Licensing requirements, the 90-night vacation rental cap, DC's transient lodging taxes, and how to stay compliant as a property owner.
Maryland draws a critical legal distinction between two types of short-term rentals that determines your annual night cap and operating rules.
A short-term rental is any rental of your home to a transient guest for fewer than 30 consecutive nights, while you are present in the property. There is no annual night cap for hosted rentals, but the property must remain your primary residence.
A vacation rental is where you rent your entire home while you are not present. DC imposes a 90-night cap per calendar year on vacation rentals. Exceeding 120 days without an approved exemption means you are operating illegally.
Not sure which category applies? Get a free compliance assessment from Alcove Stays. We review your property, HOA documents, and eligibility before you spend a dollar on applications.
Operating any STR in DC without a valid license is illegal. Here is the process step by step.
DC law requires that the property is your primary residence. Investment properties and second homes do not qualify. Only one STR license is issued per host.
If your property is in a condominium or HOA, obtain written proof that the association permits short-term rentals before applying.
Carry a minimum of $500,000 in liability insurance. This can be satisfied by Airbnb's AirCover, but you must be able to document coverage.
Submit your application to Montgomery County DPS including evidence of primary residence, HOA documentation, description of rental spaces, and the license fee.
Post your license number in all listings and inside the unit. Register for DC transient lodging tax remittance. Maintain records for at least annual.
Alcove Stays manages the full licensing and compliance process for DC property owners.
Schedule a Free AssessmentDC imposes transient lodging taxes on all short-term rental revenue. Here is the breakdown for property owners.
| Tax Type | Rate | Notes |
|---|---|---|
| Hotel occupancy tax | 10.20% | Applies to all transient lodging |
| Sales tax | 6.00% | General DC sales tax rate |
| Total effective rate | ~14.95 - 16.20% | Combined burden on STR revenue |
Good news: Airbnb and VRBO automatically collect and remit most DC taxes for platform bookings. If you accept direct bookings, you are personally responsible for collection and remittance to DC OTR.
No. DC law requires that the property you rent short-term is your primary residence. Investment properties, second homes, and properties you do not personally live in do not qualify for a DC STR license. This rule is strictly enforced by Montgomery County DPS.
The 90-night cap applies to vacation rentals where you rent your entire home while you are not present. Hosted rentals (renting a room while you live there) have no cap. The limit resets each calendar year.
DC imposes approximately 14.95-16.20% in combined transient lodging taxes, including a 10.20% hotel occupancy tax and 6% sales tax. Platforms like Airbnb collect and remit these automatically.
Yes. Airbnb, VRBO, and most major platforms collect and remit DC transient lodging taxes for bookings made through their platform. Direct bookings outside a platform are your responsibility.
Yes. DC law requires hosts to obtain written proof that their condo or HOA permits STR operations before applying for a license. Many DC condo associations have adopted bans on short-term rentals.
Alcove Stays manages licensing, tax remittance, and regulatory compliance so you can focus on earning.
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