Annapolis, Maryland Short Term Rental Regulations Guide for Airbnb hosts

Overview: Are Short-Term Rentals Allowed in Annapolis, MD?

Yes, short-term rentals are allowed in Annapolis, MD, but with significant restrictions. The city has implemented a comprehensive regulatory framework that includes licensing requirements, occupancy taxes, geographic limitations, and strict cap restrictions. As of October 2025, new ordinances limit short-term rentals to no more than 10% of any given blockface, with a lottery system in place to manage existing properties that exceed this threshold.

What do Airbnb hosts actually earn in Annapolis?

Annapolis hosts earn a median $44,026/year with $358 ADR and 48% occupancy.

Top performers pull in $63,429+ per year.

See the full Annapolis market breakdown

How to Start a Short-Term Rental Business in Annapolis

Step-by-Step Process

Verify Zoning Compliance: Confirm your property is located in an area where short-term rentals are permitted
Obtain Required State Licenses: Apply for Maryland Sales and Use Tax License from the State Comptroller
Create CSS Account: Register for the City of Annapolis Citizen Self-Service (CSS) Portal
Submit Application: Complete the short-term rental license application through the CSS portal
Meet Contact Requirements: Ensure you have proper local contacts if you're not a full-time Annapolis resident
Upload Documentation: Attach your MD Sales & Use Tax License and other required documents
Monitor Geographic Limits: Be aware of the 10% blockface cap restrictions
Set Up Tax Systems: Prepare to collect and remit the 8% occupancy tax
Plan for Renewal: Remember existing licenses in over-cap areas have until November 2027 for renewal

Pre-Application Requirements

Before beginning your application, you must have:

Maryland Sales and Use Tax License (call 1-800-638-2937 to obtain)
Local Property Manager (if you are not a full-time Annapolis resident)
Access to hosting platform information (Airbnb, VRBO, HomeAway, etc.)
Property ownership documentation

Required Documents, Permits, Licenses, and Guidelines

Essential Documents

State Level:

Maryland Sales and Use Tax License (required)
State business registration (if operating as a business entity)

City Level:

Short-Term Rental License (through CSS portal)
Proof of local contact person (if not full-time Annapolis resident)

Application Components

Business Information:

Company name and type (sole proprietorship, LLC, etc.)
Property address and ownership verification
Applicant contact information

Hosting Platform Details:

All hosting platforms used to advertise the property
Platform account information
Listing URLs and property identifiers

Compliance Documentation:

Maryland Sales & Use Tax License attachment
Property management contact information (if applicable)
Local emergency contact details

Specific Regulations for Short-Term Rentals

Geographic and Quantitative Restrictions

10% Blockface Cap:

No new licenses will be issued if more than 10% of a blockface are already short-term rentals
Blockface defined as one side of a city block
Current status: 42 blockfaces exceed the cap, with 30 in Ward 1, 5 in Ward 2, and 7 in Ward 8

Property Count Limitations:

Blockfaces with fewer than 10 residential units are limited to one short-term rental license
Existing over-cap properties have renewal rights until November 2027

Operational Requirements

Hosting Platform Compliance:

All properties using hosting platforms must register and pay occupancy tax
Platforms include Airbnb, HomeAway, VRBO, and similar services
Must report all rental activity through the CSS portal

Local Contact Requirement:

Non-resident property owners must designate a local property manager within Annapolis city limits
Failure to include this contact will result in application rejection

Tax Obligations

Occupancy Tax (8%):

8% of gross rental income must be paid to Anne Arundel County
Increased from 7% to 8% effective July 1, 2023
Considered the hotel tax under state law
Remitted through the CSS portal

Tax Remittance Process:

Monthly reporting required through CSS portal
Due dates and filing procedures managed online
Failure to remit can result in license suspension

Exemptions and Special Provisions

Event-Based Exemptions:

Naval Academy Commissioning Week
Spring and fall boat shows
During these periods, the 10% cap does not apply

Owner-Occupied Exemptions:

Properties where the owner lives on-site are exempt from the 10% cap
Owner-occupied rentals receive priority in lottery systems

Licensing and Renewal Process

Initial Licensing:

All applications processed through CSS portal
Review and approval timeline varies
License issuance via email notification

Renewal Process:

Existing over-cap properties: eligible for renewal until November 2027
Post-2027: subject to lottery system
Annual renewal required for all active licenses

Lottery System (Effective November 2027):

Implemented for blockfaces exceeding 10% cap
Prioritizes existing license holders
Local residents receive preference over non-local owners

Enforcement and Compliance

Licensing Compliance:

Only 50.5% of advertised short-term rentals are currently licensed
City reports over 500 STR units advertised at any given time
Enforcement remains a concern among city officials

Stay Duration:

Short-term residential rentals limited to 120 consecutive days per calendar year
99% of stays last between 1-7 nights

Contact Information

Primary Authority Contacts

City of Annapolis Planning and Zoning Department

Phone: 410-260-2200
Email: KMKRAUSE@ANNAPOLIS.GOV
Contact Person: Karen Krause

Mailing Address: City of Annapolis
160 Duke of Gloucester
Annapolis, MD 21401

Mayor's Office:

Phone: 410-263-7997
Email: mayorbuckley@annapolis.gov

State Tax Authority

Maryland Office of the Comptroller

Phone: 1-800-638-2937
Purpose: Maryland Sales and Use Tax License registration

Online Services

CSS Portal Access:

URL: css.annapolis.gov
Portal: selfserve.annapolis.gov/energov_prod/selfservice#/home
Functions: Applications, renewals, tax remittance, license printing

Source Links

Official City Resources

County Tax Information

Anne Arundel County Code - Occupancy Tax Section 4-6-105

News Coverage and Legislative Updates

Legislative Documents

Annapolis City Council Legislation - Ordinance 17-25

Important Note for Investors: The regulatory environment for short-term rentals in Annapolis is actively evolving. The city has demonstrated a commitment to balancing tourism revenue with community preservation. Potential investors should carefully monitor legislative updates and enforcement practices, as ongoing discussions suggest additional regulations may be forthcoming. The current 10% cap and lottery system create a limited and competitive licensing environment, particularly in downtown areas where demand is highest.

Next step

Found a property in Annapolis?

Paste any address and get estimated revenue, cash-on-cash return, and comparable STR performance in under 5 minutes. 3 free analyses per day.

Ask the AI Advisor about Annapolis

Annapolis, the capital of Maryland, sits on the western shore of the Chesapeake Bay in Anne Arundel County. With a population of approximately 40,000, the city carries a distinctly maritime character, its downtown clustered around a small harbor and brick-lined streets. Best known as the home of the United States Naval Academy and as a sailing capital of the East Coast, Annapolis also serves as a gateway to the broader Chesapeake Bay region. The city lies roughly 30 miles east of Washington, D.C. and about 25 miles south of Baltimore, making it an easy drive from either metropolitan area.

The United States Naval Academy is the city's most prominent institution, founded in 1845 and occupying a waterfront campus at the edge of the historic district. Visitors can tour the grounds, watch the midday formation in summer, and explore the Naval Academy Museum, all within a short walk of downtown. The academy's presence anchors Annapolis' identity and draws year-round visitors interested in military history and architecture.

Just up the street from the academy, the Maryland State House is the oldest state capitol in continuous legislative use in the United States, dating to 1772. Its distinctive wooden dome dominates the skyline, and the building hosted the ratification of the Treaty of Paris in 1784. Free tours make it a popular stop for visitors interested in early American history and colonial architecture.

The Chesapeake Bay defines the surrounding landscape, and Annapolis' relationship with the water is most visible at City Dock, where sailboats tie up alongside cafes and seafood restaurants. From here, visitors can take sailing charters, harbor cruises, or walk across the Spa Creek bridge to the residential neighborhood of Eastport. The waterfront walk, lined with shops and seafood counters, is one of the most popular stretches in the city.

A short drive east of downtown, Sandy Point State Park sits at the tip of the peninsula where the bay meets the Severn River, offering swimming beaches, fishing piers, and views of the Chesapeake Bay Bridge. It's a favorite summer escape for visitors looking to extend their stay beyond the historic district.

Annapolis makes a compelling base for a short-term rental because it concentrates a remarkable amount of history, waterfront scenery, and food into a compact, walkable core. The combination of an active sailing scene, year-round cultural events, easy access from both Washington and Baltimore, and proximity to Chesapeake Bay recreation gives the city broad seasonal appeal. Visitors tend to return for the brick sidewalks, the seafood shacks, and the feeling of a working port that is also one of America's most carefully preserved colonial capitals.