HostReadyIf you own a property in Palm Beach and you have been eyeing the short-term rental market, the town's answer is still no. Short-term rentals are strictly prohibited under Town of Palm Beach Code Section 134-886, and that ban is not going away. But a new Florida state law taking effect July 1, 2026, quietly carves out a grace period for property owners with recent building permits, and it could matter to a narrow slice of hosts caught between a new permit and a local opt-out ordinance.
What the New State Law Actually Does
Florida's 2026 legislative session wrapped up with a provision that addresses a specific and painful scenario: a property owner pulls a building permit, invests in a new construction or major renovation with plans to operate a short-term rental, and then a local government passes an opt-out ordinance that bans STRs before the project is even finished. Under the new rule, properties issued a building permit on or after July 1, 2026, within four years before an opt-out ordinance takes effect may still apply for and receive an exemption from those STR restrictions.
The provision is designed to protect underwriting. Lenders and investors making decisions based on projected STR income need some assurance that a local ban passed after the permit was pulled will not immediately kill the revenue model. The four-year window gives those projects a path to apply for an exemption rather than being wiped out overnight by a new ordinance.
Why This Does Not Change Much for Palm Beach Hosts
Here is the catch for anyone in Palm Beach specifically: the town's prohibition is already on the books and has been for years. The new state exemption applies to properties with permits issued on or after July 1, 2026, in places where an opt-out ordinance takes effect after that date. Palm Beach's ban is not new. It is an existing, long-standing restriction, and the town enforces it aggressively.
Under the current code, residential use in Palm Beach requires an intended occupancy period of not less than three months for any one individual or family. There is a narrow exception: occupancy of less than three months is allowed no more than three times per calendar year. That is not a short-term rental business model. That is a strict long-term rental market with a very limited carve-out for occasional shorter stays.
The town does not treat this as a gray area. Code violations during business hours can be reported to Code Enforcement at 561-838-7080. After-hours violations go to the Police non-emergency line at 561-838-5454. Enforcement is classified as high, and the permit status for STRs in Palm Beach is listed as a moratorium.
What Hosts and Investors Should Watch
The new state exemption is most relevant to operators in Florida markets where a local government is considering or has recently passed an opt-out ordinance, and where a building permit was issued close to or after July 1, 2026. If you are in one of those markets, the four-year window means you have a legal basis to apply for an exemption before the ban fully forecloses your options.
For Palm Beach specifically, the practical checklist looks like this:
- STRs remain prohibited. Do not list your property on Airbnb or any other platform expecting to operate legally under current rules.
- Long-term rentals are permitted, but if you own more than one rental unit in town, you are required to obtain a Business Tax Receipt.
- The three-times-per-year exception for stays under three months is narrow and does not constitute a short-term rental operation in any commercial sense.
- If you have a building permit issued on or after July 1, 2026, and a new opt-out ordinance is passed in a different Florida market where you also own property, the new state exemption may apply. Consult a local attorney before assuming it does.
- Tax obligations still apply. Even in a restricted market, lodging tax requirements remain in force for any permissible rental activity.
The Bigger Picture in Tallahassee
The 2026 Florida legislative session was a busy one for housing policy. The state fully funded its Sadowski Housing Trust Fund programs for the sixth consecutive year, with $165.7 million for the State Housing Initiatives Partnership program and $70.8 million for the State Apartment Incentive Loan program. The session also passed Live Local 4.0 updates and a major YIGBY expansion. The STR building permit exemption is a smaller provision, but it signals that the Legislature is still actively managing the tension between local opt-out authority and property owner investment expectations.
For Palm Beach hosts, the bottom line is unchanged: the ban is real, enforcement is active, and the new state law does not offer a workaround for an existing prohibition. Watch for any future changes to state preemption rules, but do not bet your investment on a loophole that does not apply here.
For the complete Palm Beach compliance guide including tax calculator, checklist, and daily monitoring, see Palm Beach, FL STR Regulations.