Durham County, North Carolina Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Durham County, North Carolina?

Short-term rentals, such as those listed on Airbnb and VRBO, have become increasingly popular in Durham County, North Carolina. However, hosts must navigate a complex set of regulations at both the state and local levels. This article provides an overview of the key rules and requirements for operating a short-term rental in Durham County.

Starting a Short-Term Rental Business in Durham County

Durham does not currently have any specific short-term rental regulations. However, there are some general rules that apply to all residential properties in the city:

• Properties must meet the standards outlined in the City of Durham's Minimum Housing Code
• Occupancy is typically limited to 2 people per bedroom plus 2 additional guests
• Parking may be limited based on the number of bedrooms
• Noise ordinances are enforced, especially after 10pm

Short-term rental operators should comply with all applicable state and local laws, including those relating to fire and building codes, smoke and carbon monoxide detectors, housing codes, and payment of taxes.

Starting a successful short-term rental business in Durham County requires careful planning, investment, and a commitment to providing excellent service. By staying informed about local regulations and following best practices, hosts can tap into the growing demand for vacation rentals in the area.

Short-Term Rental Licensing Requirements in Durham County

Based on the information from the official Durham County website, there are currently no specific licensing requirements for short-term rentals in the county. Durham does not require a special license or permit to operate a vacation rental property like an Airbnb or VRBO.

However, short-term rental hosts in Durham County are still subject to other general regulations and requirements:

1. Business Registration: Hosts must register their short-term rental as a business with the Durham County Tax Administration by filling out a Business Registration Application (Form NC-BR). There is no fee for registering.
2. Tax Collection: Hosts are responsible for collecting and remitting the applicable state sales tax (4.75%) and Durham County's room occupancy tax (6%) on all short-term rental income.
3. Housing Standards: All rental properties, including short-term rentals, must meet the minimum housing and building codes outlined in the Durham City Housing Code. Properties may be subject to inspections through programs like the Proactive Rental Inspection Program (PRIP).
4. Zoning Compliance: While there are no specific zoning laws for short-term rentals, hosts should ensure their property's use complies with the zoning designation for the neighborhood.
5. Noise and Occupancy Limits: Hosts must follow the city's noise ordinance and occupancy limits, which are typically 2 people per bedroom plus 2 additional guests.

Since there is no formal short-term rental licensing process in Durham County, there are no application forms to submit or licensing fees to pay to the county. Hosts simply need to register their rental as a business and comply with the general rules and regulations.

However, operating a short-term rental without adhering to the tax, housing, and zoning requirements can result in fines, penalties, and legal issues. The exact fines would depend on the specific violation and severity, as determined by Durham County's code enforcement.

In summary, while Durham County does not have strict short-term rental licensing requirements like some other markets, hosts still need to follow the general business, tax, and housing regulations. Failure to comply can lead to penalties.

Required Documents for Durham County Short-Term Rentals

Based on the information from official Durham County sources, there are no specific documents required to operate a short-term rental in the county. Durham does not have a formal licensing or permitting process for vacation rentals like Airbnb and VRBO properties.

However, short-term rental hosts in Durham County must still comply with general business and tax requirements. The key documents needed are:

1. Business Registration Application (Form NC-BR): Hosts must register their short-term rental as a business with the Durham County Tax Administration. This form collects information about the business, its owners/partners, and its activities. There is no fee to register. The form can be submitted online or by mail.
2. Sales and Occupancy Tax Registration: In addition to registering as a business, hosts must also register to collect and remit the applicable sales and occupancy taxes. This is done through the North Carolina Department of Revenue. Hosts will receive a sales and use tax ID number to use when filing tax returns.
3. Rental Agreement: While not required by the county, it is strongly recommended that hosts have a written rental agreement signed by guests before each stay. This agreement should outline the terms of the rental, house rules, and host/guest responsibilities.
4. Insurance Policy: Hosts should obtain appropriate insurance coverage for their short-term rental property. This may include a commercial liability policy or a specialized vacation rental insurance plan. While not mandated by the county, proper insurance is essential to protect hosts' properties and businesses.

Since Durham County does not have other short-term rental specific requirements, hosts do not need to submit any additional application forms, permits, licenses, or supporting documents to the county. The business registration and tax ID are the key documents needed to operate legally.

However, hosts must ensure their short-term rental properties are safe, habitable, and compliant with all building codes, housing standards, and zoning rules. Properties may be subject to inspections through city programs like the Proactive Rental Inspection Program (PRIP).

In summary, while Durham County keeps documentation requirements minimal for short-term rentals, hosts still need to register their business, obtain a tax ID, and maintain compliant properties. A rental agreement and proper insurance are also important to operate responsibly and protect the business.

Durham County Short-Term Rental Taxes

Short-term rental hosts in Durham County are subject to several types of taxes on their rental income. It's important for hosts to understand and comply with these tax obligations to avoid penalties and legal issues.

State Sales Tax

North Carolina imposes a statewide sales tax of 4.75% on short-term rentals. This tax applies to the total gross receipts derived from the rental of any room, lodging, or accommodation furnished by a host. The sales tax is collected by the host and remitted to the North Carolina Department of Revenue.

Local Sales Tax

In addition to the state sales tax, Durham County assesses a 2.75% local sales tax on short-term rentals. This brings the total combined sales tax rate for short-term rentals in Durham County to 7.5%. The local sales tax is also collected by the host and remitted to the state along with the state sales tax.

Room Occupancy Tax

Durham County levies a room occupancy tax of 6% on accommodations rented for less than 90 days. This tax is in addition to the state and local sales taxes. The occupancy tax applies to the gross receipts from the rental, including any additional fees like cleaning or pet fees.

For hosts who rent through Airbnb, the platform automatically collects and remits the 6% occupancy tax on behalf of the host. However, hosts are still responsible for collecting and remitting the state and local sales taxes.

Possible Deductions and Write-Offs

Short-term rental hosts may be able to deduct certain expenses related to their rental business to reduce their taxable income. Some common deductible expenses include:

1. Mortgage interest
2. Property taxes
3. Insurance
4. Utilities
5. Cleaning and maintenance costs
6. Supplies for guests
7. Advertising and platform fees
8. Depreciation of furniture and equipment

Hosts should keep detailed records and receipts for all rental-related expenses. It's advisable to consult with a tax professional to ensure proper reporting and maximization of deductions.

In summary, short-term rental hosts in Durham County must collect and remit a 7.5% combined sales tax (4.75% state + 2.75% local) and a 6% room occupancy tax on their rental income. Airbnb collects the occupancy tax for hosts, but the sales tax remains the host's responsibility. Careful tracking of expenses can help offset rental income and reduce tax liability.

North Carolina Wide Short-Term Rental Rules

While many short-term rental regulations are set at the local level in North Carolina, there are a few key state laws that apply to all vacation rentals, including those in Durham County.

The primary state-level law governing short-term rentals is the North Carolina Vacation Rental Act. This act applies to any rental of a residential property for vacation or recreational purposes for less than 90 days. Key provisions of the Vacation Rental Act include:

1. Vacation rental agreements must be in writing and contain specific notices and provisions outlined in the statute.
2. The act governs the handling of tenant security deposits, advance rent payments, and other fees by landlords and brokers.
3. Landlords are required to keep vacation rental properties in fit and habitable condition.
4. The act establishes an expedited eviction process that landlords can use to remove tenants for specified reasons, such as holding over past the end of the lease term.

In addition to the Vacation Rental Act, short-term rental operators must collect and remit state sales tax (4.75%) and any applicable local occupancy taxes on their rental income. In Durham County, hosts are responsible for collecting the 6% occupancy tax and remitting it to the county, unless they only rent through a platform like Airbnb that collects and remits the tax on their behalf.

At the state level, North Carolina currently does not require short-term rentals to be registered or licensed. State law prohibits cities and counties from requiring rental property owners to obtain a permit or permission from the local government to lease their properties.

However, a bill introduced in the North Carolina legislature in 2023 (Senate Bill 667) proposes changes that would establish a more unified regulatory structure for short-term rentals across the state. If passed, this bill would prevent local governments from banning short-term rentals, limiting rental nights, or enacting other specified restrictions. The implications of this potential law change on existing local ordinances remain to be seen.

So in summary, while Durham County does not have its own stringent short-term rental licensing requirements, hosts must still comply with the statewide Vacation Rental Act, tax collection obligations, and general local zoning and housing codes. Monitoring potential changes to state law will also be important for hosts going forward.

Does Durham County Strictly Enforce STR Rules?

Based on discussions in online real estate investing communities like BiggerPockets and Reddit, Durham County appears to be relatively Airbnb-friendly compared to other cities. The lack of specific short-term rental regulations in Durham makes it easier for hosts to operate without strict oversight.

Many hosts on BiggerPockets and Reddit report successfully running short-term rentals in Durham, with few mentioning any issues with the county regarding regulations. One host on BiggerPockets even reported earning over $16,000 in a single month from co-hosting properties in Durham, suggesting a thriving short-term rental market in the area.

The overall sentiment is that Durham is less restrictive than other major cities when it comes to short-term rental rules. Hosts seem able to operate their rentals without facing the same level of enforcement seen in markets with more established regulations.

However, this does not mean that Durham STR operators can ignore all rules. The county still expects compliance with general housing standards, occupancy limits, and tax collection. Properties may be subject to inspections through programs like the Proactive Rental Inspection Program (PRIP).

So while Durham may not have specific STR ordinances to enforce, hosts must still follow other applicable regulations. But compared to stricter markets, Durham is considered one of the more Airbnb-friendly areas, allowing the short-term rental industry to grow quickly.

In conclusion, the lack of targeted enforcement, combined with the absence of STR-specific laws, makes Durham County an attractive and relatively easy place to operate a short-term rental. Hosts are taking advantage of this Airbnb-friendly environment to build successful STR businesses in the Durham market.

How to Start a Short-Term Rental Business in Durham County

Starting a successful short-term rental business in Durham County requires careful planning and execution. Here are the key steps to get your business up and running:

1. Research the local market and regulations: Before investing in a property, thoroughly research the short-term rental market in Durham County. Analyze factors like demand, competition, pricing, and seasonality. Familiarize yourself with the county's zoning laws, housing codes, and any specific regulations that may apply to short-term rentals.
2. Create a detailed business plan: Develop a comprehensive business plan that outlines your goals, target market, competitive advantages, financial projections, and marketing strategy. This plan will serve as a roadmap for your business and help you secure financing if needed.
3. Choose the right property: Select a property that aligns with your business goals and target market. Consider factors like location, size, amenities, and potential rental income. If you don't have the funds to purchase a property outright, explore options like rental arbitrage or partnering with property owners.
4. Obtain necessary licenses and permits: Register your business with the Durham County Tax Administration and obtain any required licenses or permits. While Durham County doesn't currently have specific short-term rental permits, you'll still need to comply with general business and tax requirements.
5. Set up your business entity: Decide on the legal structure for your business (e.g., sole proprietorship, LLC, corporation) and register with the state. Consult with a legal professional and tax advisor to determine the best approach for your situation. Forming an LLC or corporation can help protect your personal assets and provide tax benefits.
6. Furnish and equip your rental: Create a welcoming and comfortable space for your guests. Invest in quality furnishings, linens, and amenities that cater to your target market. Ensure the property is clean, well-maintained, and meets all safety standards.
7. Establish pricing and booking policies: Develop a dynamic pricing strategy that accounts for factors like seasonality, demand, and competition. Set clear booking policies regarding minimum stays, cancellations, and house rules. Use pricing tools to optimize your rates and maximize revenue.
8. List your property on vacation rental platforms: Create compelling listings on popular platforms like Airbnb, Vrbo, and Booking.com. Use high-quality photos, detailed descriptions, and attractive titles to make your property stand out. Be responsive to inquiries and maintain a high level of communication with guests.
9. Implement a property management system: As your business grows, consider investing in vacation rental software to streamline operations. These tools can help with tasks like booking management, cleaning coordination, guest communication, and financial tracking.
10. Prioritize guest experience: Focus on providing exceptional service to your guests. Respond promptly to inquiries, offer local recommendations, and address any issues or concerns in a timely manner. Encourage guests to leave reviews and use their feedback to continuously improve your business.

By following these steps and staying informed about local regulations and best practices, you can build a thriving short-term rental business in Durham County. Remember to treat your rentals as a professional business, stay organized, and always prioritize the guest experience.

Who to Contact in Durham County about Short-Term Rental Regulations and Zoning?

If you have questions about short-term rental regulations, zoning, or other planning matters in Durham County, the best resource is the Durham City-County Planning Department. They are the professional planning agency for the City and County of Durham and can provide guidance on land use, development, and enforcement of adopted ordinances and plans.

Here are the key contacts and resources for short-term rental hosts:

General Planning and Zoning Questions: For general inquiries about planning, zoning, and short-term rental regulations, email Planning@DurhamNC.gov or call 919-560-4137.

Zoning Violations and Enforcement: To report a suspected zoning violation related to a short-term rental, email the Planning Department's customer service team at ZoningComplaints@DurhamNC.gov.

City-County Planning Department Address:
101 City Hall Plaza
Ground Floor
Durham, NC 27701

Durham Unified Development Ordinance (UDO): The UDO contains the zoning and land use regulations for Durham. While it doesn't have STR-specific rules, it's a key resource for understanding zoning districts, permitted uses, and development standards. The UDO can be accessed online at durham.municipal.codes.

In addition to contacting the Planning Department, short-term rental hosts in Durham may find it helpful to connect with other local hosts and investors for insights and support. Some useful groups and resources include:

1. Durham Real Estate Investors Club: This active group of local real estate investors holds regular meetings to network, learn, and share experiences. They have many members who own and operate rentals in the Durham area. Learn more at durhamrei.com.
2. BiggerPockets Durham Forum: BiggerPockets, a popular real estate investing platform, has a dedicated subforum for Durham where local investors discuss the market, strategies, and regulations. It's a great place to connect with other STR hosts. Check out the Durham forum.
3. Durham Subreddit: The r/bullcity subreddit is an active online community for Durham residents and often includes discussions related to local real estate and short-term rentals.

By utilizing these official and community resources, short-term rental hosts in Durham County can stay informed about local regulations, connect with other hosts, and get support to run successful and compliant vacation rental businesses.

What Do Airbnb Hosts in Durham County on Reddit and Bigger Pockets Think about Local Regulations?

To get a sense of how short-term rental hosts in Durham County feel about the local regulations, it's helpful to look at discussions on popular real estate and hosting forums. Here are some key insights from verified threads on Reddit and BiggerPockets:

Lack of Strict Regulations: Several hosts on the r/bullcity subreddit and BiggerPockets Durham forum note that Durham County is relatively lenient when it comes to short-term rental rules. One host stated, "Durham is even looser [than Raleigh]. Can regulations change? Of course. But 1) you're likely grandfathered in if they ever do, and 2) there are no talks or indications of changing directions on their stance."

Eviction Challenges: A concerning story shared on r/bullcity highlights the potential difficulties of evicting problem guests in Durham County. The host described a situation where Airbnb guests overstayed and essentially moved into the property, causing damage and leaving the place in poor condition. commenters noted that long-term evictions in Durham can be nearly impossible to win in under 90 days.

Opportunities for Hosts: Despite some challenges, many hosts on BiggerPockets see Durham as a strong market for short-term rentals. One experienced host shared, "The Triangle is visited year-round by travelling professionals in the research, medical, IT, and education space. We are in the top 10 fastest growing big cities right now, so families and singles are constantly flying in to check out the area." They noted that while long-term rentals don't always cashflow well in Durham, the appreciation is high and Airbnb can be a good strategy.

Questions about Regulations: On the r/NorthCarolina subreddit, a prospective host asked for guidance on where to find information about Durham's short-term rental regulations. The fact that they had a hard time locating the rules suggests that the county could do a better job making this information accessible to hosts.

Overall, the sentiment among Airbnb hosts in Durham County seems to be that the relatively relaxed regulatory environment is a double-edged sword. While it allows the short-term rental market to thrive, it can also lead to challenges dealing with problem guests and evictions. Hosts should carefully weigh the risks and rewards of operating in Durham and stay informed about any potential changes to local laws.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.