EXECUTIVE OVERVIEW: ARE SHORT-TERM RENTALS ALLOWED?

Short-term rentals ARE ALLOWED in Holly Springs, NC, but with significant restrictions and requirements. The primary legal framework for short-term lodging in Holly Springs operates through the Bed and Breakfast designation in the Unified Development Ordinance (UDO). Pure vacation rentals (non-hosted STRs) appear to fall into a regulatory gray area that requires case-by-case interpretation by the Town Administrator.

Key takeaways for investors:

• Bed and Breakfast operations are permitted across most zoning districts with additional standards
• Traditional non-hosted STRs require Administrator interpretation and may require Special Use Permits
• Maximum 10 guest rooms for Bed and Breakfast establishments
• On-site manager/caretaker required at all times
• Residential districts have the most restrictive requirements
• Commercial and mixed-use districts offer more flexibility

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HOW TO START A SHORT-TERM RENTAL BUSINESS IN HOLLY SPRINGS

Step 1: Determine Your Operating Model and Zoning Classification

Option A: Traditional Bed and Breakfast Model

• Hosted operation with on-site manager/caretaker
• Permitted "by right" with additional standards across most zoning districts
• Provides the clearest legal pathway

Option B: Vacation Rental/STR Model

• Non-hosted short-term rental
• Requires Administrator interpretation under "Uses Not Listed"
• May require Special Use Permit depending on zoning district
• Higher regulatory risk

Step 2: Zoning District Compliance

Select a property in an appropriate zoning district:

Most Permissive Districts:

• Commercial and Mixed-Use Districts (MXR, NMX, DMX, RMX, CBSP)
• Inn and Hotel uses permitted with fewer restrictions

Moderately Restrictive Districts:

• Residential Use Districts (RR, SR, NR, NCR)
• Bed and Breakfast permitted with additional standards
• Higher compliance requirements

Step 3: Compliance with Additional Standards

For Bed and Breakfast operations, ensure compliance with:

• Guest room limitations (maximum 10)
• On-site manager/caretaker requirements
• Food service restrictions in residential districts
• Outdoor area enclosure requirements
• Special event limitations

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REQUIRED DOCUMENTS, PERMITS, LICENSES, AND GUIDELINES

Municipal Requirements

1. Unified Development Ordinance (UDO) Compliance

• Table 3.2-A compliance for permitted uses
• Additional Use Provisions compliance (Section 3.3.3)
• Development Plan Review may be required

2. Building Permits

• Building permit for any construction or modification
• Certificate of Occupancy upon completion
• Fire code compliance

3. Business License

• Standard town business license
• Contact Town Hall for current requirements

4. Special Use Permit (if applicable)

• Required for STRs not classified as Bed and Breakfast
• Special Use Permit application process (Section 11.12)
• Public hearing required
• Additional conditions may be imposed

State Requirements

1. North Carolina Sales Tax

• Sales tax registration required for lodging services
• 7.25% combined state and local sales tax rate
• Monthly filing requirements

2. Occupancy Tax (if applicable)

• Wake County occupancy tax may apply
• Currently 3% for overnight accommodations

Additional Permits/Approvals

1. Fire Department Approval

• Fire safety inspection
• Emergency egress compliance
• Smoke detector and fire suppression requirements

2. Health Department Approval

• Food service permit (if serving food to non-guests)
• Septic/wastewater compliance
• Swimming pool permit (if applicable)

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SPECIFIC REGULATIONS FOR SHORT-TERM RENTALS

Holly Springs Municipal Regulations

Zoning District Permissibility:

Residential Use Districts (RR, SR, NR, NCR):

• Bed and Breakfast: Permitted with Additional Standards (PS)
• Maximum 10 guest rooms
• Special Use Permit may be required for other STR models
• Strict compatibility requirements with neighborhood character

Commercial & Mixed-Use Districts (MXR, NMX, DMX, RMX, CBSP):

• Bed and Breakfast: Permitted with Additional Standards (PS)
• Hotel: Permitted (P) or Conditional Zoning District (CD)
• Inn: Permitted (P) or Conditional Zoning District (CD)
• More flexible operational parameters

Bed and Breakfast Additional Standards (Section 3.3.3.A):

1. Guest Room Limitations

• Maximum 10 guest rooms permitted
• Each room must comply with building and fire codes

2. Manager/Caretaker Requirements

• On-site manager and/or caretaker required during all operating hours
• Must be able to respond to guest needs and neighborhood concerns
• Contact information must be posted and readily available

3. Special Events

• Limited to invitation-only events for guests and associated parties
• Maximum 50 attendees
• At least 1 attendee must be a Bed and Breakfast guest
• Events requiring off-site parking or amplified sound need Temporary Use Permit

4. Food Service

• May provide prepared on-site food service for guests only
• In Residential Use Districts: food service cannot be advertised or offered to non-guests
• Commercial kitchen requirements may apply

5. Common Outdoor Areas (Residential Districts)

• Guest patios, pools, and lounging areas must be enclosed
• Minimum 6-foot high opaque fence required
• Purpose: mitigate visual and audible impacts to adjacent properties

Wake County Regulations

• Standard county health and safety requirements
• Occupancy tax collection and remittance
• No additional county-specific STR restrictions identified

North Carolina State Regulations

• No specific state-level short-term rental regulations identified
• General business licensing, tax, and safety requirements apply
• State fire code and building code compliance required

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CONTACT INFORMATION

Holly Springs Town Hall

Physical Address: 128 S. Main Street Holly Springs, NC 27540

Phone: (919) 557-3901 Fax: (919) 557-3903 Website: www.hollyspringsnc.gov

Key Departments:

Planning & Zoning Department

• Phone: (919) 557-3901
• Email: planning@hollyspringsnc.gov
• Responsibilities: UDO interpretation, Special Use Permits, zoning compliance

Building Inspections

• Phone: (919) 557-3901
• Email: building@hollyspringsnc.gov
• Responsibilities: Building permits, certificates of occupancy, code compliance

Business License Division

• Phone: (919) 557-3901
• Email: business@hollyspringsnc.gov
• Responsibilities: Business licenses, tax registration

Fire Department

• Phone: (919) 557-3901
• Responsibilities: Fire safety inspections, emergency access

Wake County Tax Administration

• Phone: (919) 856-5400
• Responsibilities: Occupancy tax collection, sales tax guidance

North Carolina Department of Revenue

• Phone: (877) 252-3052
• Website: www.ncdor.gov
• Responsibilities: Sales tax registration and compliance

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SOURCE PAGES

Primary Regulatory Document:

• Holly Springs Unified Development Ordinance - Use Provisions (Sections 3.2 and 3.3.3 specifically address lodging uses and Bed and Breakfast requirements)

Key Regulatory Sections Referenced:

• Table 3.2-A - Table of Permitted Uses
• Section 3.3.3 - Lodging Uses Additional Provisions
• Section 11.12 - Special Use Permit Procedures
• Section 3.1.3.B - Interpretation of Uses Not Listed

Contact and Permit Information:

• Holly Springs Official Website: www.hollyspringsnc.gov
• North Carolina Department of Revenue: www.ncdor.gov
• Wake County Government: www.wakegov.com

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DISCLAIMER: This guide is based on the provided content from the Holly Springs UDO. Short-term rental regulations can change, and this analysis represents the current state of regulations as of the document date. Investors should consult with the Town of Holly Springs Planning Department and/or a qualified attorney before proceeding with any short-term rental operation to ensure full compliance with all applicable regulations.