Orange Beach Short-Term Rental Regulations

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Permit & Licensing

Vacation Rental License

This permit type does not require primary residence.

Application Process

Owner or authorized agent applies to the Department of Finance and must submit: a to-scale floor plan showing each bedroom to be rented, a site plan showing on-site parking and trash enclosure locations, a signed affidavit certifying compliance with applicable fire, building, and safety codes, and 24/7 contact information. The Directors of Community Development and Finance review the application and decide whether to issue the license, and may refer the application to the City Council for decision.

Tax Obligations

Combined rate: 16% of gross rental income.

Collection: Lodging tax is filed and remitted through the My Alabama Taxes (MAT) online portal (myalabamataxes.alabama.gov), administered by the Alabama Department of Revenue.

Rental Limits

Orange Beach does not impose an annual cap on the number of nights you can rent. Individual-stay rule: 14 consecutive days or less (the ordinance's definitional threshold for a licensed "vacation rental").

Occupancy & Density Limits

Overnight occupancy is capped by bedroom count: studio/1 bedroom = 2 occupants, 2 bedrooms = 4, 3 bedrooms = 6, 4 bedrooms = 8, 5 bedrooms = 10, 6 bedrooms = 12 (plus up to 2 children age 14 or under).

Zoning & Restrictions

The Vacation Rental License applies only to single-family or two-family dwellings located within the RS-1, RS-2, RS-3, and MHS residential zoning districts; it excludes properties within the beach overlay district. The city publishes a Vacation Rental Map showing eligible areas in green.

Insurance & Safety

Insurance

Orange Beach 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

• Applicant must submit a signed affidavit certifying the vacation rental complies with all applicable fire, building, and safety code requirements as part of the license application.

Penalties for Non-Compliance

The Finance Director may initiate proceedings to revoke or refuse to renew a vacation rental license if the licensee provided materially false or misleading information or violated any requirement of the article; the City Council may revoke or refuse to issue the license, or condition renewal/issuance on compliance, including suspending the license for a set period.

Compliance Checklist

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

1. Meet safety requirements. Applicant must submit a signed affidavit certifying the vacation rental complies with all applicable fire, building, and safety code requirements as part of the license application.
2. Apply for Vacation Rental License. Submit application + $500 fee.
3. Register for tax accounts. Set up hotel occupancy tax accounts with the city tax authority.
4. Collect and remit taxes. 16% on all bookings.
5. Renew annually. Contact city for renewal fee details.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Orange Beach?

Yes. Operating a short-term rental — including an Airbnb or Vrbo — in Orange Beach requires a Vacation Rental License.

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

A Vacation Rental License in Orange Beach costs $500 per year.

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

No. Orange Beach 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 Orange Beach?

Orange Beach 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 Orange Beach?

Short-term rental stays in Orange Beach are subject to a combined 16% in lodging taxes. This combines 4% State Lodgings Tax + 2% Baldwin County Lodging Tax + 10% City of Orange Beach Lodging Tax. The host is responsible for collecting and remitting them.