Short-Term Rental Laws in Ocean City, MD (2026)
Short-term rentals (30 consecutive days or fewer) are legal town-wide in Ocean City, MD, but every rental property must hold an annual Rental License & Noise Control Permit plus a supplemental Short-Term Rental License — $246 total per unit, renewing each May 1. The biggest restriction is in the R-1 single-family and MH mobile-home districts, where overnight occupancy (midnight–7 a.m.) is capped at 2 persons per bedroom plus 2, and where a moratorium on new STR licenses ran through early 2026 until the council repealed it on February 17, 2026 after a citizen petition; a proposed 5-night minimum stay was rejected by voters in a July 2025 referendum, so there is currently no minimum-stay rule. Always confirm current requirements with the city before operating.
Ocean City STR rules at a glance
| Legal status | Allowed with permit |
|---|---|
| Permit required | Yes |
| Permit name | Rental License & Noise Control Permit plus Short-Term Rental License (Short-Term Rental Housing Unit additional fee) |
| Permit fee | $246 |
| Renewal | Annual |
| Owner occupancy required | No |
| Primary residence only | No |
| Total occupancy taxes | ~12% of gross revenue |
| Insurance | No STR-specific insurance requirement identified in Town Code Chapter 14, Article V (Rental Housing) or on the rental license application. |
| Enforcement | Enforced by the Division of Rental Housing (Planning & Community Development, Fire Marshal, and Finance). Applying for a license constitutes consent to inspection during reasonable hours for the entire license term; properties are inspected on a random five-year rotation (2025-2029). Owners must designate a contact legally authorized to accept service of process and able to respond to the property within 60 minutes, keep rental records for five years, display emergency contact info in the unit, include the rental license control number in all advertising, and may not advertise more bedrooms than approved on building permit plans. Three documented calls for service (noise, overcrowding, disturbance of the peace, etc.) or citations at the property within 12 months triggers automatic suspension of the rental license for up to 30 days (Code Sec. 14-176). |
| Current rules effective | 2025-02-03 |
What will guests pay in taxes on a Ocean City stay?
Itemized occupancy taxes for Ocean City, MD — enter your nightly rate to see the real cost breakdown.
Ocean City occupancy tax calculator
| Gross rent | $450.00 |
| Maryland state sales and use tax (6%)· collection varies | $27.00 |
| Worcester County room tax (hotel rental tax) (6%)· collection varies | $27.00 |
| Total tax (12%) | $54.00 |
| Guest pays | $504.00 |
Estimate only. Platform collection varies by listing site and agreement; verify rates with the taxing authorities.
Permits & licensing
Ocean City requires Rental License & Noise Control Permit plus Short-Term Rental License (Short-Term Rental Housing Unit additional fee) to operate a short-term rental — the fee is $246, renewed annual.
Per Resolution 2025-01 fee schedule: base rental license (condo unit, single-family home, timeshare, or rooming house) is $196.00 including the $25 Noise Control Permit; renting for 30 consecutive days or fewer requires the Short-Term Rental Housing Unit additional fee of $50.00, for a $246.00 total. Apartment buildings and hotels/motels pay $196 plus $8.00 per sleeping room. Licenses issued between December 1 and May 1 are half-year at half fee. Late charge of 10% after 15 days plus 2% every 30 days thereafter (Code Sec. 14-34).
Zoning & location rules
STR licenses are issued town-wide, including the R-1 Single Family Residential and MH Mobile Home districts. In R-1/MH, rental-housing occupancy is limited to 2 persons per bedroom plus 2 additional persons (excluding children 10 and younger) between midnight and 7:00 a.m. (Code Sec. 14-177); all other districts use a 40-sq-ft-of-floor-area-per-person standard. A moratorium on NEW STR licenses in R-1/MH (emergency moratorium approved Feb. 3, 2025, extended Dec. 1, 2025 through Jan. 3, 2027) was repealed by the Mayor and Council on Feb. 17, 2026 after a validated referendum petition, so new STR license applications in R-1/MH have resumed. A proposed replacement ordinance capping R-1/MH STR licenses at 10% of improved properties (about 375 licenses) was dropped by the council without action at its Feb. 10, 2026 work session. A 5-night minimum stay for R-1/MH (Ordinance 2025-04, escalating to 31 nights in 2027) was rejected by voters 834-800 in a July 22, 2025 referendum and never took effect.
Taxes
| Tax | Rate | Who collects |
|---|---|---|
| Maryland state sales and use tax6% of the listing price including cleaning fees. Airbnb and Vrbo collect and remit for platform bookings; for direct bookings the host remits to the Comptroller of Maryland. Airbnb also collects a 3% tax on its service fees (taxable IT services). | 6% | varies |
| Worcester County room tax (hotel rental tax)Raised from 5% to 6% effective January 1, 2026; applies to all sleeping-accommodation rentals of 4 months or less, including inside Ocean City town limits. Airbnb collects/remits for its bookings (its help page still showed the old 5% rate as of retrieval); otherwise the owner or rental agent registers with and remits to the Worcester County Treasurer's Office on reports due the 21st of the month for the previous month's rentals (10% penalty plus 0.5%/month interest when delinquent). | 6% | varies |
Enforcement & penalties
Enforced by the Division of Rental Housing (Planning & Community Development, Fire Marshal, and Finance). Applying for a license constitutes consent to inspection during reasonable hours for the entire license term; properties are inspected on a random five-year rotation (2025-2029). Owners must designate a contact legally authorized to accept service of process and able to respond to the property within 60 minutes, keep rental records for five years, display emergency contact info in the unit, include the rental license control number in all advertising, and may not advertise more bedrooms than approved on building permit plans. Three documented calls for service (noise, overcrowding, disturbance of the peace, etc.) or citations at the property within 12 months triggers automatic suspension of the rental license for up to 30 days (Code Sec. 14-176).
Operating without a license: fine of not less than $500 nor more than $1,000 for each offense, with each day a violation occurs or continues counted as a separate offense. Violations of the rental housing article are municipal infractions (10-day written notice to correct before citation; each day a separate violation). The city manager may suspend a rental license up to 30 days, revoke it (no reapplication for 12 months after an upheld revocation), or levy a fine up to $1,000 per violation in lieu of suspension; a suspended or revoked unit cannot lawfully be rented.
⚠️ HOA/condo rules may prohibit STRs regardless of city law.
Getting legal in Ocean City: the playbook
Generated from this market's verified rules — each step traces to the sources at the bottom of this page.
- 1
Verify your zoning
Location rules apply: STR licenses are issued town-wide, including the R-1 Single Family Residential and MH Mobile Home districts. In R-1/MH, rental-housing occupancy is limited to 2 persons per bedroom plus 2 additional persons (excluding children 10 and younger) between midnight and 7:00 a.m. (Code Sec. 14-177); all other districts use a 40-sq-ft-of-floor-area-per-person standard. A moratorium on NEW STR licenses in R-1/MH (emergency moratorium approved Feb. 3, 2025, extended Dec. 1, 2025 through Jan. 3, 2027) was repealed by the Mayor and Council on Feb. 17, 2026 after a validated referendum petition, so new STR license applications in R-1/MH have resumed. A proposed replacement ordinance capping R-1/MH STR licenses at 10% of improved properties (about 375 licenses) was dropped by the council without action at its Feb. 10, 2026 work session. A 5-night minimum stay for R-1/MH (Ordinance 2025-04, escalating to 31 nights in 2027) was rejected by voters 834-800 in a July 22, 2025 referendum and never took effect. Confirm your parcel's zoning with the city before applying.
- 2
Check the covenant layer
HOA/condo rules may prohibit STRs regardless of city law.
- 3
Apply for the Rental License & Noise Control Permit plus Short-Term Rental License (Short-Term Rental Housing Unit additional fee)
Budget $246 (annual renewal). Per Resolution 2025-01 fee schedule: base rental license (condo unit, single-family home, timeshare, or rooming house) is $196.00 including the $25 Noise Control Permit; renting for 30 consecutive days or fewer requires the Short-Term Rental Housing Unit additional fee of $50.00, for a $246.00 total. Apartment buildings and hotels/motels pay $196 plus $8.00 per sleeping room. Licenses issued between December 1 and May 1 are half-year at half fee. Late charge of 10% after 15 days plus 2% every 30 days thereafter (Code Sec. 14-34). Apply through the city — the official application page is linked in the sources below.
- 4
Line up required insurance
No STR-specific insurance requirement identified in Town Code Chapter 14, Article V (Rental Housing) or on the rental license application.
- 5
Set up tax collection & remittance
Platforms don't collect everything here: Maryland state sales and use tax (6%), Worcester County room tax (hotel rental tax) (6%) are remitted by the host. Register with the taxing authority before your first booking and calendar the filing deadlines.
- 6
Calendar the renewal before you forget it
This permit renews annual (budget $246 again). Most cities take weeks to process renewals and don't send reminders — our Host plan emails you at 60/30/7 days out.
- 7
Know the cost of getting it wrong
Operating without a license: fine of not less than $500 nor more than $1,000 for each offense, with each day a violation occurs or continues counted as a separate offense. Violations of the rental housing article are municipal infractions (10-day written notice to correct before citation; each day a separate violation). The city manager may suspend a rental license up to 30 days, revoke it (no reapplication for 12 months after an upheld revocation), or levy a fine up to $1,000 per violation in lieu of suspension; a suspended or revoked unit cannot lawfully be rented. Enforced by the Division of Rental Housing (Planning & Community Development, Fire Marshal, and Finance). Applying for a license constitutes consent to inspection during reasonable hours for the entire license term; properties are inspected on a random five-year rotation (2025-2029). Owners must designate a contact legally authorized to accept service of process and able to respond to the property within 60 minutes, keep rental records for five years, display emergency contact info in the unit, include the rental license control number in all advertising, and may not advertise more bedrooms than approved on building permit plans. Three documented calls for service (noise, overcrowding, disturbance of the peace, etc.) or citations at the property within 12 months triggers automatic suspension of the rental license for up to 30 days (Code Sec. 14-176).
Recent rule changes in Ocean City
February 17, 2026critical
Mayor and Council repeal STR license moratorium in R-1/MH districts
After the Board of Supervisors of Elections validated 1,159 of 1,257 petition signatures (submitted Jan. 21, 2026) seeking a referendum, the Mayor and Council voted 6-0 to repeal Ordinance 2025-28 rather than face a ballot vote, allowing new short-term rental license applications to resume in the R-1 and MH districts. The city manager said no new STR regulations were proposed at the time.
Official source →January 1, 2026material
Worcester County room tax increases from 5% to 6%
The hotel rental tax on all short-term rentals (4 months or less) countywide, including Ocean City, rose from 5% to 6% effective January 1, 2026.
Official source →December 1, 2025material
Ordinance 2025-28 extends R-1/MH new-STR-license moratorium through Jan. 3, 2027
In December 2025 (exact adoption day not confirmed), the council extended the moratorium on issuing new short-term rental licenses in the R-1 and MH districts — originally in effect since January 2025 and set to expire in January 2026 — through January 3, 2027. It was repealed February 17, 2026.
Official source →July 22, 2025material
Voters reject Ordinance 2025-04 five-night minimum stay in referendum
Ordinance 2025-04 (passed March 2025) would have required 5-night minimum stays for STRs in R-1 and MH districts, escalating to 31 nights in 2027. A petition forced a special-election referendum; voters rejected the ordinance 834-800 on July 22, 2025, so no minimum-stay rule applies.
Official source →February 3, 2025material
Ordinance 2025-01 comprehensive rental housing / STR regulations adopted
Amended Chapter 14: owner must hold the license; 60-minute-response contact required; consent to inspections; 14-day application review; 5-year record keeping; license number required in all ads; no advertising more bedrooms than permitted; R-1/MH overnight occupancy capped at 2/bedroom plus 2 (midnight-7 a.m.); automatic 30-day license suspension after 3 calls for service in 12 months. Companion measures: Ordinance 2024-10 and 2024-27 created the Short-Term Rental Housing Unit definition and license category, and Resolution 2025-01 set fees at $196 base + $50 STR ($246 total).
Official source →February 3, 2025material
Emergency moratorium on new STR licenses in R-1/MH districts approved
On Feb. 3, 2025, the Mayor and Council approved an emergency moratorium (an 11-month pause) on issuing new short-term rental licenses in the R-1 and MH districts, originally set to expire Jan. 3, 2026; extended Dec. 1, 2025, then repealed Feb. 17, 2026.
Official source →January 1, 2025material
Moratorium on new STR licenses in R-1/MH districts takes effect
A moratorium on issuing new short-term rental licenses in the R-1 and MH districts went into effect in January 2025 (exact date/ordinance number not confirmed), originally set to end in January 2026; later extended, then repealed in February 2026.
Official source →
Frequently asked questions
›Is Airbnb legal in Ocean City?
Yes — Airbnb and other short-term rentals are legal in Ocean City, MD, but you must obtain a Rental License & Noise Control Permit plus Short-Term Rental License (Short-Term Rental Housing Unit additional fee) before operating. Always confirm current requirements with the city before operating.
›Do I need a permit for a short-term rental in Ocean City?
Yes. Ocean City requires a Rental License & Noise Control Permit plus Short-Term Rental License (Short-Term Rental Housing Unit additional fee) to operate a short-term rental, which costs $246 and must be renewed every year. Always confirm current requirements with the city before operating.
›How much does a Ocean City short-term rental permit cost?
The Rental License & Noise Control Permit plus Short-Term Rental License (Short-Term Rental Housing Unit additional fee) costs $246 (annual renewal). Per Resolution 2025-01 fee schedule: base rental license (condo unit, single-family home, timeshare, or rooming house) is $196.00 including the $25 Noise Control Permit; renting for 30 consecutive days or fewer requires the Short-Term Rental Housing Unit additional fee of $50.00, for a $246.00 total. Apartment buildings and hotels/motels pay $196 plus $8.00 per sleeping room. Licenses issued between December 1 and May 1 are half-year at half fee. Late charge of 10% after 15 days plus 2% every 30 days thereafter (Code Sec. 14-34).
›Can I Airbnb a non-primary residence in Ocean City?
Yes — Ocean City does not limit short-term rentals to primary residences. Zoning and other restrictions may still apply. Always confirm current requirements with the city before operating.
›What taxes do short-term rental hosts pay in Ocean City?
Hosts in Ocean City are subject to: Maryland state sales and use tax (6%), Worcester County room tax (hotel rental tax) (6%) — roughly 12% total on gross rental revenue. Platforms like Airbnb collect some of these automatically; check each line's collection method on this page.
›What happens if I operate a short-term rental illegally in Ocean City?
Operating without a license: fine of not less than $500 nor more than $1,000 for each offense, with each day a violation occurs or continues counted as a separate offense. Violations of the rental housing article are municipal infractions (10-day written notice to correct before citation; each day a separate violation). The city manager may suspend a rental license up to 30 days, revoke it (no reapplication for 12 months after an upheld revocation), or levy a fine up to $1,000 per violation in lieu of suspension; a suspended or revoked unit cannot lawfully be rented. Enforced by the Division of Rental Housing (Planning & Community Development, Fire Marshal, and Finance). Applying for a license constitutes consent to inspection during reasonable hours for the entire license term; properties are inspected on a random five-year rotation (2025-2029). Owners must designate a contact legally authorized to accept service of process and able to respond to the property within 60 minutes, keep rental records for five years, display emergency contact info in the unit, include the rental license control number in all advertising, and may not advertise more bedrooms than approved on building permit plans. Three documented calls for service (noise, overcrowding, disturbance of the peace, etc.) or citations at the property within 12 months triggers automatic suspension of the rental license for up to 30 days (Code Sec. 14-176).
Ocean City's STR rules changed 7 times recently.
Get an email the moment Ocean City changes its short-term rental rules — plus renewal reminders before your permit expires.
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Related
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Sources
- Town of Ocean City — Division of Rental Housing / Rental License Informationretrieved July 11, 2026
- Town of Ocean City — Ordinance 2025-01 (Short-Term Rental Housing Regulations, amending Chapter 14)retrieved July 11, 2026
- Town of Ocean City — Rental License & Noise Control Permit Application (2026-04-30 full-year)retrieved July 11, 2026
- Town of Ocean City — Finance Department, Rental & Business Licensesretrieved July 11, 2026
- Worcester County Treasurer — Room Tax (6% effective January 1, 2026)retrieved July 11, 2026
- Airbnb Help — Occupancy tax collection and remittance by Airbnb in Marylandretrieved July 11, 2026
- Avalara MyLodgeTax — Ocean City, Maryland, ends short-term rental moratorium in residential districts (March 2026)retrieved July 11, 2026
- WMDT 47abc — Ocean City residents vote on controversial short-term rental ordinance (July 22, 2025 referendum)retrieved July 11, 2026
This page is informational only and is not legal, tax, or financial advice. Rules change and enforcement varies — verify current requirements with Ocean City and a qualified professional before operating.