Say you're touring a shingled cottage a few streets off Ocean Avenue and the seller hands over a folder of rental calendar screenshots. The place has booked solid every July and August for six seasons running. You start penciling that income into your offer. Before you go further, there's a fact about Kennebunkport that the listing photos won't tell you: the house can change hands in an afternoon, but the paperwork that lets it operate as a short-term rental does not automatically come with it.
That distinction is the whole story for anyone buying, selling, or holding a rental property in this town right now. The mechanism that decides whether a property can legally earn rental income has almost nothing to do with square footage, view, or even the seller's track record. It has to do with a licensing system that is tied to the address and the current owner, not the deed.
The License Lives With the Ordinance, Not the Deed
Kennebunkport's short-term rental rules sit in Chapter 129 of the town code, adopted after voters approved regulation in June 2021. The ordinance is explicit on the point that trips up most buyers: a short-term rental license issued under the chapter is not transferable to a new owner or a new location. A change of ownership requires a fresh license application, with a narrow exception carved out for what the code calls a "permitted transfer" to a qualifying transferee.
In plain terms, the seller's rental history is evidence you can point to, not an asset you inherit. If you close on a property that currently holds a valid STR license, you still have to apply for your own license under your own name after the sale records. That application then competes for space in a capped pool, the same pool everyone else in town is drawing from.
The 2026 Window Is Already Closed
Here is where timing turns into a real financial constraint rather than a formality. The number of new short-term rental licenses issued each year is set annually by the Board of Selectmen, using a formula tied to a percentage of the total residential dwelling units in Kennebunkport. Applications and renewals go through the town's portal on a set annual cycle.
As of this writing, the town's own planning and development page states that the short-term rental portal is closed, with no new applications or renewals accepted for the 2026 calendar year. That means a buyer closing on a Kennebunkport property today, mid-cap-cycle, cannot simply file paperwork and start renting. If the property doesn't already carry a license that survives the transfer test, the earliest realistic path to legal short-term rental use is the next application window, whenever the town reopens it.
Two more wrinkles change the math depending on where in town the property sits. The Goose Rocks Beach neighborhood is exempt from the townwide license cap entirely, a carve-out the ordinance attributes to the area's long history of short-term rental use, though properties there still need to obtain the annual license. And for multi-unit lots, the ordinance caps new licenses at no more than two units or 50 percent of the dwellings on that lot, whichever number is larger, which matters directly for anyone eyeing a small multifamily property with rental income in the plan.
What a 2024 Court Decision Changed About Eligibility
If you're trying to gauge how strictly the town enforces this system, a Maine Supreme Judicial Court case from late 2024 is worth knowing. In 15 Langsford Owner LLC v. Town of Kennebunkport, decided in December 2024, an ownership group had acquired eleven condominium units in town between late 2020 and mid-2021 and began renting them short-term. After the STR ordinance passed, the town's code enforcement officer denied the group's license applications, arguing the units were functioning more like a hotel or inn than residential dwellings. The Superior Court disagreed, ruling the units were legally existing residential dwelling units eligible for licenses under the ordinance, and the Maine Supreme Judicial Court affirmed that outcome.
For a buyer, the case is a reminder that a property's legal classification history carries weight independent of bedroom count or curb appeal. A unit with a murky use history, or one the town has previously questioned, is a different due-diligence problem than a straightforward single-family cottage with a clean record. Ask for the classification history, not just last summer's booking calendar.
What Actually Carries Over at Closing
| Carries over automatically | Does not carry over automatically |
|---|---|
| The deed and title to the property | The seller's short-term rental license |
| Existing zoning classification of the structure | Any presumption of eligibility if use history is disputed |
| Any recorded shoreland zone designation | A guaranteed spot in the current year's license pool |
| Property tax history | The seller's rental income, absent a licensed, transferable status |
The Other Number That Changed This Year
Rental licensing isn't the only friction that shifted recently. Since November 1, 2025, Maine's real estate transfer tax has moved from a flat rate to a two-tier structure. Sales up to a million dollars still carry the long-standing rate of $2.20 per $500 of value, split between buyer and seller. Above a million dollars, an additional $3.80 per $500 applies to the portion over that threshold, a change made under state law and administered by Maine Revenue Services.
Run the numbers on a $3 million sale and the shift is stark. Under the old flat rate, that transaction generated roughly $13,200 in transfer tax. Under the current tiered structure, the same sale generates closer to $28,000. Kennebunkport's waterfront and near-water inventory clears the million-dollar threshold often enough that this isn't an abstract policy footnote. It's a closing-cost line item that both sides should see modeled well before the purchase and sale agreement is signed, not discovered on the settlement statement.
Before You Write an Offer or List a Rental Property
- Ask the Town's Planning and Development office directly whether the specific address currently holds a valid, active short-term rental license, and whether that license would qualify as a permitted transfer.
- Confirm whether the current STR application and renewal portal is open before assuming any timeline for legal rental use after closing.
- If the property is in Goose Rocks Beach, confirm the neighborhood's cap exemption still requires the standard annual license.
- For any multi-unit lot, check the per-lot license limit against how many units you intend to rent.
- If the sale price is likely to land above a million dollars, ask your closing attorney to model the transfer tax under the current tiered rate so there are no surprises on the settlement sheet.
- Request the property's use classification history, not just its rental income history, especially for condominium or multi-unit purchases.
A Few Direct Questions
If a property already has a valid license, does buying it guarantee I keep it? No. Under Chapter 129, the license is tied to the current owner and location and does not transfer automatically. A permitted transfer to a qualifying transferee is the narrow exception, not the default.
Does the Goose Rocks Beach exemption mean no license is needed there? No. Properties in that neighborhood are exempt from the townwide numerical cap but still must obtain the annual short-term rental license.
Does the new transfer tax tier apply to every sale? No. The additional $3.80 per $500 only applies to the portion of a sale price above one million dollars. Sales below that threshold continue at the existing flat rate.
Rental income potential in Kennebunkport is real, and the town's coastal draw isn't going anywhere. But the paperwork that turns a cottage into a legal income property runs on its own calendar, its own cap, and its own case law, none of which show up on a listing sheet. If you're weighing a purchase or a sale where rental income is part of the plan, Bedard Homes & Realty can walk through the licensing status, the timing, and the closing math with you before you write the offer, not after.
