Lake Murray Short-Term Rental Rules — What Airbnb Buyers Must Verify Before Closing

South Carolina's STR Preemption Law: The Starting Point

South Carolina passed significant short-term rental legislation in 2021 (SC Code of Laws §6-1-140) that limits local governments' ability to ban short-term rentals outright. The law prohibits counties and municipalities from prohibiting STRs entirely in residential areas, though it allows them to regulate STRs through registration, permitting, noise, parking, and occupancy requirements. This state-level preemption is important context for Lake Murray buyers: the four counties surrounding the lake (Lexington, Richland, Newberry, Saluda) cannot simply ban Airbnb-style rentals by ordinance. What they can do — and what some are doing — is impose registration requirements, annual fee structures, inspection protocols, and specific operating conditions.

The practical implication for Lake Murray buyers who want to generate rental income: the legal framework at the state level is friendlier to STR operators than in many other states. But "not banned by the county" is not the same as "freely permitted." You need to check three separate layers before assuming a Lake Murray property can be legally rented short-term: (1) county ordinances and any registration requirements, (2) HOA or POA deed restrictions and covenants, and (3) the SC Department of Revenue's requirement for STR operators to collect and remit state accommodation tax plus any applicable local hospitality fees. All three can independently prohibit or complicate STR operation, and none of them are checked automatically when you list on Airbnb or VRBO.

Lexington County: No Comprehensive STR Ordinance as of Mid-2026

Lexington County — where the majority of Lake Murray's developed residential shoreline sits — had not enacted a comprehensive STR ordinance or registration requirement as of mid-2026. This means that STRs in unincorporated Lexington County lakefront properties are not subject to county-level registration or permitting requirements beyond the SC accommodation tax compliance obligation. The absence of a county ordinance is not the same as a green light — HOA restrictions, septic system capacity limitations, and SC accommodation tax registration still apply — but it means the county layer of the regulatory stack is currently thin for most Lexington County Lake Murray properties.

This situation is subject to change. Multiple SC Midlands counties have been working on STR regulatory frameworks in response to community concerns about neighborhood character, parking, and noise. Buyers who are purchasing a Lake Murray property specifically for STR income-generation potential should check directly with Lexington County Planning at 212 South Lake Drive, Lexington SC 29072, phone 803-785-8121, to confirm the current regulatory status and whether any ordinances are in development. A policy that does not exist at closing may exist by the time you are establishing your rental operation.

Richland County: Monitor for Developments

Richland County, which covers the eastern Lake Murray sections in the Irmo corridor, has discussed STR regulation but as of mid-2026 had not enacted a comprehensive lakefront STR ordinance for unincorporated county areas. The City of Columbia, which is in Richland County, has its own regulations for properties within city limits — but most Lake Murray lakefront properties in Richland County are in unincorporated areas outside Columbia's jurisdiction. Verify current Richland County requirements with the Richland County Planning Department at 2020 Hampton Street, Columbia SC 29204, phone 803-576-2180.

Newberry and Saluda Counties: Rural Minimums

Newberry and Saluda counties, which cover the more rural upper Lake Murray sections, have smaller county governments and as of mid-2026 had not enacted comprehensive STR ordinances for their lake shoreline areas. The smaller tax base and rural character of these counties means both less regulatory activity and less enforcement capacity for whatever regulations do exist. Buyers considering STR investment specifically in the quieter upper-lake sections of Murray in Newberry or Saluda County should verify current county positions with the respective county planning offices before finalizing any STR business model assumptions.

The HOA Problem: The Layer That Most Often Prohibits Rentals

For the large majority of Lake Murray organized communities — HOA-governed subdivisions with deed restrictions, covenants, and conditions (CC&Rs) — the HOA layer is where STR restrictions most commonly reside, regardless of what the county does or does not regulate. Many Lake Murray community covenants were written decades ago and contain language prohibiting commercial activity, transient occupancy, or use for compensation — language that courts have interpreted to cover modern STR platforms. Even communities whose documents were written more recently may include explicit short-term rental prohibitions driven by resident concerns about privacy, parking, community character, and insurance exposure.

The only reliable way to know whether an HOA-governed Lake Murray property can legally be rented short-term is to read the current CC&Rs. Not the listing agent's characterization of them. The actual recorded documents, which are filed with the county register of deeds and which you can obtain through the county recorder or through your title search. Read every restriction on "use" and look for language about: transient occupancy, rental duration minimums, commercial activity, and any specific STR or vacation rental prohibitions added through HOA amendment. If the CC&Rs are ambiguous, have your attorney give you a written opinion before closing — not an informal verbal characterization.

SC Accommodation Tax: Required Regardless of County Rules

South Carolina requires STR operators to collect and remit the state accommodation tax (7%) on all short-term rental income. The tax applies to any rental of furnished accommodations for fewer than 90 days — the definition that covers Airbnb, VRBO, and direct vacation rental activity. In addition to the state 7%, Lexington County imposes a local hospitality fee and Richland County may impose additional local accommodations taxes. STR operators must register with the SC Department of Revenue to collect and remit accommodation taxes; failure to register and collect is a violation that can result in back taxes, penalties, and interest. Airbnb and VRBO do not automatically handle SC accommodation tax remittance in all jurisdictions — verify the current platform tax collection status with the SC Department of Revenue or a local CPA who handles SC vacation rental tax before beginning STR operations.

The SC DOR accommodation tax registration is separate from income tax reporting. STR income is taxable as ordinary income for federal and SC state income tax purposes. If the property is a second home that you also rent short-term, the IRS mixed-use rules (the "14-day rule" or 10% of rental days rule) determine how expenses are allocated between personal use and rental activity. This calculation can be complex and benefits from CPA guidance before you begin STR operations rather than after your first tax year.

Dominion Energy Permit Terms and STR Use

Dominion Energy's Lake Murray Permitting Guidelines govern what happens on and below the 360-foot contour. The dock permit is a license tied to the property and its owner — it does not explicitly govern what the homeowner does with the upland property or with short-term guests. However, Dominion's permit terms do require that dock users comply with all applicable laws, do not use the dock for commercial activity, and maintain the dock in a safe condition. If a short-term rental guest damages the dock or uses it in a way that violates Dominion's guidelines, the permit holder — not the guest — is responsible for the violation and its consequences. STR operators on Lake Murray should ensure their rental agreements explicitly hold guests responsible for Dominion permit compliance and limit dock use to the activities authorized under the permit.

Homeowners insurance is also a critical consideration for STR operators. Standard homeowners policies typically exclude or severely limit coverage for commercial rental activity. When a home is rented to paying guests, even on a short-term basis, many standard policies treat it as commercial use and deny claims arising during the rental period. STR-specific insurance products are available from carriers including Proper Insurance and Foremost — these policies are designed for the STR use case and provide the coverage that standard homeowners policies exclude. Verify your coverage with your insurance agent before your first rental guest arrives, not after a claim is denied.