Short-term rentals on the Delaware and Maryland beaches

The Delmarva beaches form one market across two states: Lewes, Rehoboth Beach, Dewey Beach, Bethany Beach and Fenwick Island in Delaware, then Ocean City, Maryland, with its boardwalk and high-rise condos. Washington, Baltimore and Philadelphia supply most of the guests. The season runs from Memorial Day to Labor Day, with shoulder weekends in spring and fall, and the stock mixes oceanfront condos, bayside townhouses and family homes in beach communities.

The Delaware side

Delaware introduced a statewide 4.5% tax on short-term rental occupancies for rental agreements signed on or after January 1, 2025. The accommodations intermediary collects it: that is the platform, or the owner when booking directly. Cleaning fees, deposits and municipal taxes are excluded from the base. Towns add their own layer. Rehoboth Beach requires a rental license and levies a rental tax on property owners, billed each year, separate from the lodging tax that hotels pay. Dewey, Bethany and Fenwick Island license rentals in their own way, and several beach communities are governed by strong associations.

Ocean City, Maryland

Ocean City requires an annual rental license, an emergency contact and compliance with noise rules, while Maryland sales tax and Worcester County's room tax apply to stays. The town has been through a turbulent period. A March 2025 ordinance to phase out short stays in single-family (R-1) and mobile home districts was rejected by voters in August 2025; a moratorium on new permits in those districts followed; and in March 2026 the council repealed that moratorium after a petition forced the issue. New permits are available again in those districts, and the rest of the framework is unchanged.

Our advice

• On either side of the state line, start with the exact town and the association documents.
• In Ocean City, check whether a new council proposal is pending before buying in a residential district.
• Budget for flood insurance and plan cancellation terms for hurricane season.
• Organize turnovers around summer traffic on the bridges and Route 1.

One market, two states, several licences

Buyers compare Rehoboth with Ocean City on price, when the paperwork differs by state. On the Delaware side the 4.5% state tax follows the date the rental agreement was signed and is collected by the intermediary, with the town licence and the annual rental tax on top; on the Maryland side an annual town licence, state sales tax and the county room tax apply instead. Beach community associations then add conditions of their own. Establish which jurisdiction an address actually sits in before comparing two yields.

We study every request and tell you honestly whether and how we can help.