Bethany Beach, Delaware
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STR Regulations for Bethany Beach, Delaware
Overview: Short-Term Rental Allowance
Yes, short-term rentals are explicitly allowed in Bethany Beach, Delaware. The Town of Bethany Beach has established a comprehensive regulatory framework that requires all rental properties to obtain proper licensing and comply with specific safety and tax requirements. The town actively regulates and permits short-term rentals through its rental license program, making it clear that this is a permitted and regulated business activity within the municipality.
How to Start a Short-Term Rental Business in Bethany Beach
To establish a short-term rental business in Bethany Beach, property owners must follow a multi-step process that involves both municipal and state compliance:
Step 1: Obtain Required Licenses
- Apply for a Bethany Beach Rental License through the Town's Code Enforcement Department
- If operating as a business entity, obtain a Business License from the Town's Finance Department
- Secure a Delaware State Accommodations Intermediary License (for properties rented 31 days or less)
Step 2: Ensure Property Compliance
- Complete the mandatory Safety Certification checklist
- Verify all safety equipment and systems meet town code requirements
- Schedule any necessary property improvements or repairs
Step 3: Register for Tax Collection
- Set up systems to collect the 7% Bethany Beach rental tax
- Register for the 4.5% Delaware State rental tax collection
- Establish semi-annual tax payment procedures
Step 4: Submit Applications and Documentation
- Complete all required applications with proper notarization
- Pay applicable licensing fees
- Submit safety certification documentation
Required Documents, Permits, Licenses, and Guidelines
Municipal Requirements
Rental License
- Annual fee: $100
- License period: June 1 to May 31
- Required for all properties rented at any time during the year
- Application available through the Town's Code Enforcement Department
Business License (if applicable)
- Annual fee: $250
- Available in 1, 2, or 3-year terms
- Required for commercial rental operations
- Applications vary based on location (In Town, Out of Town, or Home Occupation)
Safety Certification Form
- Must be completed annually with rental license application
- Requires notarization (available free at Town Hall)
- Self-inspection format with owner attestation
State Requirements
Delaware Accommodations Intermediary License
- Annual fee: $25
- Required for all short-term rentals (31 days or less)
- Applications available through tax.delaware.gov and revenue.delaware.gov
Safety Requirements Checklist
Property owners must certify compliance with the following safety standards:
- Smoke Detectors: Battery-operated smoke detectors in each bedroom
- Security Systems: Deadbolt locks that do not require interior keys
- Electrical Safety: Ground-fault circuit interrupter (GFCI) protection on all outdoor electrical receptacles, bathroom receptacles, garage wall outlets, kitchen receptacles, and all receptacles in crawl spaces
- Property Identification: Minimum 4-inch-high exterior house numbers
- Window Security: Secure window locks for all windows within 12 feet of grade and second-story windows accessible by fire escapes or stairs
Specific Regulations for Short-Term Rentals
Municipal Regulations (Bethany Beach)
Licensing Requirements
- All rental properties must obtain an annual Bethany Beach Rental License
- License period runs from June 1 to May 31
- Properties rented at any time during the year require licensing
- Compliance with Chapter 102 of the Code of Bethany Beach is mandatory
Tax Obligations
- Municipal rental tax: 7% of gross rental income
- Tax payments due semi-annually: November 1 and June 1
- Online payment options available through the Town's website
Safety Compliance
- Annual safety certification required with license renewal
- All safety requirements are based on existing town code provisions
- Properties must maintain compliance with Delaware State Housing Code
- No grandfathering provisions for older properties
State Regulations (Delaware)
Tax Requirements
- State rental tax: 4.5% of rent (effective January 1, 2025)
- Applies to all short-term rental agreements (31 days or less) signed after January 1, 2025
- Tax collected by rental operator and remitted to the state
- Additional fees (cleaning, damage deposits, etc.) are not subject to state tax
Combined Tax Impact For properties in Bethany Beach, the total tax burden on short-term rentals is:
- Bethany Beach municipal tax: 7%
- Delaware state tax: 4.5%
- Total combined tax rate: 11.5%
County Considerations (Sussex County)
Unincorporated Areas
- A proposed 3% Sussex County short-term rental tax was defeated in December 2024
- Properties within Bethany Beach city limits are not subject to county rental taxes
- Nearly 50% of Sussex County short-term rentals are located in unincorporated areas
Contact Information for Local Authorities
Town of Bethany Beach
Code Enforcement Department (Rental Licenses)
- Address: Town of Bethany Beach, Bethany Beach, DE
- Website: www.townofbethanybeach.com/346/Rental-License-Process-and-Application
- Rental License Application: Available online through the town website
Finance Department (Business Licenses & Tax Collection)
- Address: Town of Bethany Beach, Bethany Beach, DE
- Website: www.townofbethanybeach.com/281/Licenses-Rental-Tax
- Online Bill Payment: www.townofbethanybeach.com/278/Online-Bill-Payment
General Town Information
- Main Website: www.townofbethanybeach.com/
- Town Code & Charter: ecode360.com/BE1351?needHash=true
Delaware State Agencies
Department of Revenue
- Website: revenue.delaware.gov
- Accommodations Intermediary License applications available online
Division of Revenue
- Website: tax.delaware.gov
- State rental tax information and licensing
Source Links
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Town of Bethany Beach Rental License Process: www.townofbethanybeach.com/346/Rental-License-Process-and-Application
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Town of Bethany Beach Licenses & Rental Tax: www.townofbethanybeach.com/281/Licenses-Rental-Tax
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Sussex County Short-Term Rental Tax Information: www.bestofbethany.com/blog/sussex-county-short-term-rental-tax-information.html
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Delaware State Short-Term Rental Tax Information: beachrentals.penfedrealty.com/article/delaware-passes-new-short-term-rental-tax
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Bethany Beach Safety Requirements: www.coastalpoint.com/news/communities/bethanybeach/bethany-beach-to-require-rental-safety-checklist/article_4251806e-3464-52f4-b472-2a7ad19eb7d1.html
This comprehensive regulatory framework demonstrates that Bethany Beach actively supports short-term rental operations while maintaining strong safety and tax compliance standards. Property owners should ensure full compliance with all municipal and state requirements before beginning rental operations, and should stay informed about potential regulatory changes at both the local and state levels.
Bethany Beach
Market Saturation Index
Photos of Bethany Beach
Overview of Bethany Beach
Bethany Beach, Delaware, is a charming coastal town known for its serene atmosphere and beautiful beaches. With a population of around 1,200 year-round residents, the town swells significantly during the summer months due to an influx of tourists and short-term renters. Bethany Beach is located approximately 15 miles south of Rehoboth Beach, DE, and roughly 50 miles southeast of Dover, the state capital. It is part of Delaware's renowned "Quiet Resorts," which also includes South Bethany and Fenwick Island.
Bethany Beach is an appealing destination for short-term rentals due to its family-friendly environment, safe community, and array of activities suited for visitors of all ages. Key landmarks that attract tourists include the Bethany Beach Boardwalk, a half-mile long promenade known for its quaint shops, restaurants, and ocean views. More information can be found on the official Bethany Beach website.
Another notable landmark is the Bandstand, located at the heart of the boardwalk, which hosts a variety of free concerts and entertainment events throughout the summer. Details on events can be checked here.
The town also boasts the Bethany Beach Nature Center, which offers educational programs and walking trails for nature enthusiasts. More about the center's activities and offerings is available at their website.
These features, combined with its proximity to other Delaware beach towns and attractions, make Bethany Beach a popular choice for short-term rental properties, particularly during the peak summer season.