Overview: Are Short-Term Rentals Allowed in Damascus, VA?

Short-term rentals are SEVERELY RESTRICTED in Damascus, Virginia as of September 2024. The Damascus Town Council voted 5-1 to limit transient lodging (short-term vacation rentals) to commercial districts only, effectively prohibiting new STR operations in residential areas where most properties are located.

Key Restriction Details:

• New STR permits are NO LONGER ISSUED for residential properties (R-1, R-2, R-3 zones)
• Only 21 existing short-term rental permits will be honored through grandfathering
• STRs are restricted to commercial and industrial districts only
• Existing grandfathered properties retain STR rights even if sold to new owners

Current Market Status for STR Investors

For new investors: The Damascus STR market is essentially closed for residential properties. Only commercial district properties may qualify for new STR permits, significantly limiting investment opportunities.

For existing operators: If you own one of the 21 grandfathered properties, you can continue operations and even transfer STR rights to future buyers.

How to Start a Short-Term Rental Business (Limited Options)

Given the severe restrictions, starting an STR business in Damascus requires:

Step 1: Property Location Verification

• Verify your property is located within designated commercial or industrial districts
• Contact the Damascus zoning office to confirm eligibility before proceeding
• Residential properties (R-1, R-2, R-3 zones) are prohibited from obtaining new STR permits

Step 2: Zoning Compliance

• Obtain zoning compliance certificate confirming commercial district location
• Review current zoning maps to verify exact commercial district boundaries
• Note: The town may be considering rezoning to expand commercial areas

Step 3: Business Registration

• Apply for Damascus business license (renewed annually by March 31st)
• Register for tax collection purposes
• Obtain proof of property ownership documentation

Step 4: Regulatory Compliance

• Comply with all local zoning requirements for commercial properties
• Ensure adherence to any additional commercial district regulations

Required Documents, Permits, and Licenses

Municipal Requirements:

• Business License (renewed annually by March 31st)
• Zoning Compliance Certificate (confirming commercial district location)
• Proof of Property Ownership in commercial zone
• Tax Registration for collection purposes

State-Level Requirements (Virginia):

• Virginia state sales tax registration (5.3% rate)
• Local lodging tax compliance (rates vary)
• General business registration with Virginia State Corporation Commission

Documentation Checklist:

• Property deed showing commercial district location
• Detailed business plan for STR operations
• Insurance documentation
• Safety compliance certificates (smoke detectors, carbon monoxide detectors)

Specific Regulations for Short-Term Rentals

Damascus Municipal Regulations:

• Zoning Restrictions: STRs permitted ONLY in commercial and industrial districts
• Permit Cap: Maximum of 21 total STR permits (grandfathered existing operations)
• Grandfathering Rights: Existing STR permits transferable with property sales
• No New Residential Permits: Zero new permits available for residential properties

County-Level Regulations:

Damascus is located in Washington County, Virginia. County-specific STR regulations may apply in addition to municipal restrictions.

Virginia State Regulations:

• Tax Requirements: Virginia state sales tax (5.3%) applies to STR income
• Local Authority: Virginia law permits local governments to regulate STRs
• Lodging Taxes: Local lodging taxes may apply (verify current rates)
• Business Registration: State business registration may be required

Contact Information for Local Authorities

Town of Damascus

• Phone: (276) 475-3831
• Email: info@damascus.org
• Mailing Address: P.O. Box 576, 208 West Laurel Avenue, Damascus, VA 24236
• Temporary Physical Location: Damascus Motor Sales, 786 North Beaver Dam Avenue
• Website: Not specified in available sources

Additional Contacts:

• Damascus Planning Commission: Contact through main town number for zoning inquiries
• Damascus Zoning Office: Available through main town hall contact

Important Considerations for Investors

Market Challenges:

• Extremely limited new permit availability
• High competition for commercial district properties
• Ongoing regulatory review and potential changes
• Community division on STR issues

Economic Factors:

• Damascus remains a significant tourist destination ("Trail Town USA")
• Annual Trail Days festival creates high demand periods
• Virginia Creeper Trail and Appalachian Trail access drives tourism
• Limited supply may benefit existing operators but restricts new investment

Future Outlook:

• Town may consider rezoning to expand commercial areas
• Ongoing discussions about STR regulations expected
• Tourism economic impact remains significant consideration
• Regulatory changes possible as town balances resident concerns with tourism revenue

Source Links

• STR Profit Map Damascus Regulations
• WCYB News: Short-term vacation rentals restricted in Damascus
• WCYB News: Topic of short-term vacation rentals divides town
• 96.9 WXBQ: Change to short term rental ordinance in Damascus

Disclaimer: STR regulations are subject to change. Always verify current requirements directly with Damascus Town Hall and consult with local legal counsel before making investment decisions. The restrictions implemented in September 2024 represent a significant shift in policy that severely limits new STR investment opportunities in Damascus.