Short-Term Rental Laws in Salem, Massachusetts

Salem's 2021 ordinance creates 3 STR categories: Owner-Occupied (host present or away ≤90 days/year; permitted in all residential zones), Owner-Adjacent (host in different unit of same 2-3 family building; permitted), and Investor-Owned Non-Owner-Occupied (restricted; limited to a citywide cap of approximately 250 units with grandfathering for pre-ordinance operators). Salem's Halloween-season tourism peak (October) drives extreme seasonal demand; the ordinance balances that against year-round housing pressure.

Salem zoning broadly permits residential rental across most zones. The binding constraint is the investor-owned cap — non-owner-occupied STR permits are capped citywide and largely allocated to grandfathered pre-2021 operators. New investor entry requires either (a) a pre-existing license transfer (rare; tied to specific parcels) or (b) waiting for the cap allocation pool to refresh. Owner-occupied STR is broadly available subject to registration. The historic district overlay covering downtown and the McIntire Historic District adds Historical Commission review for exterior changes.

Operators must hold a short-term rental permit before listing. See the official permit portal.

Salem Inspectional Services administers STR registration with annual renewal. Application requires MA DOR Operator Certificate, proof of insurance, designated 24/7 local responsible-party contact, life-safety inspection, parking plan, and primary-residence verification for owner-occupied applicants. The investor-cap verification happens at initial application — pre-2021 grandfathered operators must demonstrate continuous renewal. MA DOR collects state + 6% local option via MassTaxConnect. Operating without registration: $300+ per day per violation.

Combined short-term lodging tax in Salem is approximately 11.700% of gross nightly revenue (state sales + state TRT + local TRT + applicable resort/city options).

MA State room occupancy excise 5.7% + Salem local option 6% — combined ~11.7% on transient lodging

Verify the current combined rate via the Utah State Tax Commission before remitting — rates drift quarterly.