Short-Term Rental Laws in Cape May, New Jersey

Cape May City requires a Rental Property License with mandatory annual life-safety inspection for all rentals under 175 consecutive days. STR is permitted in most residential and resort zones but with one of NJ's more restrictive inspection regimes — Cape May's Victorian-era housing stock means inspectors are strict on smoke/CO, egress windows, and electrical compliance. Multi-week rentals (30+ days) face a lighter inspection regime. The neighboring Cape May Point (separate borough) has parallel rules; West Cape May, Lower Township, and Wildwood Crest are also separate jurisdictions.

Cape May City zoning permits short-term residential rental across all residential zones (R-1, R-2, R-3) and resort/commercial overlays subject to the Rental Property License. The R-1 single-family zones are the most common STR location. The mandatory life-safety inspection is the practical gate — failing inspection (most often for smoke/CO placement, egress, or electrical) blocks license issuance. Plan for $500–$2,000 in inspection-remediation costs on older Victorian properties.

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

Cape May Code Enforcement coordinates inspection scheduling and annual renewal. Application requires proof of insurance ($300K liability minimum), designated 24/7 local responsible-party contact within 30 miles, parking plan, and the inspection certification. Cape May County's 2% tourism fee + NJ State Transient Accommodations tax (5% occupancy fee on top of 6.625% sales tax) apply on top — register separately with NJ Division of Taxation. Operating without a license: $500+ per violation, escalating; persistent unlicensed operation triggers cease-rental orders.

Combined short-term lodging tax in Cape May is approximately 13.625% of gross nightly revenue (state sales + state TRT + local TRT + applicable resort/city options).

NJ State sales 6.625% + NJ State occupancy fee 5% + Cape May County tourism fee 2% — combined ~13.625% on transient lodging

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