Saugatuck Short-Term Rental Regulations

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Permit & Licensing

Short-Term Rental (STR) License (Chapter 99.5), one license per dwelling unit, no owner-occupied/non-owner-occupied distinction

This permit type does not require primary residence. Zoning restriction: Permitted citywide subject to a numeric cap on active licenses per R-1 zoning district (approx. 20% of dwelling units in each R-1 district); no cap in non-R-1 districts that permit STRs.

Application Process

Submit the STR License Application with the $540.00 annual license fee; City staff review for completeness/compliance; Fire Department schedules and conducts an inspection ($175.00 fee for each reinspection if the property fails); upon approval, the City issues a Short-Term Rental License valid for 1 year

Tax Obligations

Combined rate: 6% of gross rental income.

Collection: Self-remitted by the person renting the short-term rental (no city-run pass-through tax collection provision in the ordinance)

Filing: Monthly, quarterly, or annual returns as assigned by the Michigan Department of Treasury

Rental Limits

Saugatuck does not impose an annual cap on the number of nights you can rent. Individual-stay rule: 30 nights (rentals of 31+ consecutive days fall outside the short-term rental definition).

Occupancy & Density Limits

2 occupants per bedroom plus 2 additional occupants per finished floor, not to exceed 12 occupants total; visitors capped at 1.5x the maximum occupant count, permitted only 7:00 am - 11:00 pm

Zoning & Restrictions

Citywide license caps by R-1 zoning district: Community Residential R-1 no more than 67 licenses; Peninsula West R-1 no more than 10; Maple Street R-1 no more than 7; Peninsula South R-1 no more than 11; Peninsula North (Duneside) R-1 no more than 3; Peninsula North (Riverside) R-1 no more than 2. Non-R-1 zoning districts that permit STRs are not subject to a cap. Accessory dwelling units (ADUs) are not counted toward the caps.

Insurance & Safety

Insurance

Liability insurance is required for the property's use as a short-term rental, though the required coverage amount is not publicly specified.

Safety & Operating Requirements

• Annual fire inspection by the Saugatuck Township Fire District, conducted no later than 30 days after submittal of the license or renewal application
• Dwelling unit must meet all applicable building, health, fire, and related safety codes at all times
• Local agent required if owner/license holder is not local; must reside or maintain a physical place of business within a 25-mile radius and be accountable 24/7/365
• Occupants and visitors must be informed that pets must be secured on the premises or leashed at all times
• Fireworks by occupants and visitors must be prohibited by the owner/license holder

Penalties for Non-Compliance

• Any violation of Chapter 99.5, including continued operation after license suspension/revocation, is a municipal civil infraction under Michigan's Revised Judicature Act (MCL 600.101-600.9939), subject to a civil fine set by City Council resolution plus statutory costs; each day of violation is a separate offense
• License suspension: first suspension 3 months, second suspension 6 months, subsequent revocation permanent
• A violation is declared a public nuisance / nuisance per se, which the City may abate through Circuit Court proceedings

Platform Requirements

License number must be posted in any online listing (e.g., Airbnb, VRBO) or other advertising for the short-term rental

Compliance Checklist

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

1. Meet safety requirements. Annual fire inspection by the Saugatuck Township Fire District, conducted no later than 30 days after submittal of the license or renewal application. Dwelling unit must meet all applicable building, health, fire, and related safety codes at all times. Local agent required if owner/license holder is not local; must reside or maintain a physical place of business within a 25-mile radius and be accountable 24/7/365. Occupants and visitors must be informed that pets must be secured on the premises or leashed at all times. Fireworks by occupants and visitors must be prohibited by the owner/license holder.
2. Obtain liability insurance. Required for property's use as a short-term rental.
3. Apply for Short-Term Rental (STR) License (Chapter 99.5), one license per dwelling unit, no owner-occupied/non-owner-occupied distinction. Submit application + $540.00 fee.
4. Register for tax accounts. Set up lodging tax accounts with Michigan Department of Treasury.
5. Display your permit number. Include your permit/license number in all listings and advertisements.
6. Collect and remit taxes. 6% on all bookings.
7. Renew annually. Contact city for renewal fee details.

Frequently Asked Questions

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

Yes. Operating a short-term rental — including an Airbnb or Vrbo — in Saugatuck requires a short-term rental permit.

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

A short-term rental permit in Saugatuck costs $540.00 per year.

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

No. Saugatuck 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 Saugatuck?

Saugatuck 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 Saugatuck?

Short-term rental stays in Saugatuck are subject to a 6% Michigan Use Tax (Sales & Rentals) - Lodging. The host is responsible for collecting and remitting it.