Short-Term Rentals · Hilton Head Island & the Lowcountry
Hilton Head Island's vacation-rental market is one of the most structured — and most rewarding — in the Southeast. Knowing exactly where rentals are permitted, what the Town requires, and what to verify before closing is what separates a sound investment from a costly assumption.
For out-of-state buyers drawn to the island's oceanfront communities, Forest Beach bungalows, and resort-corridor villas, short-term rental potential is often central to the purchase decision. The Hilton Head market rewards that instinct: a combination of year-round destination demand, a well-established permit framework, and a defined set of communities where vacation rentals have operated for decades creates real, underwritable income opportunity.
The nuance is in the details. Community covenants, Town ordinances, and tax obligations layer on top of one another, and the answer to 'can I rent this?' depends on which side of a gate — sometimes literally — a property sits. COAST brokered by eXp Realty guides buyers through every layer of that due diligence before an offer is made, not after.
Short-Term Rentals · Hilton Head Island & the Lowcountry
Roughly 70 percent of Hilton Head Island falls within gated, master-planned communities governed by property owners' associations. Those POA covenants determine rental rights independently of Town ordinance — and they vary sharply. The communities where short-term rentals are well-established and operationally familiar include Sea Pines Resort, Palmetto Dunes Oceanfront Resort, and Shipyard. Among the island's un-gated neighborhoods, Forest Beach (both North and South), Folly Field, Singleton Beach, Bradley Beach, and Burkes Beach carry the highest concentration of active vacation-rental inventory and have long attracted buyers specifically for that use.
Seven communities prohibit short-term rentals by POA covenant and enforce minimum lease terms ranging from 90 days to six months: Hilton Head Plantation, Indigo Run, Long Cove Club, Palmetto Hall, Port Royal Plantation (inside the gate), Wexford, and Windmill Harbour. One documented exception exists at Port Royal: parcels recorded under the MLS area 'PR Outside Gate' — including Wimbledon Court villas — carry no POA fee and do permit short-term rentals. That split is specific to Port Royal; the other six prohibit communities do not have an analogous outside-gate carve-out. Buyers should treat community covenant review as a non-negotiable step in due diligence, not an afterthought.
The Town of Hilton Head Island regulates any rental of fewer than 30 consecutive days as a short-term rental, and its requirements apply island-wide on top of whatever community rules govern a given property. As of 2026, an annual STR permit is required at a fee of $150 per bedroom per year — a structure that replaced an earlier flat fee following Town Council action in late 2025. The permit portal opened April 6, 2026; renewals submitted after May 15, 2026 carry a $250 late fee (April 30 in subsequent years). Permits are issued for a specific property, run May 1 through April 30, and are non-transferable: a buyer cannot inherit a seller's permit and must apply anew, a first-year timing consideration worth building into any income projection.
A Town business license — separate from state business registration — is required in addition to the STR permit. Operators must also open an account with the Town's Revenue Services Office and file quarterly. On the tax side, short-term rental gross revenue is subject to a layered stack that includes South Carolina state sales tax, SC state accommodations tax, Town of Hilton Head accommodations tax, and a Town Beach Preservation Fee. Industry-reported estimates place the combined burden in the range of nine to thirteen percent of gross revenue, though exact rates should be confirmed with the Town's Revenue Services Office at the time of filing. The Town added six full-time STR-dedicated enforcement staff in its FY2026 budget — compliance obligations are actively monitored.
The due-diligence checklist for a short-term rental purchase on Hilton Head Island has three distinct layers, and each must be confirmed independently. First, the community layer: obtain and read the current POA or CSA covenants, conditions, and restrictions — not a summary, the document itself — and confirm the minimum lease term and any rental-frequency limits that apply to the specific parcel. Community rules can change, and a covenant amendment that post-dates a prior owner's rental history may alter what the next owner can do. Second, the Town layer: confirm the property's eligibility for a new STR permit, note the permit year timing relative to your anticipated purchase closing, and calculate the annual permit fee based on the bedroom count.
Third, the financial layer: build the full tax stack into any income projection. A property that generates strong gross rental revenue will net materially less once permit fees, business license costs, quarterly tax remittances, and property-management fees are accounted for. Palmetto Dunes carries one well-documented internal exception: the Leamington neighborhood prohibits STR for single-family detached homes, while Leamington villas and condos remain permitted. Forest Beach and Folly Field, by contrast, carry fewer HOA restrictions and represent the island's most operationally straightforward entry points for first-time rental buyers.
COAST brokered by eXp Realty has represented buyers and sellers across every major community on Hilton Head Island, including the island's highest-priced residential sale of 2025 — the oceanfront estate at 15 Bald Eagle Road in Sea Pines, closed by COAST founders Rick Saba and Tristan O'Grady. That depth of transaction experience across the market's full price range means our agents have worked through the covenant, permit, and tax questions that matter to rental-income buyers in every relevant community — not hypothetically, but in closed transactions.
For out-of-state buyers, COAST's approach begins well before the offer. We identify whether a target property or community permits short-term rentals, flag any internal neighborhood exceptions, model the permit-fee cost against the bedroom count, and connect buyers with local attorneys and CPAs who know South Carolina accommodations tax compliance. The goal is a buyer who closes with complete clarity on what the property can and cannot do — and a realistic picture of net income after the full cost stack. COAST brokered by eXp Realty is the #1 eXp team in South Carolina by volume, and the network of eXp Luxury agents operating under the COAST umbrella covers the full Lowcountry, from Hilton Head Island to Bluffton and beyond.
The Market · June 2026
Source: Hilton Head Area Association of REALTORS® — published June 2026 market report.
Community by Community
| Community | Short-term rentals |
|---|---|
| Bradley Beach | Permitted — with a Town of Hilton Head permit + business license |
| Burkes Beach | Permitted — with a Town of Hilton Head permit + business license |
| Folly Field | Permitted — with a Town of Hilton Head permit + business license |
| Forest Beach | Permitted — with a Town of Hilton Head permit + business license |
| Palmetto Dunes | Permitted — with a Town of Hilton Head permit + business license |
| Sea Pines | Permitted — with a Town of Hilton Head permit + business license |
| Shelter Cove | Permitted — with a Town of Hilton Head permit + business license |
| Shipyard | Permitted — with a Town of Hilton Head permit + business license |
| Singleton Beach | Permitted — with a Town of Hilton Head permit + business license |
| Belfair | Varies by property — confirm before purchase |
| Bluffton | Varies by property — confirm before purchase |
| Daufuskie Island | Varies by property — confirm before purchase |
| May River | Varies by property — confirm before purchase |
| Old Town Bluffton | Varies by property — confirm before purchase |
| Palmetto Bluff | Confirm by property and HOA |
| River Club | Confirm by property and HOA |
| Baynard Park | Not permitted |
| Berkeley Hall | Not permitted |
| Colleton River | Not permitted |
| Hampton Hall | Not permitted |
| Hampton Lake | Not permitted |
| Hilton Head Plantation | Not permitted |
| Indigo Run | Not permitted |
| Leamington | Not permitted |
| Long Cove Club | Not permitted |
| Moss Creek | Not permitted |
| Oldfield | Not permitted |
| Palmetto Bay | Not permitted |
| Palmetto Hall | Not permitted |
| Port Royal | Not permitted inside the gate; permitted outside |
| Rose Hill | Not permitted |
| Spanish Wells | Not permitted |
| Wexford | Not permitted |
| Windmill Harbour | Not permitted |
Community rules as maintained in the COAST brokered by eXp Realty community guides; the Town of Hilton Head STR permit + business license applies island-wide on top of any community rule. Always verify the specific property and regime before an offer.
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Questions about short-term-rental? A COAST agent will respond personally — no obligation.
Buy with COAST
If short-term rental potential is central to your Hilton Head Island purchase, the details of community covenants, Town permits, and tax compliance deserve the same attention as the property itself. COAST brokered by eXp Realty has guided buyers through this market across every community on the island — and our agents know which questions to ask, and which answers to verify, before a contract is signed. Contact COAST brokered by eXp Realty to discuss your search.
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