This is one of the most common questions I get from second-home buyers, investors, and people relocating who want a little rental income to help carry the mortgage. And the honest answer is the one nobody loves: it depends entirely on which "Charleston" you mean.
The Charleston area is not one rulebook. It's more than a dozen. The City of Charleston, Mount Pleasant, North Charleston, Folly Beach, Isle of Palms, Sullivan's Island, Summerville, unincorporated Charleston County, and the gated island communities all set their own short-term rental rules — and then your HOA may add another layer on top.
And right now, one of those rulebooks is actively being rewritten in court. Here's where things stand.
First, what counts as a "short-term rental"
Generally, a short-term rental (STR) is a rental of fewer than 30 consecutive days — the Airbnb and Vrbo model. Rentals of 30 days or longer are typically treated as regular residential leases, which is why mid-term rentals have become a popular workaround (more on that below).
City of Charleston: yes, but only if you live there
This covers the peninsula, West Ashley, James Island, Johns Island, Daniel Island, and Cainhoy — the parts inside city limits.
The City of Charleston's core rule is simple and strict: residential short-term rentals are allowed only in owner-occupied homes.
- You must live in the home as your primary residence. The city verifies this using your property tax status — specifically, whether the home is assessed at the 4% owner-occupied legal residence ratio. No 4%, no permit.
- A full-time resident has to sleep there each night guests are staying.
- Occupancy is capped at four adults.
- One STR unit per property. A carriage house, accessory dwelling, or one side of a duplex can qualify as long as you live in the main house or the other unit.
- Permits are renewed annually and are not transferable to a new owner.
- Whole-house investor rentals are prohibited in residential areas. The narrow exception is certain commercially zoned properties inside the downtown short-term rental overlay district — and those command a steep premium.
The practical takeaway: if you're buying a house in West Ashley or on James Island as a pure Airbnb investment, the City of Charleston will not permit it. That surprises a lot of out-of-town buyers who assume a tourist market means tourist rentals are easy.
Folly Beach: in flux — do not buy on assumptions right now
This is the one making news.
In February 2023, Folly Beach voters approved a referendum capping investor short-term rental licenses at 800, while allowing unlimited licenses for owner-occupied STRs. The margin was narrow — about 78 votes.
On August 14, 2026, Circuit Judge Thomas J. Rode struck down both the 800-license cap and the city's rental registration permit fee. The court found that the cap was improperly adopted by referendum because South Carolina doesn't allow voters to enact tax-related ordinances that way, and that the permit fee — calculated on gross rental revenue — was effectively an unlawful tax.
Here's the part that often gets lost in the headlines: the city has stressed that the ruling did not decide whether Folly Beach can cap short-term rentals. It decided how the cap was adopted.
What's happened since:
- The city voted to appeal, and an automatic stay kept existing rules in place in the meantime.
- On August 26, council voted 4–1 for a temporary moratorium on issuing new short-term rental licenses. It pauses new applications until an outside regulatory study is complete, or until the freeze expires in 2027. It includes exemptions — renewals, applicants already offered a license off the waitlist, 72-day rental licenses, and a group of applications filed right after the ruling, among others.
- On September 15, council passed second reading of a rewrite of the short-term rental ordinance, which the mayor described as creating a stable framework while the city waits for the study results.
What this means if you're buying on Folly: do not purchase a Folly Beach property on the assumption that you'll be able to get a new investor STR license. That may change — in either direction — as the appeal and study play out. If rental income is essential to your purchase, focus on properties that already hold a valid license and confirm, through your attorney, exactly what happens to that license at transfer under the current ordinance.
Mount Pleasant: capped, with a waitlist
Mount Pleasant runs its own STR ordinance with a cap of roughly 400 permits and a waiting list, split into part-time and full-time rental categories. Short-term rentals are prohibited in the Old Village. If you're buying in Mount Pleasant expecting to rent short-term, assume you'll be on a waitlist until you confirm otherwise with the town.
North Charleston: capped by council district
North Charleston limits STR permits by council district — reportedly 60 per district — and some of the most in-demand districts are frequently at capacity. Park Circle, where I live, is exactly the kind of neighborhood where that cap bites. Check availability in the specific district before you buy.
Isle of Palms: the most STR-friendly island
Isle of Palms has long supported vacation rentals, with no permit cap and whole-home and condo rentals allowed, subject to registration and business licensing. The catch is often private rather than municipal: in communities like Wild Dunes, HOA and regime rules can restrict rentals as much as — or more than — the town does.
Sullivan's Island: effectively closed
Sullivan's Island generally prohibits rentals under 30 nights, with exceptions for grandfathered properties. If you're buying on Sullivan's for rental income, plan on long-term or 30-plus-day rentals.
Unincorporated Charleston County
Some areas of West Ashley and James Island, and most of Johns Island, are outside city limits and fall under Charleston County's rules instead. The county uses three categories:
- Limited Home Rental — short-term rental of your primary residence, up to 72 days per calendar year
- Extended Home Rental — short-term rental of an investment property, up to 144 days per year, requiring a special exception from county zoning
- Commercial Guest House — for commercially zoned districts
Because city and county lines interweave on James Island and Johns Island, two homes a few hundred yards apart can be under completely different rules. Confirm the jurisdiction on the specific parcel, not the mailing address.
Summerville, Kiawah, and Seabrook
Summerville generally requires owner occupancy for residential STRs along with special exception approval — which limits most investor strategies.
Kiawah and Seabrook allow short-term rentals, but they're regulated through both the town and the property owners' association, with additional requirements around permits, local contacts, parking, and minimum stays.
The layers most buyers forget
Your HOA. Even where the municipality allows STRs, covenants can prohibit them or impose minimum lease terms. Get the HOA documents during your due diligence period and read the rental restrictions specifically.
Taxes. Short-term rental income in Charleston carries layers of state, county, and local accommodations taxes on top of income tax. One industry guide estimates the combined burden inside the City of Charleston at around 14% of gross revenue — verify for your specific jurisdiction.
Property taxes. An investment property is assessed at South Carolina's 6% ratio rather than the 4% owner-occupied ratio, and it doesn't get the school operating millage exemption primary residences receive. That can materially change your cash flow. I covered how that works in my article on why your Charleston property tax bill can be higher than the previous owner's.
Insurance. Many standard homeowners policies don't cover short-term rental activity. You may need a landlord or STR-specific policy — and in coastal Charleston, that's not a small line item.
The alternative more Charleston investors are using: mid-term rentals
Because so many Charleston-area jurisdictions restrict true short-term rentals, a lot of investors have shifted to furnished rentals of 30 days or more. Those generally fall outside STR ordinances, and Charleston has steady demand from traveling medical professionals at MUSC and the region's other hospital systems, corporate and contract workers tied to Boeing and the port, military personnel on temporary duty at Joint Base Charleston, and families relocating who need a landing spot while they house-hunt.
Mid-term rentals are still subject to HOA rules, lease law, and taxes — and returns are typically lower than a fully booked vacation rental — but they're often a legal path where STRs aren't.
How to protect yourself as a buyer
If short-term rental income is part of why you're buying:
- Confirm the jurisdiction for the exact parcel — city, town, or unincorporated county.
- Confirm permit availability — caps, waitlists, and moratoriums — directly with that jurisdiction.
- Confirm whether an existing permit transfers. In the City of Charleston it does not.
- Read the HOA covenants for rental restrictions before your due diligence period ends.
- Don't underwrite off a seller's rental revenue projections. Their numbers may reflect a permit you can't get.
- Get your insurance quote for STR use, not standard homeowner use.
Everything above can be checked during South Carolina's due diligence period, before you're committed. That's exactly what that period is for.
Numbers and rules to verify before you rely on them
Short-term rental rules change often, and several figures here come from secondary sources:
- Folly Beach is actively changing. The appeal, moratorium, ordinance rewrite, and study could all shift the rules in the coming months. Check with the city before any decision.
- Mount Pleasant's roughly 400-permit cap and North Charleston's per-district limits come from secondary sources — confirm current numbers and waitlist status with each municipality.
- City of Charleston permit fees have been reported around $345 for an application — confirm on the city's Livability and Tourism permit page.
- The ~14% tax estimate is from an industry source and varies by location and platform collection.
- Sullivan's Island grandfathering and Isle of Palms registration requirements should be confirmed with each town.
I'm a Realtor, not an attorney. For anything involving permit transfers or ordinance interpretation, involve a South Carolina real estate attorney.
The short version
Can you Airbnb your house in Charleston? In the City of Charleston, only if you live there. On Folly Beach, it's in legal limbo. In Mount Pleasant and North Charleston, possibly — if a permit is available. On Isle of Palms, generally yes, subject to your HOA. On Sullivan's, generally no.
The most expensive mistake I see is a buyer who assumes rental income is a given and discovers after closing that it isn't. If STR potential matters to your purchase, let's verify the rules on the specific property before you write the offer.
Article written by:
Dustin Guthrie, Realtor
(843) 697-7757
[email protected]
