Thinking about buying, selling, or investing on Charleston’s barrier islands? Short-term rental rules can shape your value, cash flow, and even who can use a home. It is a lot to track, especially when each island sets its own permits, fees, and enforcement. In this guide, you will learn the essentials, what is changing, and how to make confident decisions along the waterfront. Let’s dive in.
The rules that shape the waterfront market
Local governments set most short-term rental (STR) rules across Charleston County’s islands. Towns require licenses, inspections, occupancy and parking limits, and a local contact who can respond quickly to issues. At the same time, South Carolina lawmakers introduced bills in 2025 that could change local control. S.442 on the state legislature site would allow local bans or caps, while a separate House bill took a different approach. Status can change, so always check the latest.
Island-by-island STR snapshot
Isle of Palms
Isle of Palms requires an STR business license, annual reporting of rental revenues, and compliance with occupancy and parking limits. Owners must post a 24-hour contact and respond to complaints within about one hour. The city regularly updates guidance and processes on its STR page. Review current requirements on Isle of Palms’ official STR page.
Sullivan’s Island
Sullivan’s Island has long-standing restrictions that limit commercial STR activity. Licenses are non-transferable, which can affect resale value and buyer pool. Enforcement and licensing procedures are detailed in the town’s code. See transferability and licensing rules in the Sullivan’s Island municipal code.
Folly Beach
Folly Beach uses formal license types such as owner-occupied, investment, medical-hardship, and provisional categories. Occupancy and operational rules apply, and enforcement is active. Review license types and requirements in the Folly Beach code.
Kiawah Island
Kiawah issues annual STR licenses with inspections and operational standards for parking and noise. Some areas or license types function like caps because issuance can be limited or conditional. Private community rules add another layer, including gate access procedures for renters and vendors. For access logistics, see KICA’s guidance on gate access.
Seabrook Island
Seabrook Island considered and adopted STR overlay and conditional-use updates in 2024 and 2025. Expect defined districts, fee schedules, and parking standards, with council tracking changes by ordinance. Follow the town’s updates via the Seabrook Island STR ordinance page.
City of Charleston and county layers
The City of Charleston uses defined STR categories, permit rules, and a three-strike approach for repeat violations in some areas. On top of state and city taxes, Charleston County administers a 2 percent accommodations fee for transient rentals. Owners should model the full tax stack before calculating returns. Review city STR rules in the City of Charleston code and county accommodations information on Charleston County’s site.
What the numbers suggest
Commercial trackers show a high concentration of STRs on the islands relative to the mainland. For example, AirDNA reports Isle of Palms listings in the low-thousands depending on methodology, and counts vary by source. See current market snapshots on AirDNA’s Isle of Palms overview. Counts change with seasons, licensing renewals, and data methods, so cross-check municipal license rolls when available.
Performance metrics such as average daily rate and occupancy vary by island and season. Revenues cluster in spring, summer, and some holidays. Always align projections with your exact location, license type, and compliance costs.
How STRs influence prices and supply
Peer-reviewed research finds that more STR listings tend to push up local rents and home prices by reallocating housing stock to short-term use. One national study links a 1 percent rise in listings with statistically significant increases in both rents and sale prices. You can read the underlying evidence in the Marketing Science paper by Barron, Kung and Proserpio on STR impacts. On the islands, high STR penetration and limited buildable land can amplify these effects.
Beyond prices, residents and local officials often cite noise, parking, trash, and seasonal staffing strains as top concerns. Towns respond with occupancy rules, parking standards, and active enforcement to protect neighborhood quality.
Buyers and investors: quick checklist
- Verify license status in writing. Confirm whether the STR license exists, whether it is transferable, and whether there are any violations or pending actions.
- Check caps and overlays. Some towns use quotas, moratoria, or overlay districts that restrict new licenses. First-come or conditional issuance can function like a cap.
- Model the full tax stack. Include state sales and accommodations taxes, the county accommodations fee, and municipal rates or fees. Do not assume platforms remit every local tax.
- Budget for compliance. Plan for inspections, safety upgrades, local responsible-agent requirements, and response times. Gate and parking rules can add operational steps on Kiawah and similar communities.
- Underwrite conservatively. Seasonality, ordinance changes, financing terms, and insurance coverage can affect returns.
Sellers: strategy notes
Permitted investment STRs can command a premium in vacation markets, but buyers will price in regulatory risk. If a license is non-transferable, your buyer pool may narrow, and the value proposition changes. Be clear about license status, revenue history, and operating rules.
Prepare for diligence. Have records of licenses, inspections, posted license numbers, and response procedures ready. If rules changed during ownership, summarize what changed and when.
Renters and neighbors: what to expect
High-demand weeks bring more traffic, on-street parking, and trash volume. Towns enforce quiet hours, occupancy limits, and parking rules to reduce friction. Posting a local contact and responding quickly to issues is not just a rule, it helps maintain community goodwill.
What to watch next
State-level action is the biggest wild card. In early 2025, S.442 and H.3861 offered opposite approaches to local control. As of spring 2025, bills were in committee, so outcomes were unsettled. Keep an eye on the legislature and your town’s council agendas for updates and ordinance amendments.
If you are weighing a purchase or planning a sale, an experienced local advisor can help you match your goals to the right island, license path, and timing. For a one-on-one plan tailored to your property or search, connect with Amy Bolan.
FAQs
Are short-term rentals legal on Charleston’s islands?
- Yes, but rules vary by town. Most islands require STR licenses, operational standards, and local contacts, and some limit transfers or new licenses.
How do STR rules affect home values on the islands?
- Research links STR growth with increases in rents and home prices. Local rules, transferability, and caps can shift buyer demand and pricing.
Can you transfer an STR license when buying on Sullivan’s Island?
- Generally no. The town’s licenses are non-transferable, which can limit resale value and investor appeal.
What taxes should an STR owner expect in Charleston County?
- Plan for state sales and accommodations taxes, the county accommodations fee, and any municipal taxes or fees. Platform collections may not cover every local tax.
What 2025 changes could impact STRs in South Carolina?
- State bills introduced in 2025 could reshape local authority. Watch legislative updates and town agendas before you buy, sell, or relicense.
