Hilton Head short-term rentals may see fee hike in 2026. Here are the details
Owning a short-term rental on Hilton Head Island could get more expensive this year, depending on the size of the property. At a Monday meeting The Town of Hilton Head Island Finance and Administrative Committee reviewed a new proposal that would increase permit fees for the majority of short-term rentals within town limits.
Under the proposal, the current $250 flat fee would be replaced by a $150 per bedroom fee structure, increasing fees for most rentals while decreasing fees for some.
Officials say increased short-term rental activity on the island has increased the need for inspections, timely response to complaints and clear communication with stakeholders.
“As the STRs increase in size, there’s often more impact on the communities,” said Ward 2 Council Member Patsy Brison during the meeting. That leads to higher costs, she said.
The committee voted 3-3 to move forward with the proposal. According to a staff report, the proposal will need to pass through two town council readings, scheduled for March 10 and March 31.
The short-term rental permit renewal portal will go live on April 6, and the deadline for the short-term rental permit payments will be May 15, according to the staff report. In future years, the deadline for renewing will be May 1.
Owners of short-term rentals in gated communities may have to apply for an additional permit issued by the community owner’s association, which could incur additional fees.
How will the new fees work?
The new $150 per bedroom fee will increase costs for some short-term rentals but decrease costs for others.
One bedroom and studio short-term rentals will see a $100 decrease in annual permit fees. According to a staff report, there are 1,057 permitted one-bedroom rentals and six studio rentals.
For two-bedroom rentals, of which 3,121 permits have been issued, the annual fee would be $300 — a $50 increase from before.
The remaining 3,184 rentals with three or more bedrooms would see significantly higher fees if the new proposal takes effect. A seven-bedroom home, of which 130 short-term rental permits have been issued, would need to pay a $1,050 permit fee.
With over 20,000 bedrooms across Hilton Head’s 7,368 rentals, the new fee schedule is expected to generate over $3 million in revenue for the town annually.
Additionally, a $250 late fee will be issued to short-term rentals that do not renew before May 15, 2026. Starting 2027, the late fee will be assessed on May 1.
STR program costs have ballooned
Under the new proposal, the town would spend extra money on staffing and operational expenses to manage the short-term rental program.
The town had previously budgeted $1,825,000 for the short-term rental program. That budget was the equivalent to the revenue generated through permit fees for 7,300 rentals. However, Byrd noted during the meeting that the actual costs for the program had ballooned to $2,137,554.
Expenses for the short-term rental program are expected to increase by $893,496 under the new program, bringing the total cost to $3,031,050.
The bulk of the increase comes from a proposed $611,900 increase in staffing expenses.
This includes hiring two senior community code enforcement officers to perform inspections and respond to complaints, a senior fire inspector to conduct short-term rental specific fire inspections and a new full-time dispatcher, who would be hired to operate a 24/7 short-term rental rapid response hotline through Fire Rescue Dispatch.
Additionally, two part-time positions in the finance department would be converted to full-time positions to help manage communications and track compliance. A public safety supervisor would be promoted to a manager position to reflect expanded responsibilities.
The town would also spend $281,296 to buy three new vehicles, six handheld radios and upgrade equipment for 10 vehicles. The town would spend $50,000 on developing a “comprehensive communication strategy,” while saving $29,700 by eliminating the current third-party hotline.
Starting May 1, 2026, permits will be issued for a 12-month period rather than for the current calendar year.
More STRs, more rules
In recent years, the Town of Hilton Head Island has taken steps to increase regulation of short-term rentals.
As short-term rentals have increased in numbers in Hilton Head neighborhoods, residents have voiced concerns about parking, noise, trash and a loss of a neighborly feel in single-family residential areas outside of gated communities.
Stakeholders in the short-term rental industry, including rental owners, property managers and real estate agents have stressed that overregulating short-term rentals could deter investors, lower property values and hurt local businesses that depend on tourists.
Hilton Head first introduced new short-term rental regulations in 2022, and they took effect Jan 1, 2023. That decision introduced the permitting system, and was a first step towards addressing parking, noise and trash issues.
New fire safety and parking regulations were approved by the town council last year, and will take effect on May 1. The town has expanded the role of its community code enforcement division, which now has the authority to issue non-criminal citations for violating the town’s short-term rental ordinance.
This story was originally published February 11, 2026 at 8:40 AM.
