This guide covers Folly Beach, SC only. Neighboring markets often confused with Folly Beach include:
- Isle of Palms: Separate city with its own STR caps and licensing rules.
- Sullivan’s Island: Distinct municipality with highly restrictive STR policies.
- Charleston: Includes both the City of Charleston and unincorporated areas, each with different STR rules.
- James Island: Mix of incorporated and unincorporated areas, often confused with Folly Beach for STR regulation.
Legality Verdict
Short-term rentals are legal in Folly Beach, but strictly capped at 800 licenses, with a waitlist for new investor permits. The city actively enforces its ordinance, and compliance costs are significant due to layered taxes and fees.
- Legality Status: 4/5
- License Availability: 2/5
- Compliance Cost (% revenue): 3/5
- Regulatory Stability: 2/5
- Enforcement Climate: 3/5
TL;DR
Folly Beach defines STRs as rentals of 29 days or less and requires both a business license and a rental registration permit, starting at $245 plus income-based fees. The total lodging tax stack is at least 13%. The city enforces a hard cap of 800 STR licenses, which is currently maxed out, creating a waitlist for new investor licenses. The biggest gotcha: licenses are not transferable on sale, and new investors face significant entry barriers due to the cap and waitlist.
Quick Facts
| Item | Detail |
|---|---|
| STR Definition | Rental of a dwelling unit for 29 days or less City of Folly Beach |
| Registration Required | Yes — business license and rental registration permit Folly Beach Code of Ordinances |
| Permit Cost | $245 for first $2,000 income, plus $2.75 per additional $1,000; registration permit: $17.50 per $1,000 income City of Folly Beach |
| Annual Renewal | Yes — business license renews by April 30, registration by June 1 City of Folly Beach |
| License Cap | Yes — 800 total STR licenses, currently maxed out Live5News |
| Transferability | Not transferable on sale; only heirs/medical hardship exceptions City of Folly Beach |
| State Sales Tax | 5% SC Dept. of Revenue |
| State Accommodations Tax | 2% SC Dept. of Revenue |
| County Accommodations Tax | 2% Charleston County |
| Municipal Accommodations Fee | 1% Airbnb Help Center |
| Beach Preservation Fee | 1% Airbnb Help Center |
| Total Effective Lodging Tax | 6% (accommodations-specific taxes) Airbnb Help Center |
| Total Tax Burden (all taxes) | At least 13% (includes sales tax and local options) SC Dept. of Revenue |
| Minimum Rental Activity | 28 nights/year required to maintain license City of Folly Beach |
| Local Contact Requirement | Yes — owner or local agent info must be filed Folly Beach Code of Ordinances |
| Parking Requirement | One off-street space per bedroom Folly Beach Code of Ordinances |
| Insurance Requirement | $1M commercial general liability policy required (state law) Home Team Luxury Rentals |
| Enforcement Penalties | Warnings, fines, suspensions, or revocation for violations Island House Real Estate |
| Primary Regulator | City of Folly Beach Business License Office, 21 Center St, (843) 588-2447 City of Folly Beach |
| Last Updated | June 11, 2026 |
Regulatory Impact Snapshot
Underwriters should model compliance costs at 16.2% of gross revenue, with median Folly Beach, SC STRs earning $86,899 at an average daily rate of $486 and 60% occupancy. The binding constraint is the 800-license cap, which is fully allocated, creating a waitlist for new investor licenses. Permit and registration fees are income-based and add up quickly, while the total tax stack (including sales and accommodations taxes) is among the highest in the region. Investors must factor in the risk of non-transferability and the possibility of future ordinance changes. Run this market in our Airbnb Calculator →
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Frequently Asked Questions
Basics
What is considered a short-term rental in Folly Beach?
A short-term rental is any dwelling unit rented for 29 days or less City of Folly Beach.
Are STRs legal in Folly Beach?
Yes, STRs are legal but strictly regulated and capped at 800 licenses Live5News.
Does the city allow new STR licenses?
New licenses are only available if the cap drops below 800; currently, there is a waitlist Live5News.
Licensing
What licenses are required to operate an STR?
You need both a business license and a rental registration permit Folly Beach Code of Ordinances.
How much does it cost to get licensed?
The business license starts at $245 for the first $2,000 income, plus $2.75 per additional $1,000; registration is $17.50 per $1,000 income City of Folly Beach.
Are licenses transferable if I sell my property?
No, STR licenses are not transferable except to heirs or in medical hardship cases City of Folly Beach.
Is there a minimum rental requirement?
Yes, you must rent at least 28 nights per year to keep your license City of Folly Beach.
Taxes
What taxes apply to STRs in Folly Beach?
STRs are subject to 5% state sales tax, 2% state accommodations tax, 2% county accommodations fee, 1% municipal accommodations fee, and 1% beach preservation fee SC Dept. of Revenue.
What is the total effective lodging tax?
The total accommodations-specific lodging tax is 6% Airbnb Help Center.
Does Airbnb collect and remit taxes?
Airbnb collects and remits all required state and local taxes for Folly Beach bookings Airbnb Help Center.
Do I need a South Carolina Retail License?
Yes, a retail license is required for each STR location SC Dept. of Revenue.
Operations
Is a local contact required?
Yes, you must provide the city with the name and contact info of a local agent or owner Folly Beach Code of Ordinances.
What are the parking requirements?
One off-street parking space per bedroom is required Folly Beach Code of Ordinances.
Are there insurance requirements?
Yes, state law requires a $1 million commercial general liability policy Home Team Luxury Rentals.
Can I rent individual rooms separately?
No, renting or advertising individual rooms under separate contracts is prohibited Folly Beach Code of Ordinances.
Enforcement
How does the city enforce STR rules?
Folly Beach investigates complaints and can issue warnings, fines, suspensions, or revoke permits Island House Real Estate.
What are the penalties for violations?
Penalties include fines, suspension, or revocation of your STR license Island House Real Estate.
Are noise ordinances enforced for STRs?
Yes, noise and party violations are strictly enforced, especially at night LocatingCHS.
Is the STR ordinance changing soon?
The city is reviewing its STR ordinance and may amend rules, but no final changes have been adopted as of June 2026 Live5News.
Permit Process
Folly Beach requires both a business license and a rental registration permit for any STR. The business license starts at $245 for the first $2,000 of income, with additional fees for higher earnings. The registration permit costs $17.50 per $1,000 of reported income. Licenses must be renewed annually, with business license renewals due by April 30 and registration by June 1. Only property owners—not lessees—can hold STR licenses, and licenses are not transferable except to heirs or in cases of medical hardship City of Folly Beach.
Zoning
Folly Beach enforces a citywide cap of 800 STR licenses, which is currently maxed out. STRs are only allowed in properties within city limits, and each must provide one off-street parking space per bedroom. A local agent or owner contact must be registered with the city. Renting individual rooms under separate contracts is prohibited. Events at STR properties must comply with city code requirements Folly Beach Code of Ordinances.
Taxes and Remittance
STRs in Folly Beach are subject to a 5% state sales tax, 2% state accommodations tax, 2% county accommodations fee, 1% municipal accommodations fee, and 1% beach preservation fee. The total tax burden, including all applicable sales and accommodations taxes, is at least 13%. Airbnb collects and remits all required taxes, but hosts using other platforms or direct bookings must ensure compliance and register with the South Carolina Department of Revenue SC Dept. of Revenue.
Enforcement and Recent Actions
Folly Beach actively enforces its STR ordinance. Verified complaints can result in warnings, fines, suspensions, or revocation of permits. Noise ordinances are strictly enforced, and hosts are responsible for guest compliance. In December 2025, the city clarified that property renovations would not jeopardize STR permits if occupancy certificates and inspections are maintained Post and Courier.
Recent Changes and Pending Legislation
As of June 2026, Folly Beach is reviewing its STR ordinance, including the 800-license cap and enforcement mechanisms. The city is gathering public input and conducting an independent study, but no final changes have been adopted. At the state level, South Carolina has not enacted STR preemption, so local ordinances remain in effect South Carolina Legislature.
Comparable Markets
- Isle of Palms, SC — Consider if you want a nearby market with its own cap and stricter enforcement.
- Charleston, SC — Consider for a larger, more diverse STR market with different zoning.
- Sullivan’s Island, SC — Consider if you want a highly restrictive, low-density alternative.
Sources
- City of Folly Beach Official Website: https://cityoffollybeach.com/short-term-rental
- Folly Beach Code of Ordinances: https://codelibrary.amlegal.com/codes/follybeach/latest/follyb_sc/0-0-0-38192
- Folly Beach Code of Ordinances § 117.04: https://codelibrary.amlegal.com/codes/follybeach/latest/follyb_sc/0-0-0-38315
- City of Folly Beach Business Licenses Page: https://cityoffollybeach.com/fb-business-licences
- South Carolina Department of Revenue: https://dor.sc.gov/tax/accommodations
- Charleston County Government: https://www.charlestoncounty.gov/departments/revenue-collections/local-accommodations-tax-application.php
- Live5News: https://www.live5news.com/2024/02/20/second-reading-folly-beach-short-term-rental-ordinance-lead-new-changes/
- Live5News: https://www.live5news.com/2026/05/28/folly-beach-seeks-public-input-changes-short-term-rental-ordinance/
- Post and Courier: https://www.postandcourier.com/business/real_estate/folly-beach-short-term-rental-changes-cost/article_ba51d04a-cdc0-43c7-8c2a-2c4633ca278a.html
- Post and Courier: https://www.postandcourier.com/business/real_estate/folly-beach-short-term-rental-review/article_d5f2d6e8-ced5-4d86-8715-75d2cd7c9b93.html
- Airbnb Help Center: https://www.airbnb.com/help/article/2328
- Home Team Luxury Rentals: https://hometeamluxuryrentals.com/blog/south-carolina-airbnb-laws
- Island House Real Estate: https://islandhouserealestate.com/blog/folly-beach-short-term-rental-rules-explained
- LocatingCHS: https://www.locatingchs.com/blog/folly-beach-airbnb-rules-explained
- South Carolina Legislature Online: https://www.scstatehouse.gov/sess126_2025-2026/bills/442.htm
This page is research, not legal advice. Consult local counsel before acquiring or operating a short-term rental in City of Folly Beach, Charleston County, South Carolina.
Ready to evaluate Folly Beach as an STR market?
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