Newport, RI Airbnb & Short-Term Rental Regulations 2026

Regulation Overview

Historic Gilded Age mansion town and top New England coastal tourist draw; strong nightly rates but STR use is legally confined to a handful of commercial zones, so most housing stock cannot be used as a whole-home investment rental.

STRs are prohibited in all nine of Newport's residential zoning districts (most of the city), permitted only in General Business/Waterfront Business/Commercial-Industrial zones or via a narrow owner-occupied 2-room exception.

Rhode Island State Law

State preemption: No broad state preemption found; RI sets a mandatory statewide STR registration floor via DBR, but municipalities (Newport, Narragansett, New Shoreham) layer their own permits/zoning on top, which is being actively litigated on home-rule grounds in Narragansett.

Statewide rules: Any STR listed on a third-party hosting platform (Airbnb, Vrbo, etc.) must register with the RI Dept. of Business Regulation (DBR) under R.I. Gen. Laws § 42-63.1-14 and Reg. 230-RICR-30-20-4. Fee is $25/year with no owner-occupancy or seasonal exemption; apply via elicensing.ri.gov. The DBR registration number and expiration must appear on the platform listing. ADUs have been barred from STR/transient use since June 25, 2024. Civil penalties for failure to register: $250 (first 30 days), $500 (31-60 days), $1,000 (60+ days).

Taxes: Through 12/31/2025: room-only rentals pay 7% state sales tax + 5% state hotel tax + 1% local hotel tax (13% total); whole-home STRs pay 7% sales tax + 1% local hotel tax (8% total). Effective 1/1/2026, the local hotel tax doubles to 2% and a new 5% tax on whole-home STRs is added, bringing both room and whole-home rentals to a combined 14% state+local lodging tax. Newport separately levies its own 6% municipal rooms tax on top of state rates.

2025–2026 legislation: The RI lodging-tax restructuring effective January 1, 2026 (new whole-home STR tax + doubled local hotel tax) is the main dated 2026 change found. No additional statewide STR-preemption or registry bill beyond the existing DBR registration law was identified.

Newport Rules

Governing jurisdiction: City of Newport (Zoning, Building, Collections & Fire departments), plus RI DBR state registration.

• Newport bans short-term rentals outright in all nine residential zoning districts, restricting whole-home STR investment to General Business, Waterfront Business, and Commercial-Industrial zones.
• An owner-occupied exception lets a resident rent up to 2 rooms to 4 guests by right, but only while they live in the unit for the entire rental period.
• The Certificate of Transient Guest House Facility costs $15 to file, then $500-$1,000 per year depending on use type, and is non-transferable on sale.
• Properties hosting 6-16 guests must add fire alarm and sprinkler protection before approval.
• Newport layers its own 6% municipal rooms tax on top of the state's 2026 combined 14% lodging tax, one of the higher total tax burdens in the region.
• Both state (RI DBR, $25/yr) and city registration are required; failure to register either can lead to civil fines and court action.
• Because most residential neighborhoods are off-limits, investors typically target commercial-zoned properties near the harbor/downtown rather than traditional single-family homes.

Not confirmed

We could not verify the following against a primary source. Confirm each with the jurisdiction before you rely on it:

• Exact code section numbers for the zoning prohibition were not independently verified beyond secondary summaries.
• Whether any residential-zone STRs are legally grandfathered was not confirmed.

Buyer Due Diligence Checklist

Before you write an offer on a short-term rental here:

• Get a written determination from the governing jurisdiction for the specific parcel. Verbal guidance from anyone else is not diligence.
• Establish which jurisdiction governs — city, town, village and unincorporated county can differ sharply within a few miles.
• Ask whether an existing permit transfers on sale. In many markets it does not, and a listing marketed as a running short-term rental may convey nothing of the sort.
• Read the HOA or condo covenants during your inspection period. Private covenants bind even where the jurisdiction permits the use.
• Model revenue against the legal occupancy cap, not the bedroom count.

Frequently Asked Questions