. While the county no longer requires permits after recent court rulings, you still need to follow other standards around occupancy limits, parking, and more.
• Choose the right property in an attractive location: Look for a property that will appeal to your target guests, whether that's beachgoers, business travelers, or families. Prioritize locations near popular attractions, restaurants, and amenities. Consider factors like space for larger groups, desirable features like pools or outdoor areas, and the overall condition and design. If you don't want to buy, you can also lease a property to sub-rent on Airbnb.
• Prepare your property for guest stays: Get your rental ready for primetime by deep cleaning, decluttering, and making any needed repairs or design updates. Stage the space with attractive, functional furniture and decor. Stock essential amenities and supplies. Make sure you have safety equipment like fire extinguishers, carbon monoxide detectors, first aid kits, and keyless entry. Create a welcoming atmosphere that will impress guests.
• Get proper insurance coverage: Protect yourself and your property by securing adequate liability insurance that specifically covers short-term rental scenarios. You'll typically need at least $500,000 in coverage. Have a certificate of insurance ready to show the county if needed. Consider additional coverage for property damage, loss of income, and other scenarios.
• Create an enticing listing on Airbnb and Vrbo: To attract guests, you need a compelling listing on major booking sites. Write an attention-grabbing headline, detailed description, and list out all key amenities and selling points. Take high-quality photos that show off your space in its best light. Be transparent about house rules, fees, and area information. Consider hiring a professional photographer to really make your listing shine.
• Automate your rental operations with software: As you launch your rental business, look for tools and technology to streamline your workload. Vacation rental software can help automate guest communication, coordinate turnovers with cleaning staff, sync bookings across platforms, and more. This will save you time and stress as you start to get reservations.
• Register to collect and pay occupancy taxes: Before welcoming your first guests, make sure you register with the New Hanover County tax department to collect and remit the required 6% occupancy tax on all rental income under 30 days. You'll need to file regular tax returns, usually monthly or quarterly, to stay compliant. Failure to follow tax rules can result in penalties and legal issues.

By following these steps carefully, you can lay the groundwork for a successful and compliant short-term rental business in New Hanover County. While the process takes research and preparation, the potential for extra income makes it an attractive venture for many local property owners and investors.

Some additional tips for success:

1. Be a responsible host by clearly communicating all rules and expectations with guests upfront
2. Go above and beyond with your amenities and service to earn great reviews and repeat bookings
3. Stay up-to-date on any changes to local short-term rental regulations
4. Consider hiring a local property manager if you need help or live far away
5. Look for opportunities to adjust your nightly rates based on seasonal demand and local events
6. Network with other New Hanover County Airbnb hosts to share ideas and support

With thoughtful planning and a commitment to creating outstanding guest experiences, you can build a thriving short-term rental business in the Wilmington area.

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

If you have questions about short-term rental regulations or zoning requirements in New Hanover County, here are the key contacts and resources:

New Hanover County Planning & Land Use Department

1. General inquiries: 910-798-7165 or 910-798-7116
2. Zoning questions: Contact Christine Bouffard, Zoning Compliance Official at 910-798-7074 or cbouffard@nhcgov.com
3. Website: https://www.nhcgov.com/528/Planning-Land-Use

The Planning & Land Use Department handles rezonings, site plan reviews, zoning verification letters, and other land use matters for unincorporated New Hanover County. While the county no longer requires permits for short-term rentals, they can answer questions about zoning districts where rentals are allowed and other applicable regulations.

New Hanover County Tax Department

1. Room Occupancy Tax questions: 910-798-7187 or email the Finance Department at https://www.nhcgov.com/1001/Room-Occupancy-Tax-Information
2. Website: https://www.nhcgov.com/1001/Room-Occupancy-Tax-Information

Contact the county tax department to register to collect and remit the required 6% Room Occupancy Tax on short-term rental income. They can assist with tax forms, filing requirements, and payment processes.

Local Short-Term Rental Host Groups

1. Wilmington Area Vacation Rental Association (WAVRA): https://wavra.wildapricot.org/
2. Wilmington Regional Association of Realtors (WRAR) Property Management Division: https://www.wrar.com/property-management

These organizations provide networking, education, and advocacy for short-term rental operators in the Wilmington area. Joining can help you stay up-to-date on regulations and connect with other local hosts.

Online Short-Term Rental Host Forums

• Bigger Pockets Wilmington Forum: https://www.biggerpockets.com/forums/530/topics/956870-short-term-rentals-in-wilmington-nc
• Airbnb Community Center - Wilmington Hosts: https://community.withairbnb.com/t5/Hosting/ct-p/hosting-forum
• Wilmington Subreddit: https://www.reddit.com/r/Wilmington/

These online forums allow you to ask questions and get advice from experienced short-term rental hosts in the Wilmington and New Hanover County area. Searching past threads can provide helpful insights.

By utilizing these key government, industry group, and online resources, you can get answers to your questions about short-term rental regulations and zoning in New Hanover County. Building relationships with local officials and other hosts is one of the best ways to navigate the changing regulatory landscape successfully.

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

Opinions among short-term rental hosts in New Hanover County vary on forums like Reddit and BiggerPockets. However, most seem to agree that the regulatory environment has become more favorable since the 2021 court ruling struck down Wilmington's previous registration and lottery system.

On the Bigger Pockets forum, one host shared their experience:

"I've been operating a successful Airbnb in Wilmington for the past 3 years. The recent court decision overturning the city's registration requirement has been a game changer. I no longer have to worry about the annual lottery or caps on rentals. As long as I follow the other rules around parking, occupancy, etc., I've had no issues with the city. It's a much more welcoming environment for hosts now."

However, some hosts on Reddit report ongoing challenges with neighbor complaints, even without the registration system:

"While I'm glad the registration requirement is gone, I still have to be very careful about neighbor relations. Some residents in my area are not thrilled about the growth in vacation rentals and will quickly report any noise or parking problems. I make sure my guests are well-informed about the rules and so far have avoided any major issues. But it's an ongoing process to maintain good relationships with the surrounding community."

Other Reddit users advise new hosts to be proactive about communication:

"If you're starting an Airbnb in Wilmington, I highly recommend reaching out to your neighbors beforehand. Introduce yourself, share your contact info, and let them know you'll be responsive if any concerns arise. A little bit of outreach can go a long way in preventing complaints down the line."

On the Wilmington subreddit, opinions are mixed. Some residents express frustration with the growth of short-term rentals and the loss of the registration system. But others see the economic benefits for the community:

"I know not everyone loves the influx of Airbnbs, but they've been a major factor in Wilmington's tourism boom. The occupancy taxes collected fund beach nourishment and other projects. And the visitors support a lot of local businesses, especially in the off-season. There has to be a balance, but I don't think the sky is falling like some folks claim."

Overall, the consensus among Wilmington hosts seems to be that the current regulatory environment is workable, though not without its challenges. Proactive communication, strong rule enforcement, and being a good neighbor are key to success.

As one BiggerPockets user summed it up:

"Wilmington is a great market for vacation rentals right now. The recent legal changes have opened up a lot of opportunity. But hosts still need to do their homework, follow the remaining rules, and be professional. It's not the wild west - but it's a much friendlier landscape than a few years ago. Treat it like a serious business and you can do very well."

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.