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Renting Your Second Home on Cape Cod? Here’s Your 2026 Survival Guide

  • sarah85806
  • Jan 2
  • 3 min read

Happy New Year! As we kick off 2026, many of you are already looking ahead to the summer season. But before you open your calendars for those July bookings, there are critical updates to the "patchwork" of rental rules in our area.


Whether you own a classic cottage in Dennis or a luxury estate in Chatham, the landscape of Short-Term Rentals (STRs) has shifted. As a Realtor® focused on the Lower and Mid-Cape, I’ve put together this updated guide to help you stay compliant and protected for the 2026 season.


A luxury grey shingle-style beach house on Cape Cod with a "For Rent" sign and a coastal bicycle in the driveway.

The Cape-Wide & State Essentials


Regardless of your town, all Short-term Rentals (stays of 31 days or less) must comply with these Massachusetts laws:

  • State Registration: You must register with the Mass Department of Revenue (DOR) via MassTaxConnect. Your registration number must be displayed in all online listings (Airbnb, VRBO, etc.).

  • Liability Insurance: You are required to maintain at least $1,000,000 in liability insurance for each rental stay. Most hosting platforms provide some coverage, but you should verify this with your personal insurance agent.

  • The 14-Day Rule: If you rent your property for 14 days or fewer per calendar year, you are exempt from collecting taxes—but you still must register with the state.


2026 Town-Specific Restrictions


The "Home Rule" bylaws in our focused towns have become more specific this year. Here is the current status for 2026:


Town

2026 Status & Key Restrictions

Chatham

Strict Enforcement: The town is now actively fining unregistered rentals (up to $200/day). Annual renewals are due by February 28th.

Eastham

Ownership Caps: You are limited to two STR certificates per owner. LLCs must disclose all "natural person" owners to prevent corporate loopholes.

Brewster

New Framework: Brewster has officially moved toward formal registration and mandatory $50 safety inspections for all units.

Orleans

Portal Updates: Registration remains mandatory; ensure your local contact information is updated in the town's permit portal for the new year.

Dennis & Harwich

Occupancy & Septic: These towns are strictly tying occupancy to your Title 5 septic capacity (usually 2 people per legal bedroom + 2).


The 2026 Tax Breakdown


Total taxes for most Cape towns hover between 12.45% and 14.45%. This is a combination of:

  • 5.7% State Excise Tax

  • 4% to 6% Local Option Tax (set by each town)

  • 2.75% Cape Cod & Islands Water Protection Fund

Most hosting platforms like Airbnb and VRBO are "intermediaries," meaning they typically collect and remit the State Excise, Local Option, and Water Protection Fund taxes for you. This simplifies your monthly bookkeeping significantly!

Sarah’s 2026 Tip: Many towns are now designated as "Seasonal Communities" by the state. While this currently helps fund local housing, keep an eye on town meeting warrants this spring for any new "Community Impact Fees" that could add an extra 3% to your guests' tax bill.

Inspections, Safety & Standard Rules


The 10th Edition of the Massachusetts Building Code is now the standard. Before your first guest arrives in 2026, ensure:

  • Fire Safety: Smoke and CO detectors must be on every level and within 10 feet of bedrooms. A visible fire extinguisher in the kitchen is a "must-have."

  • Trash & Parking: Most bylaws now require professional trash pickup at least once a week and prohibit "front yard" or street parking for renters.

  • Septic Health: With higher occupancy comes more strain. If you haven't had your septic pumped in the last 2-3 years, January is the time to get on a local hauler’s schedule.

Your January 2026 Checklist:

  1. Renew Town Permits: Don't wait for the March 1st deadline in Chatham!

  2. Update Listings: Ensure your 2026 rates reflect current tax percentages.

  3. Audit Your Insurance: Confirm your $1M liability umbrella is active.


Let’s Make Your Cape Cod Dream Simple


Navigating these rules shouldn't be a hurdle to enjoying your property. Whether you're looking to buy a rental-friendly home or need a referral for a local property manager to handle these details for you, I’m here to help.


 

Sarah Keith | Realtor® at Cape Cod Bliss brokered by eXp Realty Phone: 508-237-4745 | Email: sarah@capecodbliss.com 


Office Address: 60 Munson Meeting Way, Unit J, Chatham, MA 02633

Licensed in Massachusetts: License # 9557311


We are an Equal Housing Opportunity brokerage. Information deemed reliable but not guaranteed.


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