Legality Verdict
Short-term rentals are legal in Ocean City, MD, but new licenses are paused in R-1 and MH districts through at least 2027. Citywide, STRs require annual licensing, a local agent, and compliance with a 12% tax stack.
- Legality Status: 2/5
- License Availability: 2/5
- Compliance Cost (% revenue): 3/5
- Regulatory Stability: 2/5
- Enforcement Climate: 3/5
TL;DR
Ocean City defines STRs as rentals of 30 days or fewer. All STRs require an annual city rental license ($141–$191) plus a $50 short-term supplement and a noise permit. The total lodging tax is 12% (6% state, 6% county). New STR licenses are paused in R-1 and MH zones; existing licenses may renew. The biggest gotcha: moratoriums block new STRs in key residential areas through at least 2027.
Quick Facts
| Item | Detail |
|---|---|
| STR Definition | 30 days or fewer Shore4U |
| Registration Required | Yes Town of Ocean City |
| Permit Cost | $141 (standard) or $191 (R-1 zone) + $50 STR supplement + $25 noise permit Airbnb Help Center |
| Annual Renewal | Yes, annual Airbnb Help Center |
| Late Penalty | Not codified — enforcement may include suspension, revocation, or fines Shore4U |
| State Sales Tax | 6% LegalClarity |
| County Hotel/Room Tax | 6% (Worcester County, effective Jan 1, 2026) Worcester County |
| Total Effective Lodging Tax | 12% (state + county) WMDT |
| Occupancy Cap | 2 persons/bedroom + 2 extra (R-1/MH); children under 10 not counted Shore4U |
| Parking Requirement | Not codified — no STR-specific rule in city code Division of Rental Housing |
| Local Contact Requirement | Yes, must respond within 60 minutes Central Reservations |
| Inspection Requirement | Yes, randomized 5-year rotation Shore4U |
| License Cap | Not codified — but new STR licenses paused in R-1/MH Avalara |
| Permitted Zones | All except new licenses in R-1/MH (moratorium) Avalara |
| Prohibited Zones | New STR licenses paused in R-1/MH Avalara |
| HOA/Condo Override | Not codified — private covenants may restrict Division of Rental Housing |
| Transferability | Not allowed; new owner must reapply Shore4U |
| Enforcement Penalties | Suspension, revocation, fines up to $1,000/violation Proper Insurance |
| Primary Regulator | Town of Ocean City Licensing Dept. Town of Ocean City |
| Last Updated | June 11, 2026 |
Regulatory Impact Snapshot
Ocean City’s STR regime requires an annual rental license ($141–$191), a $50 STR supplement, and a $25 noise permit. The 12% lodging tax (6% state, 6% county) applies to all bookings. Inspections occur on a five-year rotation, and a local agent must be available within 60 minutes. The binding constraint is the moratorium on new STR licenses in R-1 and MH districts, sharply limiting new supply in residential neighborhoods. Underwriters should model compliance costs at 8.1% of gross revenue, with median Ocean City, MD STRs earning $36,145 at an average daily rate of $318 and 26% occupancy.
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Frequently Asked Questions
Basics
What is considered a short-term rental in Ocean City, MD?
A short-term rental is defined as a property rented for 30 consecutive days or fewer Shore4U.
Are short-term rentals legal in Ocean City?
Yes, but new STR licenses are paused in R-1 and MH districts through at least 2027 Avalara.
Does Ocean City have a cap on the number of STRs?
No town-wide cap is codified, but new licenses are paused in R-1 and MH zones Avalara.
Licensing
What licenses are required to operate an STR?
You need an annual rental license, a $50 STR supplement, and a noise permit Town of Ocean City.
How much does it cost to get licensed?
$141 (standard) or $191 (R-1 zone) plus $50 STR supplement and $25 noise permit Airbnb Help Center.
Is annual renewal required?
Yes, all STR licenses must be renewed annually Airbnb Help Center.
Can STR licenses be transferred to new owners?
No, licenses are not transferable; buyers must apply for a new license Shore4U.
Taxes
What taxes apply to STRs in Ocean City?
A 6% Maryland state sales tax and a 6% Worcester County hotel rental tax apply, totaling 12% WMDT.
Does Ocean City charge its own lodging tax?
No, only state and county lodging taxes apply Worcester County.
Do I need to register for a tax account?
Yes, hosts must register for a Maryland sales and use tax account LegalClarity.
Does Airbnb collect and remit taxes?
Airbnb collects and remits both the state and county taxes for Ocean City bookings Airbnb Help Center.
Operations
Is a local contact required?
Yes, a local agent or manager must be able to respond within 60 minutes Central Reservations.
Are inspections required?
Yes, inspections occur on a randomized five-year rotation Shore4U.
Are there occupancy limits?
Yes, in R-1 and MH districts: two persons per bedroom plus two extra; children under 10 not counted Shore4U.
Is owner-occupancy required?
No, there is no primary residence requirement Shore4U.
Are there parking requirements for STRs?
No STR-specific parking rule is codified; general building code may apply Division of Rental Housing.
Enforcement
What are the penalties for violations?
Penalties include suspension, revocation, and fines up to $1,000 per violation Proper Insurance.
How is enforcement triggered?
Three documented incidents in 12 months can trigger a 30-day suspension Shore4U.
Are platforms required to verify licenses?
Yes, platforms must verify a valid Town rental license before listing Shore4U.
Is there active rulemaking or pending changes?
Yes, further changes to R-1/MH STR rules are under consideration for 2026–2027 Coastal REALTORS®.
Permit Process
All Ocean City STRs require an annual rental license, a $50 short-term supplement, and a noise permit. The standard fee is $141, or $191 in R-1 zones, plus $25 for the noise permit. Licenses must be renewed annually, and are not transferable to new owners Airbnb Help Center.
A local agent or property manager must be designated and able to respond to issues within 60 minutes. Inspections are required on a randomized five-year rotation, coordinated by the Fire Marshal or Division of Rental Housing depending on property type Shore4U.
Zoning
STRs are defined as rentals of 30 days or fewer. New STR licenses are paused in R-1 and MH districts through at least 2027, but existing licenses may renew. No owner-occupancy or density requirements are codified. Occupancy in R-1/MH is capped at two persons per bedroom plus two extra; children under 10 are not counted Shore4U.
No STR-specific parking requirements are codified, and HOA/condo restrictions are set privately, not by city ordinance Division of Rental Housing.
Taxes and Remittance
Ocean City STRs are subject to a 6% Maryland state sales tax and a 6% Worcester County hotel rental tax, totaling 12%. No separate city lodging tax applies. Hosts must register for a Maryland sales and use tax account. Airbnb collects and remits both taxes for bookings on its platform LegalClarity.
Enforcement and Recent Actions
Ocean City enforces STR rules through license suspension, revocation, and fines up to $1,000 per violation. Three documented incidents in 12 months can trigger a 30-day suspension. Platforms must verify valid licenses before listing properties. Enforcement is a mix of complaint-driven and ordinance-based actions Proper Insurance.
Recent Changes and Pending Legislation
A moratorium on new STR licenses in R-1 and MH districts was enacted in 2025 and extended through at least 2027. A proposed five-night minimum stay was rejected by voters in July 2025. The Mayor and Council are considering further changes, including a seven-day minimum, a license freeze, or a lottery system for R-1/MH Coastal REALTORS®.
Comparable Markets
- Rehoboth Beach, DE — Consider if you want a nearby beach market with strict caps and high demand.
- Virginia Beach, VA — Consider for a larger city with evolving STR rules and strong summer demand.
- Bethany Beach, DE — Consider for a smaller, highly seasonal Delaware market with HOA overlays.
Sources
- Town of Ocean City, MD – Official Government and Visitor Information: https://oceancitymd.gov/oc/departments/finance/new-licenses/
- Division of Rental Housing – Town of Ocean City, MD: https://oceancitymd.gov/oc/departments/planning-community-development/division-of-rental-housing/
- Worcester County Government: https://www.co.worcester.md.us/news/newly-adopted-room-tax-rate-60-effective-january-1-2026
- Worcester County Government: https://www.co.worcester.md.us/departments/treasurer/room
- Airbnb Help Center: https://www.airbnb.com/help/article/3258
- Airbnb Help Center: https://www.airbnb.com/help/article/2309
- LegalClarity: https://legalclarity.org/maryland-hotel-tax-criteria-rates-and-compliance-rules/
- WMDT 47abc: https://www.wmdt.com/2025/11/worcester-county-will-see-an-increase-in-hotel-room-tax-rate-from-5-to-6/
- Shore4U Real Estate: https://shore4u.com/blog/short-term-rental-rules-for-ocean-city-condos-and-homes
- Central Reservations: https://centraloc.com/ocean-city-md-rental-license-2026-guidelines-updates/
- Avalara MyLodgeTax: https://www.avalara.com/mylodgetax/en/blog/2025/12/ocean-city-maryland-halts-new-short-term-rental-permits-in-residential-zones-for-another-year.html
- Proper Insurance: https://www.proper.insure/regulations/maryland-airbnb-laws/
- CBS Baltimore: https://www.cbsnews.com/baltimore/news/ocean-city-maryland-short-term-rental-housing-vacation/
- Coastal Association of REALTORS®: https://www.coastalrealtors.org/2025/01/19/ocmd-vote/
This page is research, not legal advice. Consult local counsel before acquiring or operating a short-term rental in Town of Ocean City, Worcester County, Maryland.
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