South Carolina short-term rental rules for owners

South Carolina has no statute that either protects or restricts short-term rentals as such. There is no state rental permit, no state registry and no preemption of local zoning. What the state does control is taxation, and it does so in more layers than many first-time owners expect. Everything else is decided by the town or county where the property sits, which on this coast can mean two very different rulebooks a few miles apart.

Local control, and two bills pulling in opposite directions

The 2025-2026 legislative session saw proposals on both sides. House Bill 3861 would have barred cities and counties from banning short-term rentals, with loss of certain state funds as the penalty; it was referred to committee on January 30, 2025, and has not advanced. Senate Bill 442 went the other way, expressly authorizing local governments to register, cap, inspect and charge fees for short-term rentals, and to require commercial liability insurance; it was referred to the Senate Judiciary Committee in March 2025. Neither is law as of September 2026, so the status quo holds and municipalities regulate through their zoning and business licensing powers.

Local approaches fall into roughly three families:

• Dedicated annual permits on the resort islands, such as Hilton Head Island's short-term rental permit with parking, trash, fire-safety and complaint-response requirements.
• Zoning-based limits, as in Myrtle Beach, where visitor accommodations are allowed in resort and commercial districts but not in single-family residential zones.
• Permits with location tests, as in Columbia, where investor-owned rentals in residential neighborhoods face stricter conditions than owner-occupied ones.

The state tax layers

The Department of Revenue treats a short-term rental as an accommodation. Stays of under 90 continuous days carry the 5% state sales tax plus the 2% state accommodations tax, a combined 7% before any local tax. Cities and counties then add local accommodations taxes, and many also levy hospitality taxes or local option sales taxes.

• When a property management company or an online travel platform takes the booking and the payment, the SCDOR makes it responsible for remitting the tax on the full booking amount.
• The small-lodging exemption is narrow: it covers places with six or fewer sleeping rooms only where the owner lives on site and uses no rental agency or online travel company. Investor properties rarely qualify.

Property tax: 4% versus 6%

Under section 12-43-220 of the South Carolina Code, a legal residence is assessed at 4% of fair market value, while other real property, including second homes and rentals, is assessed at 6%. A home run as a short-term rental does not keep the owner-occupant ratio, and county assessors do check listings. Build the higher assessment into your numbers from the start, especially if you are converting a former primary residence, since the change can raise the tax bill by roughly half before any millage differences.

Business licenses and local filings

Nearly every municipality requires a business license for a rental operation, usually renewed each year and priced on gross receipts. Local accommodations and hospitality taxes are typically filed with the city or county itself, and platform collection of these local layers is uneven. Hilton Head Island, for instance, expects owners to file its 3% local accommodations tax themselves unless a licensed property manager does it for them.

Storms, insurance and regimes

Much of the coast sits in hurricane territory. Standard homeowner policies often exclude commercial rental use and never cover flood, and near the ocean wind cover may come from a separate carrier or the state's wind pool. Many resort communities and regimes, the South Carolina term for condominium associations, have their own rental rules, check-in procedures and minimum stays. Hilton Head Island asks for the association's approval letter with a permit application where one applies.

Checklist for owners

• Identify which government has jurisdiction: town, city or unincorporated county.
• Confirm the zoning district allows short stays and whether a separate rental permit exists.
• Obtain the business license and register for state sales and accommodations tax if you take direct bookings.
• Register for local accommodations and hospitality taxes and find out which ones your platforms collect.
• Expect the 6% assessment ratio and plan cash flow accordingly.
• Read the regime or HOA documents and price wind and flood cover before you buy.

If you own a South Carolina property or are considering one, we study every request and tell you honestly whether and how we can help.