Short-Term Rental Laws in Saugatuck, Michigan

Saugatuck operates citywide caps on non-owner-occupied STR licenses (the cap has been at-cap since the late 2010s) plus a separate cap on owner-occupied STR licenses in residential zones — both caps make new STR entry waitlist-driven. Existing licenses tied to the parcel convey with sale. Saugatuck + neighboring Douglas (across the Kalamazoo River) operate parallel STR frameworks with different caps and slot availability. The arts-tourism economy and small year-round population (~900 in Saugatuck, ~1,200 in Douglas) drive the tight caps.

Saugatuck Zoning Ordinance permits STR in R-1A, R-1B, R-2, R-3 residential and B-1/B-2 mixed-use zones subject to the citywide caps and life-safety inspection. The historic district overlay covering downtown Saugatuck adds heritage review for exterior modifications. The Saugatuck Township and Douglas (adjacent jurisdictions) each have their own STR ordinances — properties just outside the Saugatuck city limits operate under different (often more permissive) township rules. Confirm exact jurisdiction + cap status with Saugatuck City Clerk before any offer.

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

Saugatuck City Clerk + Building Inspection jointly enforce. Annual renewal of STR license. Operating without a license: administrative fines + stop-rental orders + ineligibility for future application. The cap dynamic creates a robust secondary market — properties holding continuously-renewed STR licenses in Saugatuck city limits trade at significant premiums vs equivalent unlicensed properties or properties in adjacent Saugatuck Township jurisdiction.

Combined short-term lodging tax in Saugatuck is approximately 14.000% of gross nightly revenue (state sales + state TRT + local TRT + applicable resort/city options).

Michigan Use Tax 6% + Allegan County Hotel/Motel Tax 5% + Saugatuck tourism assessment 3% — combined ~14.0% on transient lodging

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