Short-Term Rentals on St. Croix: What Buyers Should Know
- Kelly Pugh
- Jan 12
- 4 min read
Updated: Jan 16
As a real estate agent here on St. Croix, one of the most common conversations I have with buyers especially those exploring investment opportunities, is about short-term rentals. With the rise of vacation rental platforms and the continued growth of tourism in the U.S. Virgin Islands, short-term rentals (STRs) have become a major part of the real estate landscape. But before you decide to purchase a property with the intention of offering it as a vacation rental, it’s essential to understand the legal requirements, financial obligations, zoning considerations, and the overall process of owning and operating an STR in the USVI.
My goal is always to guide buyers through these details so they can make informed decisions because in the USVI, STRs come with excellent income potential, but only if you understand the rules that govern them.
Understanding Short-Term Rentals in the USVI
In the USVI, short-term rentals are generally considered lodging rented for less than 90 days. Rentals under 30 days also require full STR licensing and tax compliance, so owners must be especially careful with shorter stays.
The STR market is strong in the USVI. In recent years, short-term rentals have generated significant revenue for the territory, tens of millions of dollars annually, reflecting high visitor demand. St. Croix, with its beaches, cultural sites, and more relaxed energy compared to St. Thomas or St. John, continues to attract travelers who prefer staying in private accommodations.
But unlike many mainland markets, the USVI has a structured regulatory environment designed to protect the tourism sector and ensure consistent safety and tax compliance. As a buyer, understanding these requirements upfront is crucial.
Licensing Requirements: What Every Buyer Must Know
To legally operate a short-term rental on St. Croix, you must obtain a business license through the Department of Licensing and Consumer Affairs (DLCA). This applies whether you are renting a single room, a condo, or an entire villa.
There are two license categories:
Short Term Rental A: For properties accommodating five or more guests. Annual fee: $260
Short Term Rental B: For properties accommodating up to four guests. Annual fee: $195
The licensing process requires:
Zoning approval
A police record
A fire safety inspection
Tax clearance from the Bureau of Internal Revenue (VIBIR)
Identification of a local resident responsible for the license
This process can take time, so buyers planning to purchase an STR property should start early or ensure the property already holds a valid license.
Note: Prospective owners should consult the DLCA STR licensing page directly for the latest rules and fees.
Hotel Room Occupancy Tax and Other Taxes
The standard Hotel Room Occupancy Tax rate is 12.5%; some legacy agreements may reflect 10%, but owners should confirm current rates with the Bureau of Internal Revenue. Some platforms, most notably Airbnb, have agreements with the territory to collect and remit this tax automatically. Others do not, meaning the owner is responsible.
As a STR operator, you must file Form 722-VI monthly and remit the required tax. In addition, STR income may be subject to:
Gross receipts tax
Territorial income tax
Buyers unfamiliar with USVI taxation should consult a local tax professional. Many new STR owners underestimate ongoing tax obligations, which can impact profitability.
Zoning and Environmental Considerations
Zoning is one of the most overlooked aspects of STR ownership in the USVI but it’s also one of the most important.
Some communities or areas restrict or prohibit STRs. Homeowners associations (HOAs) may also limit or ban vacation rentals, particularly in condo communities. Before making an offer, I always verify local zoning rules and association bylaws so buyers avoid unexpected limitations.
Environmental regulations also play a role, especially for properties near the shoreline, wetlands, or mangrove systems. The Department of Planning and Natural Resources (DPNR) oversees Coastal Zone Management (CZM), and properties near wetlands or shoreline may require CZM permits, and setbacks can affect what improvements are allowed.
These regulations exist to protect St. Croix’s natural resources, but they can influence your ability to modify a property or expand rental operations.
Choosing the Right Type of Property
Different buyers have different goals, and St. Croix offers a range of property types that serve the STR market well. Each comes with distinct advantages and considerations.
Condos
Pros:
Typically located in secure, amenity-rich communities
Lower maintenance responsibilities
Highly attractive to vacationers
Easier “turn-key” rental management (often includes on-site or established property management, maintenance, and housekeeping coordination)
Cons:
HOA rules may restrict STRs
High monthly association fees
Shared decision-making for exterior changes
Single-Family Homes
Pros:
Flexibility in design, renovations, and use
More space and privacy
Potential to create dual-unit income (main house + apartment)
Cons:
Higher upkeep
Higher utility costs
Fewer built-in amenities compared to condo communities
Buyer Best Practices: What Successful STR Owners Do Differently
Over the years, I’ve noticed that STR buyers who succeed tend to approach the process strategically. Here’s what I encourage every client to consider:
1. Confirm STR potential before making an offer.
Neighborhood rules, zoning, and historical rental performance matter.
2. Set realistic expectations for the buying process.
Closing timelines in the USVI are slower than on the mainland. Appraisals can take up to a month, and the average closing period is roughly 75 days if you aren't able to purchase with cash.
3. Plan for management.
If you won’t live on-island, a property manager is essential. This protects both your guests and your investment.
4. Understand the tax implications.
Predictable, monthly compliance keeps your rental legal and profitable.
5. Evaluate the community lifestyle you want.
St. Croix is distinct from St. Thomas and St. John, each appealing to different vacation markets. Knowing your target demographic is key to maximizing occupancy.
Short-term rentals offer excellent opportunities here on St. Croix, whether you’re seeking an income-producing asset, a part-time vacation home, or a long-term investment strategy. But success comes down to one thing: understanding the territory’s regulations and market conditions before you buy.
If you’re exploring the idea of owning a short-term rental on St. Croix and want guidance grounded in experience, not just online research, I’m here to help you evaluate properties, navigate regulations, and identify the right opportunities for your goals.
Owning a piece of paradise is possible. With the right preparation, it can also be profitable.
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