Thinking about buying a place in Cambridge to rent on a short-term basis? The rules are clear, and they matter to your returns. You want predictable cash flow, low risk, and a simple path to compliance. In this guide, you’ll learn how Cambridge and Dorchester County handle permits, what it costs, what to expect operationally, and how Maryland’s new tax law could change your process. Let’s dive in.
Cambridge rules at a glance
Operating any short-term rental inside Cambridge city limits requires a current city permit. The city created a dedicated STR article in 2022 that sets out permit types, fees, operating standards, and penalties. Review the full text in the City of Cambridge short-term rental ordinance for details on definitions and enforcement tools.
- Permit types: Type 1 is owner or operator occupied. Type 2 is non-owner-occupied whole-unit rentals.
- Fees and term: Type 1 — $100, Type 2 — $200. Permits are valid for 3 years and must be renewed at the same fee level.
- Operations: You must document maximum occupancy, meet life-safety requirements, and post house rules inside the unit. Parking is regulated. If private parking exists, an STR may not use more than one on-street space. If no private parking exists, there is a maximum of two on-street spaces. Landscaped areas cannot be used for parking.
- 24-hour contact: You must list a local, 24-hour contact or agent. If law enforcement calls, you must contact the occupant within one hour.
- Enforcement: The city can inspect based on complaints, issue civil fines, suspend or revoke permits, and bar reapplication for six months after revocation. Operating without a valid permit is a violation.
- Transfer limits: Permits are not transferable. If the property sells, the new owner must apply for a new permit. City leaders can set permit caps by resolution if needed.
For forms and submittal, use the city STR application.
City of Cambridge short-term rental ordinance
City STR application
Dorchester County rules outside city limits
If the property is in unincorporated Dorchester County, the county’s STR rules apply. These closely mirror the city’s approach.
- Permit required: Distinct Type 1 and Type 2 categories with a three-year term.
- Application contents: Owner, operator, or agent contact, parking plan, house rules, occupancy calculation, and safety attestations.
- Operations: Minimum sleeping-area sizing applies. For example, the code references 70 square feet for one occupant plus 50 square feet per additional occupant. Safety devices and posted rules are required. Parking limits are similar to the city.
- Fees and fines: Fees are set by council resolution. Civil penalties are published in code, including initial and repeat fine levels, with potential revocation and a six-month waiting period to reapply after revocation.
Review the Dorchester County short-term rental code for the operative standards and penalty structure.
Dorchester County short-term rental code
Taxes and the 2025 Maryland change
Maryland enacted legislation in 2025 to centralize how certain platforms collect and remit local hotel rental taxes. The law sends qualifying platform remittances to the Office of the Comptroller rather than directly to each locality. Reports point to a delayed rollout, with many summaries citing an implementation window that extends into 2027.
What this means for you: continue to ensure that all local and state occupancy taxes are paid, but expect the remittance pathway to shift for larger platforms. Track your platform’s tax-collection policy and watch for guidance from the Maryland Comptroller and local finance offices.
- Read about Maryland’s 2025 legislation centralizing platform tax remittance.
- See Bloomberg Tax coverage of the change.
Maryland platform tax remittance update
Bloomberg Tax coverage
Market context: demand and seasonality
Cambridge’s STR market is modest in size and seasonal, with stronger demand in summer and early fall. Commercial datasets can provide helpful benchmarks on daily rates and occupancy. Use AirDNA’s Cambridge market snapshot as a directional reference, not as a regulatory source.
Local tourism and cultural draws support demand, including the Harriet Tubman heritage corridor, waterfront access on the Choptank, and regional events and festivals.
AirDNA’s Cambridge market snapshot
Harriet Tubman Museum and Educational Center
Compliance climate: expect active oversight
Local reporting has highlighted gaps in past registration and a push to close loopholes. Cambridge has been refining its application process and exploring stronger enforcement. Plan for complaint-driven inspections and to keep your documentation current.
Local reporting on enforcement and registration gaps
Investor checklist: before you buy
Do these items during underwriting so your numbers reflect real-world compliance.
- Confirm jurisdiction: Verify if the property is inside Cambridge city limits or in unincorporated Dorchester County. Rules differ by boundary.
- Check zoning and private rules: A permit does not override HOA, condo bylaws, leases, or deed restrictions. Confirm those early.
- Model fees and upgrades: Include permit fees, safety devices, insurance, and any code remediation in your budget.
- Parking plan: Make sure the site can meet the on-street limits and that you can clearly communicate parking to guests.
- Management: Line up a reliable 24-hour local contact and a process to respond within one hour of any law-enforcement call.
City forms, permits, and ordinances
Operations: set up to stay compliant
Use this quick-start list after closing and before you list.
- Permit in hand: Submit a complete application with occupancy plan, house rules, parking narrative, and contact details.
- Safety and capacity: Install and test smoke and CO detectors, place fire extinguishers, and confirm egress for sleeping areas. Align posted occupancy with code.
- Guest communications: Post house rules, emergency contacts, quiet hours, trash guidance, and precise parking instructions inside the unit.
- Taxes and records: Track platform tax collection and keep receipts. Reconcile local and state occupancy taxes as implementation evolves.
- Renewals and updates: Calendar the three-year renewal and update the 24-hour contact promptly if it changes.
Plan for exit and resale
Permits are non-transferable in Cambridge. If you sell, the buyer must apply fresh. If a permit is revoked, the property may be ineligible for a new permit for six months. Build this into your exit timing and your purchase agreement expectations.
If you want a clear, number-driven view of returns that includes permits, fees, and seasonality, let’s talk. With a financial advisory background and deep Eastern Shore knowledge, I can help you evaluate options, from downtown cottages to near-water retreats. Connect with Cheri Bruce-Phipps for investor-minded guidance and on-the-ground insight.
FAQs
What are Cambridge’s STR permit types and fees?
- Cambridge issues Type 1 and Type 2 permits. Fees are $100 for Type 1 and $200 for Type 2, with a three-year term and same-fee renewal per the city ordinance.
Do Dorchester County rules apply if the home is outside city limits?
- Yes. The county’s STR article governs unincorporated areas, with similar permit types, a three-year term, operating standards, and defined civil penalties.
How do Cambridge parking limits work for STRs?
- If the property has private parking, you may not use more than one on-street space for the STR. If there is no private parking, you may use up to two on-street spaces, and landscaped areas cannot be used for parking.
Will platforms handle all taxes under Maryland’s 2025 law?
- Not automatically. The law centralizes remittance for qualifying platforms and will phase in, but you remain responsible for ensuring all occupancy taxes are paid and properly documented.
What causes STR permit suspension or revocation in Cambridge or the county?
- Common triggers include operating without a valid permit, repeated confirmed violations such as noise, parking, or safety issues, failure to respond to law-enforcement calls, or false application information.
Do STR permits transfer when I buy a property?
- No. Permits are non-transferable in Cambridge. A buyer should plan to apply for a new permit and verify there are no outstanding violations before closing.
