Is Airbnb Legal in Ocean City? 2026 Rules, Permits & Taxes

Permit required

Yes

Taxes on a stay

12%

Fine for hosting without a permit

Up to $5,000

Listings showing a permit number

98%

Next rule change

Jul 1, 2027

Listing figures: AirROI, 12 months to October 2026. A number on a listing doesn't prove the permit or license is valid, and a missing one doesn't prove there is none.

The rules in brief

Who needs it

Every owner renting a house, condo or other unit in Ocean City; a rental of 30 consecutive days or fewer needs the short-term license on top of the base rental license.^1,2,7,8,9,17

Issued by

Town of Ocean City, Division of Rental Housing (Planning and Community Development, with the Finance Department)

Valid for

One year: rental licenses are due on May 1 and expire on April 30. Renewal opens a month before expiration and is done online through the town's rental license portal.

Processing

The division issues or denies a license within 14 days of receiving an application; a new license must schedule a rental inspection within 30 days.

On listings

The number must appear on every listing

Platform checks

A hosting platform or property manager may not facilitate bookings in Ocean City without verifying that the owner's license is valid, must show the license control number in every listing through a mandatory field, and keeps booking records for five years.

Fees

Who qualifies

• The license holder must be the property owner; the license does not transfer when the home is sold.
• The owner names a person who can accept legal notices, authorize repairs and respond to the property within 60 minutes.
• The application declares the number of bedrooms and the required on-site parking, and consents to inspection during the license term.
• The owner certifies that all federal, state, county and municipal taxes on the rental are paid current when applying and renewing.
• Owners of homes built before 1978 complete the Maryland lead-law certification that comes with the application.
• Condo, HOA and lease rules still apply; the town license does not override them.

How to apply

1. 1 Look up the property's zoning district on the town's zoning map, because occupancy is calculated differently in R-1 and MH districts than in all other districts.
2. 2 Download the Rental License & Noise Control Permit Application from the town's Rental Hub, mark the short-term classification (0100 condo, 0101 single-family house or 0102 timeshare, $246) and list the emergency contact.
3. 3 Mail the completed form to Town of Ocean City, P.O. Box 5000, Ocean City, Maryland 21843-5000, or deliver it in person; new applications are not accepted online.
4. 4 Register with the Comptroller of Maryland for sales and use tax and with the Worcester County Treasurer for room tax.
5. 5 Schedule the rental inspection within 30 days of a new license, and add the license control number to every listing.

Permit rules

Rental license and noise control permit for every rental

An owner who rents a property in Ocean City for any length of time first needs the town's annual rental license and noise control permit; the $196 fee covers both for a house or condo.^7,9

Short-term rentals need a second, supplementary license

A rental of 30 consecutive days or fewer needs a Short-Term Rental Housing Unit License in addition to the base rental license; it has been required since January 1, 2025 and costs $50 a year.^2,7,8 In force since January 1, 2025

A license does not pass to a buyer

Licenses are not transferable, so a buyer of a rental home applies for a separate license of their own.²

License year runs May 1 to April 30

Rental licenses are due on May 1 and expire on April 30; a license issued between December 1 and May 1 is a half-year license at one-half the annual license fee, and a license not obtained on time carries a late charge of 10 percent after 15 days plus 2 percent for each 30 days after that.^2,9

License control number in every listing

Every advertisement or listing for a rental must show the valid rental license control number, and Airbnb tells hosts to add the control number to the listing to finish registration.^1,17 In force since February 3, 2025

Display the license inside the rental

For condominium, single-family and cooperative rentals, the owner must display the license inside the rental housing unit.²

Platforms must verify the license before booking

No hosting platform or property manager may facilitate bookings in Ocean City without verifying that the owner's license is valid, and a platform must provide a mandatory field for the license control number in its listings.^2,17

The owner holds the license; no residency rule

The license holder must be the property owner. The town's rental code does not require the owner to live in the home or be present during stays, so second homes and investment properties can be licensed.^1,2

Condo, HOA and lease rules still apply

The town license does not override association or lease terms: a condo or HOA that bans short stays, or a lease that bars subletting, still binds the host.¹⁷

New licenses in R-1 and MH neighborhoods are open again

On February 17, 2026 the Mayor and Council rescinded the moratorium on new short-term rental licenses in R-1 and MH districts, so owners of single-family and mobile homes there can apply again under the same rules as everyone else.¹⁸ Applies to: R-1 and MH districts · In force since February 17, 2026

Local contact who can respond within 60 minutes

The owner must give the town the name, address and phone number of a person authorized to accept legal notices, handle repairs and code violations, and respond to the property within 60 minutes, and must post that contact information inside the rental.^1,7 In force since February 3, 2025

R-1 and MH districts: 2 persons per bedroom plus 2

In R-1 single-family and MH mobile-home districts, overnight occupancy is limited to 2 persons per bedroom plus 2 additional persons, with children aged 10 and younger excluded only between midnight and 7:00 a.m.; a 3-bedroom house sleeps 8.^1,7 Applies to: R-1 and MH districts · In force since February 3, 2025

Other districts: 40 square feet per person plus 2

Outside R-1 and MH districts, occupancy is 40 square feet of floor area per person, counted from legally permitted bedrooms, with 2 additional occupants allowed for each dwelling unit other than efficiency units.⁷

Advertise only the approved bedrooms

A listing cannot show more bedrooms than the building permit plans approve, and attics, garages and other rooms cannot become bedrooms without permits.^1,7 In force since February 3, 2025

Required parking must stay available to renters

The application declares the required on-site parking, and those spaces must be kept available to renters and not used for anything else.^1,8

Inspection within 30 days of a new license

A new rental license must schedule a rental inspection within 30 days; the town may also inspect before issuing a license.⁷

Random five-year inspection rotation

Rental properties are inspected on a random five-year rotation, with inspections scheduled between 2025 and 2029; the Division of Rental Housing contacts owners picked in a given year.⁷

Fire extinguisher and alarms in every rental under 30 nights

Since October 1, 2026, Maryland requires a working fire extinguisher and working smoke and carbon monoxide alarms in any unit rented for fewer than 30 consecutive days, with alarms replaced if they fail or are more than 10 years old.⁴ In force since October 1, 2026

Smoke alarms must be interconnected

Ocean City's rental inspection checklist, revised September 2026, requires all detectors to be interconnected from October 1, 2026, in line with the state rule that one alarm sounding activates all alarms in the unit.^4,14 In force since October 1, 2026

Evacuation diagram and emergency numbers posted

Each unit must show a conspicuous evacuation diagram marking every exit and a list of emergency telephone numbers for police and fire rescue.⁴ In force since October 1, 2026

Three calls for service in 12 months suspend the license

Three documented calls for service or citations for different incidents (noise, overcrowding, public drunkenness, parking nuisances and similar) within 12 months automatically suspend the rental license for up to 30 days; a suspended unit cannot lawfully be rented.¹ In force since February 3, 2025

Register with the Comptroller for sales tax

The owner or their agent must be registered with the Maryland Comptroller for state sales and use tax, which individuals who rent out homes or rooms owe on stays.^2,12

Lead-law certification with the application

The rental license application includes a Maryland lead-law form on which the owner states whether the home was built before 1978 and, if so, gives the state registration and inspection certificate numbers.⁸ Applies to: homes built before 1978

No minimum stay after voters rejected one

Voters rejected a minimum-stay ordinance for R-1 and MH districts at a July 22, 2025 referendum, and the town's rental code sets no minimum stay or annual night cap.^7,18 In force since July 22, 2025

Median nightly rate, booked nights

$315

Taxes on that night (12%)

$38

Guest pays, before Airbnb and cleaning fees

$353

What the host still handles

• A sales and use tax account with the Comptroller of Maryland; Ocean City's rental code requires the owner or their agent to be registered.
• A Worcester County room tax account through the County Treasurer's Application for Room Tax, with a report due on the 21st of each month for the previous month's rentals, for stays Airbnb does not collect.
• The Ocean City rental license and noise control permit, plus the short-term license, before the first booking.^{3,10,11,12,13,16}

• Renting without an active rental license is a municipal infraction with a fine of up to $5,000, and each day the violation continues counts as a separate offense.^7,8
• Three documented calls for service or citations in 12 months automatically suspend the rental license for up to 30 days, and the city manager can suspend or revoke a license for rental-code or safety violations.¹
• A property with open code violations is not renewed until the violations are corrected and verified by inspection.⁷
• A license not obtained on time carries a late charge of 10 percent after 15 days and 2 percent for each 30 days after that.⁹
• Worcester County room tax unpaid for a month after the due date draws a 10% penalty plus interest of one-half of one percent a month.¹⁰

1. July 1, 2028 Upcoming
   Counties must require annual fire-safety inspections

   By July 1, 2028 each Maryland county and Baltimore City that allows short-term rentals must require an annual inspection of every unit for the state fire-safety standard; Ocean City's own rental inspections currently run on a random five-year rotation.^4,7

2. July 1, 2027 Upcoming
   Comptroller collects county hotel tax from large platforms

   Chapter 638 of 2025 takes effect: large booking platforms must collect county and municipal hotel rental tax and pay it to the Comptroller instead of each county, and counties may not tax short-term rentals at a higher rate than other lodging.^5,6

3. October 1, 2026
   Maryland fire-safety rules for short-term rentals take effect

   Units rented for fewer than 30 consecutive days must have a working fire extinguisher, interconnected smoke alarms and carbon monoxide alarms, a posted evacuation diagram and posted emergency numbers; Ocean City's inspection checklist, revised September 2026, lists interconnected detectors from this date.^4,14

4. February 17, 2026
   Moratorium on new R-1 and MH licenses repealed

   After a referendum petition was validated, the Mayor and Council rescinded the December 2025 ordinance that had extended the moratorium through January 3, 2027, and new licenses in those districts reopened.¹⁸

5. January 1, 2026
   Worcester County room tax rises to 6%

   The hotel rental tax on short-term rentals of four months or less in Worcester County, which includes Ocean City, went from 5% to 6%.^3,10,15

6. November 3, 2025
   Municipal-infraction penalties updated

   Ordinance 2025-27 amended the Town Code's penalty provisions, including section 14-175 on rental housing; municipal infractions under the license code now carry fines of up to $5,000.²

7. July 22, 2025
   Voters reject a minimum-stay ordinance

   A minimum-stay ordinance for R-1 and MH districts, approved by the council 4-3 on March 3, 2025, failed at a special referendum on July 22, 2025.¹⁸

8. February 3, 2025
   Emergency moratorium on new licenses in R-1 and MH districts

   The Mayor and Council approved an emergency moratorium on new short-term rental licenses in R-1 single-family and MH mobile-home districts; it was extended on December 1, 2025 and repealed on February 17, 2026.¹⁸

9. February 3, 2025
   Rental code tightened: occupancy, contact, listing number

   Ordinance January 2025 set R-1 and MH occupancy at 2 persons per bedroom plus 2, required a contact able to respond within 60 minutes, required the license number in every listing and added automatic suspension after three calls for service in 12 months.^1,2

10. January 1, 2025
    Supplementary short-term rental license required

    Rentals of 30 consecutive days or fewer began needing the supplementary short-term license ($50 a year) on top of the base rental license.^2,9

11. June 17, 2024
    Short-term and long-term rental categories created

    The Mayor and Council adopted Ordinance October 2024, defining a short-term rental housing unit (30 consecutive days or fewer) and a long-term unit (31 or more) in the rental housing code.²

Estimate what an Ocean City home could earn

1. 1. Ordinance 2025-01, Short-Term Rental Housing Regulations (amending Chapter 14) · Mayor and City Council of Ocean City
2. 2. Code of the Town of Ocean City, Chapter 14, Businesses (Article II licensed occupations; Article V rental housing) · Municode
3. 3. Worcester County Code, Taxation and Revenue, Subtitle VI Hotel Rental Tax · Worcester County, MD (eCode360)
4. 4. Chapter 9 (House Bill 1221), Public Safety - Short-Term Rental Units - Fire Safety (Jillian and Lindsay Wiener Short-Term Rental Fire Safety Act), 2026 · Maryland General Assembly
5. 5. Local Government Article section 20-413 (Comptroller duties, effective July 1, 2027) · Maryland General Assembly
6. 6. Chapter 638 (Senate Bill 979), Local Government - Accommodations Intermediaries - Hotel Rental Tax - Collection by Comptroller and Alterations, 2025 · Maryland General Assembly
7. 7. Ocean City Rental Hub · Town of Ocean City
8. 8. Rental License & Noise Control Permit Application (full year) · Town of Ocean City
9. 9. Resolution 2025-01, license fees for premises for habitation · Mayor and City Council of Ocean City
10. 10. Room Tax · Worcester County Treasurer
11. 11. Worcester County Application for Room Tax · Worcester County Treasurer (hosted by the Town of Ocean City)
12. 12. Maryland Sales and Use Tax Alert: Acts of 2016, Chapter 3, Taxable Price - Accommodations · Comptroller of Maryland
13. 13. Business tax tip 8: Calculating Maryland's Sales and Use Tax · Comptroller of Maryland
14. 14. Rental Housing Inspection Checklist (revised 9/2026) · Town of Ocean City
15. 15. Newly Adopted Room Tax Rate of 6.0% Effective January 1, 2026 · Worcester County Government
16. 16. Occupancy tax collection and remittance by Airbnb in Maryland · Airbnb Help Center
17. 17. Ocean City, MD · Airbnb Help Center
18. 18. Ocean City Council repeals short-term rental moratorium after petition qualifies for referendum · WBOC