Maryland Short-Term Rental Regulations and Laws: What Investors Should Know

By: Elliott Caldwell | Nov 5, 2025

Step-by-Step Licensing Requirements in Maryland

Operating a legal short-term rental in Maryland starts with securing the right licenses and documentation. Here’s the process every host should follow:

1. Check zoning and eligibility.
   Confirm that your property lies within a zoning district that permits short-term rentals. Many residential (R-1) zones prohibit non-owner-occupied listings.
   
   
2. Apply for a Maryland short-term rental license.
   Submit your application to the Maryland Short-Term Rental Commission. You’ll provide proof of ownership, photo ID, and payment (typically around $100 annually).
   
   
3. Obtain local permits.
   Depending on your city or county, additional permits or occupancy certificates may be required. For example, Baltimore City requires a Rental Unit License from the Department of Housing & Community Development.
   
   
4. Schedule safety inspections.
   Install smoke detectors, carbon monoxide alarms, and fire extinguishers in accessible areas. Many local authorities require physical inspection before approval.
   
   
5. Secure liability insurance.
   Hosts must maintain at least $1 million in coverage, which protects against guest injuries or property damage. Some platforms like Airbnb offer basic coverage, but Maryland law still expects owners to carry their own policy.
   
   
6. Register for taxes.
   File with the Comptroller of Maryland for state sales tax (6%) and ensure compliance with any additional county or city occupancy taxes.
   
   
7. Display your license number publicly.
   Maryland requires that your rental license appear clearly in every listing description, advertisement, or booking platform profile.
   
   

Each of these steps represents a potential compliance risk if handled incorrectly—but also a clear path to secure, profitable hosting when done right.

Home Team Luxury Rentals simplifies this process for property owners by managing every aspect of compliance—from licensing and inspection scheduling to automated tax remittance. Our systems ensure your property stays fully legal while delivering a luxury experience to every guest.

Local Regulations by City and County

While Maryland’s state framework sets the foundation, local governments determine how short-term rentals actually operate. Each city and county has its own rules governing licensing, taxes, and zoning restrictions—making it essential for hosts to tailor their approach to where their property is located.

Below is a snapshot of the most active short-term rental markets and their local requirements:

Each of these jurisdictions enforces different combinations of taxes, safety codes, and licensing rules—meaning what’s legal in Ocean City may not be legal in Baltimore.

Home Team Luxury Rentals manages properties across multiple Maryland jurisdictions. Our compliance specialists handle everything—from verifying zoning maps to renewing county-level STR licenses—so investors can focus on revenue, not regulations.

Maryland STR Taxes and Financial Compliance

Taxes play a central role in Maryland short-term rental regulations. All hosts must collect and remit state and local occupancy taxes, which support tourism infrastructure and community programs.

Here’s what every host should know:

• State Sales Tax: 6% applied to all short-term rental bookings.
  
• Local Occupancy Taxes: Range from 2% to 8% depending on jurisdiction (e.g., 4.5% in Montgomery County, 5% in Baltimore City).
  
• Income Tax Reporting: Rental income must be reported annually as business income to the Maryland Comptroller.
  
• Platform Withholding: Major platforms like Airbnb and Vrbo may automatically collect state-level taxes—but hosts are still responsible for local filings and documentation.
  
• Record Keeping: Hosts must retain receipts and transaction records for at least three years in case of audit.
  
  

To stay compliant and audit-ready, property owners should:

• Register with the Comptroller of Maryland to receive a tax ID.
  
• File returns quarterly or monthly based on volume.
  
• Maintain separate business accounts for STR income and expenses.
  
• Document all deductible expenses (repairs, cleaning, insurance, supplies, and depreciation).
  
  

At Home Team Luxury Rentals, our accounting team automates tax collection and submission for every booking—ensuring owners never miss a deadline or incur penalties. We provide full transparency through our owner dashboard, which tracks performance, occupancy, and net income after taxes.

Zoning, Insurance, and Housing Considerations

Zoning and insurance compliance form the backbone of legal hosting in Maryland. These requirements determine where you can operate—and how protected your property and guests are.

Zoning Laws

Maryland municipalities categorize properties under zoning districts such as R-1 (single-family residential), R-2 (multi-family), and C-1 (commercial).

• In R-1 zones, short-term rentals are typically limited to primary residences.
  
• R-2 and C-1 zones may allow non-owner-occupied rentals with proper licensing.
  
• Some cities, including Ocean City, have seasonal restrictions or density caps to limit STR saturation in residential neighborhoods.
  
  

Before listing, verify your property’s zoning classification through the local planning department—or allow Home Team Luxury Rentals to handle verification and permitting on your behalf.

Insurance Requirements

Statewide law requires hosts to maintain a minimum of $1 million in liability coverage. This protects against injury, theft, or property damage claims that may not be covered under standard homeowners’ insurance.

Many owners mistakenly assume that Airbnb’s Host Guarantee satisfies this requirement—it does not. Maryland expects proof of independent liability insurance.

Housing Standards

All short-term rental units must meet habitability and safety standards, including:

• Functional smoke and carbon monoxide detectors
  
• Adequate ventilation and egress windows
  
• Clean, pest-free living conditions
  
• Onsite emergency contact information
  
  

Routine inspections are common, especially in Baltimore, Annapolis, and Gaithersburg. Non-compliance can result in license suspension or fines of up to $1,000 per day.

Home Team Luxury Rentals manages inspection readiness for every home we operate, coordinating directly with local code officials. We ensure your property not only passes inspection—but exceeds guest safety expectations.

Maryland STR Compliance Checklist

A successful hosting operation in Maryland depends on complete regulatory compliance. Use this quick reference checklist to make sure your property meets every requirement before you begin accepting guests:

Maryland Short-Term Rental Compliance Checklist

• Maryland short-term rental license (renew annually through the Maryland Short-Term Rental Commission)
• Local city or county permit (confirm zoning and HOA eligibility)
• Proof of liability insurance of at least $1 million
• Smoke and carbon monoxide detectors in every rental unit
• Fire extinguisher in accessible common areas
• Displayed license number on all online listings
• State and local tax registration for occupancy and sales tax
• Accurate recordkeeping for at least three years

Failure to meet any of these standards can result in fines, suspension, or permanent loss of your short-term rental license.

FAQs: Maryland Short-Term Rental Regulations

Do I need a license for Airbnb in Maryland?

Yes. All hosts must obtain a valid Maryland short-term rental license before advertising or accepting bookings. Most cities—including Baltimore and Ocean City—require an additional local registration. Home Team Luxury Rentals manages both state and municipal applications on your behalf.

What are the short-term rental tax rates in Maryland?

Hosts must collect 6% state sales tax plus local occupancy taxes ranging from 2% to 8%. Platforms like Airbnb may collect state tax automatically, but local taxes are still the host’s responsibility.

Can I rent out a second home or vacation property?

In some counties—such as Anne Arundel or Montgomery—non-owner-occupied rentals are permitted with proper zoning and licensing. Others, like Baltimore City, restrict STRs to primary residences only. Our compliance team reviews each location to ensure your property is eligible.

How much insurance coverage do I need?

Maryland requires a minimum of $1 million in liability insurance. This must be separate from any coverage offered by hosting platforms. Home Team Luxury Rentals partners with specialty insurers that meet state compliance standards.

Are short-term rentals allowed in Ocean City, MD?

Yes, but restrictions apply. Ocean City enforces seasonal limits and requires registration through the city’s Department of Planning and Community Development. Certain residential districts prohibit STRs during peak summer months to reduce congestion.

Why Partner with Home Team Luxury Rentals

Regulatory compliance is just one part of running a profitable short-term rental. At Home Team Luxury Rentals, we help investors go beyond the basics—building a truly turnkey, luxury hosting experience that performs across every metric.

Our services include:

• Full-service property management for short-term and vacation rentals statewide
  
  
• Dynamic pricing powered by market data and seasonality trends
  
  
• Custom guest experiences and 24/7 local support
  
  
• Maintenance coordination and compliance inspections
  
  
• Owner dashboards with transparent performance reporting
  
  

By combining technology, hospitality, and legal expertise, we make it effortless for property owners to stay compliant while delivering a premium guest experience.

Home Team Luxury Rentals is more than a management company—we’re your trusted partner for building profitable, fully compliant short-term rentals in Maryland and beyond.

Bottom Line

Maryland short-term rental regulations can feel overwhelming at first glance, but with the right systems and guidance, compliance becomes a competitive advantage. Property owners who stay ahead of licensing, taxes, and safety requirements not only avoid penalties—they position their homes for higher trust, better reviews, and repeat bookings.

Home Team Luxury Rentals helps investors and homeowners unlock that potential, transforming legal complexity into effortless, revenue-driven property ownership.