Hot Springs Short-Term Rental Rules and Permit Guide

Thinking about turning a Hot Springs property into a short-term rental but not sure where to start? You are not alone. Between zoning rules, permits, and taxes, the setup can feel confusing. This guide breaks it down so you can evaluate a specific address with confidence, avoid surprises, and plan a safe, neighbor-friendly operation. Let’s dive in.

Where STRs may be allowed

Short-term rental rules depend on whether your property is inside the City of Hot Springs or in unincorporated Fall River County. The first step is confirming jurisdiction and zoning for your exact address.

Inside the City of Hot Springs

City properties follow the municipal code, zoning map, and any city business license or lodging requirements. Some residential districts allow STRs outright while others may require a conditional use permit. If a property sits in a floodplain, historic area, or overlay district, you may face extra rules. For clarity, start with the City Clerk and the Planning and Zoning Department to verify what applies to your parcel.

Outside city limits in Fall River County

County properties follow Fall River County zoning and permitting. Rural cabins, guesthouses, or ranch stays can be viable, but you should confirm septic and well compliance, access and easements, and any conditional use needs for lodging. The County Planning and Zoning office is your go-to for land-use permissions, and the Treasurer or Auditor can address licensing and local tax registration questions.

Other constraints to check

• Homeowners’ association or deed restrictions may limit or prohibit rentals. Review CC&Rs before you invest.
• Density and parking rules can apply in residential areas. Be ready to document where guests will park.
• South Dakota law does not eliminate local control of STRs. City and county requirements govern the details here.

Permitting and compliance: a step-by-step checklist

Use this sequence to keep your setup organized. Local procedures vary, so confirm details with city or county staff.

1. Preliminary zoning check

• Verify the zoning district and whether STRs are permitted, allowed with conditions, or prohibited.
• If not clearly allowed, ask about conditional use or variance options, timelines, and fees.

2. Business license and local permits

• Apply for any city business license or county lodging registration that may be required.
• Ask whether Hot Springs uses a transient lodging or STR-specific registration.

3. State tax registration

• Register with the South Dakota Department of Revenue for sales and any lodging-related tax accounts tied to short-term stays.

4. Local tax setup

• Confirm if the city or county has local lodging or occupancy taxes and how often you must file.

5. Safety and building compliance

• Ask whether inspections are required. Typical items include:
  • Smoke and carbon monoxide detectors
  • Visible and accessible fire extinguisher
  • Proper egress from all sleeping rooms
  • Address numbers visible from the road for emergency services

6. Septic, well, and environmental checks (rural)

• For private systems, verify permits and condition with county or state health/environmental officials.

7. Insurance and legal review

• Confirm your policy covers STR use. Many hosts need specialized coverage or a commercial endorsement.
• Review HOA covenants and any deed restrictions in writing.

8. Occupancy and accessibility

• Ask the local fire marshal or building official about occupancy limits. If no formal limit applies, set a conservative cap tied to bedroom count and safe egress.

9. Signage and parking

• Check local sign rules before posting on-site signage. Verify how many parking spaces are allowed and where guests should park.

10. Platforms and tax automation

• If you use a platform, confirm which taxes it collects and remits for this area. You are responsible for any taxes not collected by the platform.

Taxes and ongoing reporting

Short-term stays are typically taxed as transient lodging. In South Dakota, you generally need a Department of Revenue account to collect and remit state sales and lodging-related taxes. City or county lodging taxes may apply as well. Filing frequency and rates can change, so confirm current rules before opening bookings.

Platform collection is not universal. Airbnb, Vrbo, and others may collect some taxes by agreement in certain places, but you must verify what is covered and set up your own remittance for anything not collected. Keep clear records of gross rent, platform fees, occupancy taxes collected, and expenses so filing is straightforward.

Rental income is taxable. Depending on how often you rent and the services you provide, income could be treated as business income or passive rental income. A CPA experienced with STRs in South Dakota can help you classify your activity and capture deductions like depreciation, repairs, utilities, supplies, and platform fees.

Occupancy, parking, and safety

The safest approach is to align your occupancy with local code guidance and a conservative internal policy. Bedrooms must meet egress standards to qualify as sleeping rooms. You should also set quiet hours and a no-party policy that fits local nuisance rules.

Parking plans matter in residential neighborhoods. Spell out the number of vehicles allowed, the exact parking location, and any areas that are off limits. Install and test smoke and CO detectors, place at least one fire extinguisher in a visible spot, keep exits clear, and post emergency contacts where guests will see them.

Building a realistic pro forma

Before you buy or convert a property, test the numbers. Market data providers such as AirDNA, AllTheRooms, or Mashvisor can help you estimate occupancy, average daily rates, seasonality, and revenue. Build your model with a margin of safety.

Include these line items:

• State and local taxes and filing costs
• Platform fees and payment processing
• Cleaning, laundry, and restocking
• Utilities, internet, landscaping, and snow removal
• Insurance, repairs, and reserves for capital items
• Professional services such as accounting

Noncompliance can lead to fines, a cease-and-desist order, or loss of future permit eligibility. Budget time and resources for compliance from day one.

Neighborly hosting best practices

Good communication prevents complaints and keeps your rental operating smoothly.

• Pre-listing outreach: If appropriate, let immediate neighbors know the property will be a short-term rental, share a local contact number, and ask for feedback on parking and trash placement.
• Clear house rules: Post simple rules on parking, garbage pickup schedules, quiet hours, occupancy, and respectful use of outdoor spaces. Include an emergency contact card.
• Noise and events: Prohibit parties and require pre-approval for any gatherings. Consider non-recording sound level monitors if appropriate.
• Parking clarity: Provide a map or photo that shows exactly where guests should park and turn around.
• Screening and vetting: Use platform verification tools, minimum-stay requirements, and a written rental agreement for direct bookings.
• Safety and cleanliness: Test detectors, check fire extinguishers, and keep a tidy property to avoid pest concerns.
• Insurance and documentation: Maintain proper coverage and keep logs of incidents, guest communications, and repairs.

Due diligence roadmap for a specific property

Follow this sequence to reduce surprises and speed up approvals:

1. Confirm zoning and any HOA or deed restrictions.
2. Verify septic, well status, and access or easements if rural.
3. Ask city or county staff about required permits, inspections, and fees.
4. Register for state tax accounts and any local lodging tax accounts.
5. Bind appropriate STR insurance and complete safety items.
6. Build a market analysis and cash-flow model with taxes, fees, utilities, cleaning, and reserves.
7. If needed, engage a local attorney or CPA for compliance and tax classification questions.

When to call local experts

A short call with the right office can answer most questions up front.

• City of Hot Springs: City Clerk and Planning and Zoning for zoning, licensing, parking, and signs inside city limits.
• Fall River County: Planning and Zoning for land-use, Treasurer or Auditor for local tax registration, and Environmental Health for septic or well questions.
• South Dakota Department of Revenue: State sales and lodging tax registration, rates, and filing.
• Hot Springs Fire Department or building official: Safety items and occupancy guidance.
• CPA and insurance agent: Income classification, deductions, and proper STR insurance.
• STR data services: Revenue and occupancy benchmarking to test your pro forma.

Getting these answers before you list helps you operate confidently, keep neighbors happy, and protect your investment. If you want help evaluating which Hot Springs or Fall River County properties fit your STR strategy, or you need introductions to the right local offices, reach out. Schedule a conversation with Joel Hawkins to talk through options and next steps.

FAQs

Are short-term rentals legal in the City of Hot Springs?

• It depends on your zoning district and any overlay or historic constraints; confirm with the City Clerk and Planning and Zoning whether your address allows STRs or requires a conditional use permit.

What permits do I need to host in Fall River County?

• You will verify zoning with County Planning and Zoning, address any septic or well requirements, and set up state and any local tax accounts; county staff can explain permits, inspections, and fees.

Do I have to collect South Dakota sales or lodging taxes on my STR?

• Yes, register with the South Dakota Department of Revenue for sales and lodging-related taxes and confirm any city or county lodging tax; you remain responsible for taxes not collected by a platform.

How many guests can I host in a Hot Springs STR?

• Occupancy is set by local code or fire guidance; if no formal limit applies, use a conservative policy tied to the number of legal bedrooms and safe egress.

Are noise and parking rules enforced for STRs?

• Yes, nuisance ordinances and parking rules can apply; set clear quiet hours and parking instructions, and respond quickly to any complaints.

What happens if I operate without required permits or tax accounts?

• Noncompliance can trigger fines, a cease-and-desist order, or loss of future permits; confirm requirements with local offices before listing.