McHenry Short-Term Rental Regulations

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Permit & Licensing

Residential Rental Registration

This permit type does not require primary residence.

Application Process

Register the rental property with the Community Development Department on a form provided by that department before leasing, renting, or allowing the unit to be occupied. An online Rental Registration form is available through the City's Permits, Forms & Applications portal. The ordinance does not specify an inspection requirement, a registration fee, or a renewal period.

Tax Obligations

Combined rate: 11% of gross rental income.

Collection: The hotel operator collects the tax from the guest at the time the room charge is paid and remits it to the City Administrator (or designee) on a monthly basis. Separately, as of July 1, 2025, hosting platforms (e.g., Airbnb, Vrbo) that meet the state definition of a 're-renter of hotel rooms' must register with the Illinois Department of Revenue and collect/remit the state Hotel Operators' Occupation Tax themselves.

Filing: Monthly

Rental Limits

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

Zoning & Restrictions

• No STR-specific zoning restrictions apply to short-term rentals of a single-family dwelling — general residential zoning applies and the registration requirement in Title 10 §10-1-25 governs.
• Separately, a 'Bed and Breakfast Establishment' (a single-family structure with no more than 5 rooms for rent, stays not exceeding 4 consecutive nights per guest, with at least one meal served to overnight guests) is defined and listed as a conditional use (Group B) in all Residential Districts, and must also comply with the City's rental/renter occupancy requirements.

Insurance & Safety

Insurance

McHenry 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.

Penalties for Non-Compliance

• Violating the residential rental registration requirement (Title 10 §10-1-25): $200 fine (or $175, per the Title 15 Chapter 1 two-column fine schedule) plus the City's cost of prosecution, including reasonable attorney fees
• Each day a violation continues is considered a separate offense (Title 10 §10-1-28)

Market Snapshot

Demand context for McHenry 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 McHenry:

1. Apply for Residential Rental Registration. Submit application. Contact city for fee details.
2. Register for tax accounts. Set up lodging tax accounts with City of McHenry City Administrator; Illinois Department of Revenue.
3. Collect and remit taxes. 11% on all bookings.
4. Renew annually. Contact city for renewal fee details.

Frequently Asked Questions

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

Yes. Operating a short-term rental — including an Airbnb or Vrbo — in McHenry requires a Residential Rental Registration.

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

No. McHenry 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 McHenry?

McHenry 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 McHenry?

Short-term rental stays in McHenry are subject to a combined 11% in lodging taxes. This combines 5% McHenry Hotel Operators Occupation Tax + 6% Illinois Hotel Operators' Occupation 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 McHenry?

Penalties run up to $200 (see the Penalties section for the full schedule).