If you are shopping luxury mountain property on the Highlands-Cashiers plateau with any intent to operate a short-term rental, even a few weeks a year of income to offset carrying costs, there is one regulatory split that should shape your buying decision before almost any other factor. A home inside the Town of Highlands faces an enacted short-term-rental phase-out with a September 2027 deadline. A comparable home in unincorporated Cashiers, which is governed by Jackson County, does not. That divergence is the single most consequential variable on the plateau in 2026, and it is the one I make sure my clients understand before any plateau-area offer.

Two important caveats up front. The Highlands deadline is enacted but it is being challenged in court, so the outcome is genuinely uncertain. And in both jurisdictions an HOA covenant can prohibit short-term rentals even where the town or county allows them. Both points are covered below. Rules in this space change, so treat every figure here as a starting point to verify at the source, not a substitute for pulling the current ordinance yourself.

The Highlands amortization timeline

On September 19, 2024, the Town of Highlands Board of Commissioners voted 4 to 1 to amortize short-term rentals out of its R-1 and R-2 zoning districts, the residential zones that cover the bulk of the town's housing stock. Short-term rentals operating in those zones as of September 15, 2022 are treated as nonconforming uses and are permitted to continue until September 15, 2027, after which short-term rentals are not allowed in R-1 or R-2 and existing ones must be discontinued. New short-term rentals in those zones are not being approved. (Source: The Highlander, "Highlands commissioners approve amortization".)

That timeline is not settled. Property owners and the group Save Highlands challenged the amortization in court, and on March 11, 2025 a Macon County judge denied the Town's motion to dismiss, allowing the case to proceed. The Institute for Justice, which has litigated similar amortization schemes elsewhere in North Carolina, has publicly urged the Town to abandon the approach. As of this writing the litigation is active and unresolved. (Sources: Save Highlands; Institute for Justice.)

What that means practically for a buyer:

  • A Highlands-town-limits property currently generating short-term-rental income could lose that income stream after September 15, 2027 if the ordinance survives the court challenge.
  • If the courts strike the amortization down, the income stream may continue. Nobody can promise you which way it goes, so you are underwriting a property whose rental status is genuinely contested.
  • The right move is to treat the rental income as uncertain rather than guaranteed in either direction, and to read the current ordinance and the live case status before committing.

The Jackson County / Cashiers contrast

Cashiers itself is unincorporated. It is not a town with its own zoning ordinance; it is a community within Jackson County. Jackson County, the controlling jurisdiction for unincorporated Cashiers parcels, does not have a comprehensive county-wide short-term-rental ban as of this writing. Jackson County does levy an occupancy tax on short-term lodging, and that rate increased to 6 percent effective July 1, 2025 (up from 4 percent). Confirm the current rate and rules with the Jackson County occupancy-tax office before you underwrite. (Source: Smoky Mountain News, "Jackson increases occupancy tax rate".)

So a Cashiers-area buyer can, under current county rules, operate a short-term rental on a parcel ten minutes from a Highlands-town-limits property where the same use is being phased out. Same plateau, same elevation, same buyer pool, different regulatory ceiling.

One caveat inside Jackson County: the Town of Sylva, the county seat, restricted new short-term rentals to accessory uses back in August 2022, with a grandfather clause for rentals that had already paid occupancy tax. That is a town-specific rule inside Jackson County; unincorporated Cashiers is not subject to it. The point is that jurisdiction matters down to the parcel: verify whether a given property sits inside a town boundary or in the unincorporated county before you assume anything. (Source: The Sylva Herald, "Sylva town board lays out rules for short-term rentals".)

The HOA layer overrides both

This is the part most plateau-buyer content skips. Even where the county allows short-term rentals and the town allows short-term rentals, an HOA covenant can still prohibit them, and recorded covenants are enforceable in North Carolina.

On this plateau the HOA layer is heavy. The trophy private clubs commonly restrict short-term rentals as a matter of community character. That includes the long-established golf-and-lake clubs and the pure-residential clubs around Highlands and Cashiers. I am not going to list each club's covenant from memory, because these documents are amended and they vary by sub-development. The reliable move is to pull the recorded CC&Rs for the specific community and read the rental provisions yourself.

If short-term-rental income is central to your plan, the parcels worth a closer look on the plateau tend to be in less-restrictive, unincorporated Jackson County settings or in communities that run an established, covenant-permitted rental program. Verify the rental rules community by community rather than assuming a whole development allows or forbids it.

What this means for the buying decision

If short-term-rental income is a material part of your plateau-investment thesis, the cleaner regulatory path today is unincorporated Cashiers / Jackson County rather than Highlands town limits, paired with an HOA covenant that actually permits rentals. Same elevation, same lifestyle, same demand profile, but you are not buying into a use that is currently being phased out and litigated.

If short-term-rental income is not material, say you are buying a luxury second home that may occasionally host family with no rental-income underwriting, then both Highlands and Cashiers properties remain viable. The amortization deadline matters far less when there is no income stream to lose.

The in-between case, buyers who would like to keep rental optionality without committing to it, is common. There the conservative default is to favor the unincorporated, covenant-permitted path for the optionality, even if you would otherwise prefer a Highlands address. The ten-minute drive between the two communities is a small lifestyle cost; the regulatory difference is structural.

What to verify before making an offer on either side

  1. Pull the parcel's exact jurisdiction and zoning. Is it inside Highlands town limits (and if so, which zone, R-1 / R-2 / other), inside another town like Sylva, or in unincorporated Macon or Jackson County? This single fact drives everything else.
  2. Pull the HOA CC&Rs and read the rental provisions. The town or county rule is the floor; the recorded covenant is the ceiling.
  3. For Highlands town-limits properties, confirm the live ordinance and litigation status. Read the current Town of Highlands ordinance and check where the Save Highlands case stands before you assume the September 2027 deadline either holds or falls.
  4. For Cashiers / Jackson County properties, confirm the current county position and occupancy-tax rate. The rate rose to 6 percent in July 2025; verify it and any new ordinance language with the county directly.
  5. Get the rental math from the actual rules, not the listing copy. Underwrite the income only after you have read the zoning, the covenant, and the current ordinance.

The property-tax math

Highlands sits in Macon County. Per the North Carolina Department of Revenue 2025-2026 county tax rate schedule, Macon County's county rate is $0.27 per $100 of assessed value (an effective 0.27 percent), among the lowest county rates in the state. On a $1,000,000 assessed home that is roughly $2,700 a year in county tax before any town or special-district levy. Cashiers sits in Jackson County, where the county rate is $0.31 per $100 (0.31 percent) on the same schedule, slightly higher. Town and fire-district levies can stack on top of either, so confirm the full rate for the specific parcel.

For a buyer weighing Highlands against Cashiers, the Macon County rate is one legitimate reason to favor Highlands despite the rental phase-out. The other is walkability to downtown Highlands, which is a genuine lifestyle differentiator. Neither changes the rental analysis above; they sit alongside it.

The fuller picture on plateau-club carrying costs and a community-by-community comparison lives in my Western NC communities reference.

How I help

For plateau-area, rental-minded purchases, the regulatory diligence is the most important step before you fall in love with a property. I read the zoning designation, the recorded CC&Rs, and the current ordinance and case status alongside my clients before any offer. Considering Highlands or Cashiers and want help thinking it through? Text or call me at (828) 371-6980. Let's just have a conversation. No pressure, no fine print. Brandi Rininger, eXp Realty.

I have also put together a Western NC Short-Term Rental Investor Playbook covering the regulatory picture county by county, gated-community rental rules, illustrative pro-formas, and a diligence checklist. Text the word BOOK to (828) 371-6980 and I will send the printable. You can also start with the WNC short-term-rental investor reference.

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