Short-Term Rental Rules by Beach Town

A key on the door — every beach town has its own rental rules.

Buying a beach property to rent it out? Every town has different licenses, taxes, and occupancy rules — and the wrong assumption can cost you thousands. Here's the town-by-town breakdown.

Delaware has no statewide short-term rental ban and no statewide rental registry for owners. Instead, each town runs its own system — its own license, its own tax, its own occupancy limits. On top of that, Delaware's 2024 short-term rental law (effective January 1, 2025) added a state-level 4.5% lodging tax and a licensing requirement for booking intermediaries.

If you're buying a rental property at the Delaware or Ocean City beaches, this guide is your starting point — not your finish line. Confirm every figure with the town before you buy or list.

General information only — not legal advice. Rental ordinances change; verify current rules with each municipality.

The state layer (applies everywhere in Delaware)

Before the town rules, the state rules:

4.5% state lodging tax on short-term stays (31 consecutive nights or fewer), under 30 Del. C. Chapter 62 (H.S. 2 for H.B. 168, enacted September 2024; effective January 1, 2025)
Accommodations intermediary license: anyone who facilitates bookings — platforms like Airbnb/Vrbo, property managers, or owners who take direct bookings — needs a $25/year Delaware business license through the One Stop portal. If you list only through a platform, the platform holds the license; if you take direct bookings, you need your own
Sussex County lodging tax: the county was authorized to add up to 3% on short-term rentals in unincorporated areas (check with the county for the current status — this was proposed in late 2024)
No statewide cap, no statewide owner registry — the towns decide the rest

Bethany Beach, DE

The quiet resort — thorough licensing, safety-first

Rental license: Required annually. The application includes a notarized safety certification — smoke detector on every level and in every bedroom, deadbolts openable from inside without a key, GFCI protection on outdoor/bathroom/kitchen/garage outlets, 4-inch address numbers visible from the street, and secure window locks
Rental tax: The town collects a rental tax on gross receipts (confirm current rate and filing schedule with the town — figures change)
Occupancy: Set by the town code — confirm current limits for your property type
Where to apply: Town of Bethany Beach, Town Hall
Investor note: Bethany's safety certification is among the strictest at the beach — budget for compliance (detectors, GFCI upgrades, locks) before your first booking

South Bethany, DE

Small town, specific paperwork

Rental license: Required annually — application due April 15 each year, with a $180 nonrefundable fee (2026 figures)
Rental tax: 8% gross rental tax, due October 31 each year
Non-rental declaration: If you're not renting, file the non-rental declaration instead — the town tracks both
Where to apply: Town of South Bethany, 402 Evergreen Road (southbethany.delaware.gov)
Investor note: The 8% town tax stacks on top of the 4.5% state tax — factor ~12.5% total lodging tax into your revenue math

Fenwick Island, DE

The premium market — premium compliance

Rental license: Annual "rental landlord" license, $185/calendar year, renews January 1; $100 late fee if you rent before obtaining the license
Rental tax: Short-term rental tax returns filed twice yearly (May 30 and November 30). Total lodging tax reported at ~12% as of January 1, 2026 (~4.5% state + ~7.5% town — verify current split with the town)
Occupancy: Maximum 12 persons overnight per dwelling (town code)
No owner-occupancy requirement, no cap on rental nights (per 2026 reporting)
Where to apply: Town of Fenwick Island, 800 Coastal Highway
Investor note: At ~12% combined lodging tax, Fenwick has among the highest total STR tax loads at the Delaware beach — underwrite accordingly

Rehoboth Beach, DE

The big city of beach rentals — detailed rules

Rental license: Annual residential rental license required. Fee schedule: $50 base for a home/apartment with 1–2 bedrooms, plus $20 per bedroom over two (efficiency/one-room: $41 — check the current fee schedule)
24/7 local contact required — you must designate someone reachable around the clock
Annual self-inspection: Owners complete and submit a yearly safety self-certification; new rentals (or rentals out of the licensing cycle) may face a city inspection
Occupancy: 2 persons per bedroom plus 2 (children 6 and under excluded)
Rental tax: 7% local rental tax — the city mails the gross-rental-tax form December 1, payment due February 15
License transfer on sale: A new owner must apply fresh — the license does not transfer with the property. If you're buying a rental with future bookings, put the licensing handoff and prepaid-rent accounting in the contract
Where to apply: City of Rehoboth Beach, 306 Rehoboth Avenue
Investor note: Rehoboth's rules are the most administratively detailed — the 24/7 contact and annual self-inspection favor professional management

Dewey Beach, DE

The party town — businesslike licensing

Rental license: Annual license required; the license year runs May 1–April 30; apply by April 30 to be licensed before the season
License fee: $250 base plus $20 per bedroom over two (town code — check the current schedule)
Safety certification affidavit required — smoke detectors, CO alarms (where fuel-burning appliances or attached garages exist), fire extinguisher, Delaware Fire Marshal code compliance
Occupancy: 2 persons per bedroom plus 2 in the living area (children 5 and under excluded); don't advertise above your limit
Town accommodations tax applies (reported around 3% — confirm current rate with the town); long-term tenants (1-year+ lease on file) are exempt
Window cling: The town issues a license certificate and window cling that must be displayed visibly from the street
Where to apply: Town of Dewey Beach (townofdeweybeach.gov)
Investor note: Dewey's May–April license year is offset from the calendar year — don't assume your license timing matches other towns

Ocean City, MD

Different state, different system — and rules in flux

Rental license: Annual license required for any property rented in Ocean City. $196 base + $50 STR supplement = $246/year for vacation rentals; license year May 1–April 30
Noise permit + supplemental STR license also required annually
Local agent required for non-local owners (60+ miles away) — someone authorized to accept legal notices and respond to property issues within 60 minutes
Platforms must verify licenses — Airbnb/Vrbo cannot list unlicensed Ocean City properties
Lodging tax: ~12% total as of January 1, 2026 (6% Maryland state sales tax + 6% Worcester County room tax — check current rates)
R-1/MH district saga: Ocean City extended a moratorium on new STR permits in residential (R-1) and mobile-home districts through January 2027, then rescinded it in March 2026 after voters rejected the underlying ordinance 834–800. Rules for these districts remain politically live — confirm current status with the town before buying in R-1 or MH zones
Where to apply: Town of Ocean City, Division of Rental Housing
Investor note: Ocean City's compliance load (license + noise permit + STR supplement + local agent + platform verification) is the heaviest in this guide — and the residential-district rules are the most politically volatile. Professional management is close to mandatory for out-of-area owners

Quick-comparison table

Town	Annual license fee	Local rental/lodging tax	State tax on top	Occupancy rule	License year
Bethany Beach, DE	Confirm with town	Confirm with town	4.5% DE	Per town code	Annual
South Bethany, DE	$180	8% (due Oct 31)	4.5% DE	Per town code	Due Apr 15
Fenwick Island, DE	$185	~7.5% town (returns May 30 & Nov 30)	4.5% DE	Max 12 persons	Calendar year
Rehoboth Beach, DE	~$50 + $20/bedroom over 2	7% (due Feb 15)	4.5% DE	2/bedroom + 2	Annual
Dewey Beach, DE	~$250 + $20/bedroom over 2	~3% town (confirm)	4.5% DE	2/bedroom + 2	May 1–Apr 30
Ocean City, MD	$246 (license + STR)	6% Worcester County	6% MD sales tax	Per town code	May 1–Apr 30

The investor's due-diligence checklist

Confirm the license fee, tax rate, and occupancy limit with the town — in writing, for your specific property
Check zoning — some districts restrict or prohibit short-term rentals (especially Ocean City R-1/MH)
Check the HOA — many beach condo and community associations restrict rentals independently of the town (see our HOA guide)
Budget the full tax stack — state + town/county lodging taxes run 11.5–12.5% at the Delaware/Maryland beaches
Price professional management — 24/7 contact requirements and inspection regimes make self-management hard from a distance
On purchase: put the rental-license handoff, prepaid rents, security deposits, and future bookings in the contract — licenses generally don't transfer to new owners
Watch the politics — Ocean City's residential-district rules changed twice in 14 months; assume beach-town rental politics stay active

Sources

Delaware Code Title 30, Chapter 62 (short-term rental lodging tax; H.S. 2 for H.B. 168, enacted 9/30/2024)
Town of South Bethany: 2026 Rental License / Non-Rental Declaration application (southbethany.delaware.gov)
Town of Bethany Beach: Code Chapter 102, Business Licensing (rental license safety certification — ecode360.com)
Town of Fenwick Island: Short-Term Rental License form; Doing Business in Fenwick Island (fenwickisland.delaware.gov)
City of Rehoboth Beach: Residential Rental License application; Residential Rental Ordinance materials (cityofrehoboth.civicweb.net)
Town of Dewey Beach: Residential Rental License application; Town Code licensing fees (townofdeweybeach.gov; ecode360.com)
Town of Ocean City, MD: rental license guidance via Central Reservations (centraloc.com); Avalara MyLodgeTax (moratorium, referendum, and tax coverage 2025–2026)
Checkmate Rentals: Delaware Short-Term Rental Regulations (2026); Dewey Beach STR overview
BnBCalc: Delaware STR guide (state intermediary licensing mechanics)
Sussex County Council memorandum (Oct 2024): proposed county lodging tax on STRs

Rental rules change frequently. Confirm every license fee, tax rate, and occupancy rule with the town before buying, selling, or listing. General information only — not legal advice.