Daphne Short-Term Rental Regulations

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Permit & Licensing

Short-Term Residential Rental Business License

This permit type does not require primary residence. Zoning restriction: Special Exception (Board of Zoning Appeals) approval required; permitted only in R-4, B-1, B-1(a), B-2, and B-2(a) districts — not permitted, even by special exception, in R-1, R-2, R-3, R-5, or B-3 districts.

Application Process

Submit a City of Daphne Business License Application (by mail, email, or in person at Daphne City Hall) plus a short-term rental permit application containing: owner and property-manager contact information, a 24-hour local contact, the rental unit address, a list of hosting platforms used, an affidavit of no delinquent lodging-tax liens, and fire-official safety approval (required before the first year of operation; the unit is reinspected every 3 years). One business license is required per operator/legal entity, but the $20 annual STR permit fee and permit are required per individual unit.

Tax Obligations

Combined rate: 10% of gross rental income.

Collection: Operator files and remits lodging tax directly to the City of Daphne via a monthly Lodging Tax Return (no evidence of automatic hosting-platform tax remittance agreements for Daphne).

Filing: Monthly (due by the 20th of the month following the reporting period, unless a different frequency is approved)

Rental Limits

Daphne does not impose an annual cap on the number of nights you can rent.

Zoning & Restrictions

• Under the Land Use and Development Ordinance's Table of Permitted Uses, short-term rentals fall under the 'Lodging and tourist homes' / 'Tourist home' use category, which is not permitted by right or by Planning Commission approval in any district.
• It requires Special Exception (Board of Zoning Appeals) approval, and is listed only in the R-4 (high-density residential), B-1, B-1(a), B-2, and B-2(a) districts.
• It is excluded entirely — not even available by special exception — from the city's core single-family residential districts (R-1, R-2, R-3, R-5) and from the B-3 (Professional Business) district.

Insurance & Safety

Insurance

Daphne does not require short-term rental operators to carry specific insurance. Standard homeowner policies often exclude short-term rental activity, so many hosts obtain dedicated short-term rental or landlord liability coverage.

Safety & Operating Requirements

• Evacuation map and list of emergency procedures posted in each sleeping room
• At least one fire extinguisher in the kitchen, in any garage, and on each floor level, each with a current service tag
• Smoke alarms required in all sleeping rooms, tested monthly with records kept for Fire Department verification
• Carbon monoxide alarms installed per applicable code
• Fire official approval required before the first year of operation; signed safety affidavit required annually thereafter; unit inspected every 3 years

Penalties for Non-Compliance

No fixed fine schedule published. For the second or subsequent violation regarding the same unit within any 12-month period, the revenue officer may refer the license to the City Council for revocation; if revoked, all permits under that license are revoked simultaneously. Renewal or new-license applications may also be denied based on prior violations, including those found in a civil proceeding.

Platform Requirements

Applicants must list all hosting platforms (e.g., Airbnb, Vrbo) that will be used to market, advertise, or make available the short-term rental as part of the permit application.

Market Snapshot

Demand context for Daphne from official government and tourism statistics — the latest published annual figures, not a projection of rental income.

Figures are the latest annual statistics published by the linked official sources (retrieved 2026-07-13). Visitor counts cover the geography stated by each source, which can be wider than the city itself. Regulations above — not market conditions — determine whether and how you may operate.

Compliance Checklist

Follow these steps to legally operate a short-term rental in Daphne:

1. Meet safety requirements. Evacuation map and list of emergency procedures posted in each sleeping room. At least one fire extinguisher in the kitchen, in any garage, and on each floor level, each with a current service tag. Smoke alarms required in all sleeping rooms, tested monthly with records kept for Fire Department verification. Carbon monoxide alarms installed per applicable code. Fire official approval required before the first year of operation; signed safety affidavit required annually thereafter; unit inspected every 3 years.
2. Apply for Short-Term Residential Rental Business License… Submit application + $20 fee.
3. Register for tax accounts. Set up lodging tax accounts with City of Daphne Finance & Revenue Division / Alabama Department of Revenue.
4. Collect and remit taxes. 10% on all bookings.
5. Renew annually. $20 renewal fee.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Daphne?

Yes. Operating a short-term rental — including an Airbnb or Vrbo — in Daphne requires a Short-Term Residential Rental Business License.

How much does a short-term rental permit cost in Daphne?

A Short-Term Residential Rental Business License in Daphne costs $20 per year.

Does Daphne require a short-term rental to be your primary residence?

No. Daphne allows non-owner-occupied short-term rentals, so investment properties can qualify provided you hold the required permit.

How many days a year can you short-term rent in Daphne?

Daphne does not cap the number of nights per year you can short-term rent, though permitting, zoning, and occupancy rules still apply.

What taxes do you pay on a short-term rental in Daphne?

Short-term rental stays in Daphne are subject to a combined 10% in lodging taxes. This combines 4% Alabama State Lodgings Tax + 6% City of Daphne Lodging Tax. Hosts are legally responsible; many booking platforms collect and remit them automatically on the host's behalf.

What are the penalties for short-term rental violations in Daphne?

No fixed fine schedule published.