Cape May, New Jersey

Short-term rentals are permitted in Cape May, and enforcement is rated strict. Operators must hold a City of Cape May Annual Mercantile License (Short-Term Rental) before advertising or renting, and the unit must pass an annual fire safety inspection by the Fire Prevention Bureau before the license is issued. The license renews annually. The fee is $300 for units under 4,000 square feet and $1,000 for larger units, plus a $50 annual tourism fee surcharge and a $25 parking surcharge. A decal must be permanently affixed to the main entry door.

Cape May defines a short-term rental as a rental under 175 consecutive days where the guest keeps a permanent residence elsewhere. There is no owner-occupancy or primary-residence requirement and no annual nights cap. Owners must designate a licensed managing agent who lives in Cape May County. Liability insurance is required, at a $300,000 minimum for owner-occupied multi-unit properties of four or fewer units and $500,000 for all other rentals.

STRs are allowed in most residential zones. Historic District design guidelines apply to exterior alterations on many properties. Kitchens, uninhabitable spaces and interior common areas may not be used for sleeping, and separate pool rentals are prohibited. Properties with four or more units need state registration under the NJ Landlord Registration Act.

The combined lodging tax is 14.63%: 6.625% state sales tax, 5% state occupancy fee and 3% city occupancy tax, raised from 2% in January 2022. Airbnb and Vrbo collect and remit state taxes for reservations under 90 consecutive nights. The county tourism taxes apply only to the Wildwood municipalities.

The city scans platforms nightly for unlicensed listings, and as of March 2025 over 40% of Airbnb and Vrbo listings were reported non-compliant. Confirm current rules with the city before buying.