How to Get a Short-Term Rental Permit in Austin, Texas

Short-term rentals (STRs) can be a great way to generate semi-passive income, but in Austin, they come with strict regulations. Whether you’re listing your home on Airbnb, Vrbo, or another platform, you’ll need to get the proper STR permit to stay compliant and avoid hefty fines. Here’s a step-by-step guide to legally operating a short-term rental in Austin.

Step 1: Determine Your STR Type

Austin categorizes STRs into three types:

- Type 1: Owner-occupied or part-time rentals (like renting out a spare room or guest house while you live on the property).

- Type 2: Non-owner-occupied STRs (investment properties that are exclusively short-term rentals; permits are very limited).

- Type 3: Multi-family units, such as condos and apartments, used as STRs.

Before applying, check which category your property falls under to understand the regulations that apply to you.

Step 2: Verify Zoning & Eligibility

Not every property in Austin is eligible for an STR permit. Use the **City of Austin’s Zoning Guide** or consult with a real estate expert to confirm your eligibility. Key restrictions include:

- Type 2 STRs are banned in residential zones.

- Some HOAs prohibit STRs altogether.

- You must be up-to-date on property taxes before applying.

Step 3: Gather Required Documents

Before applying for your STR permit, prepare the following:

- Proof of property ownership (deed or tax document).

- Floor plan of the rental space.

- Certificate of occupancy (for Type 3 rentals).

- Hotel Occupancy Tax (HOT) account number.

- Proof of liability insurance (minimum $1 million coverage).

- A local contact who can respond within two hours in case of issues.

Step 4: Submit Your STR Permit Application**

Once you’ve gathered the necessary documents, apply through the City of Austin’s Development Services Department. Fees vary but typically range from $568 to $650, depending on your STR type.

After submission, the city will review your application and may conduct an inspection to ensure compliance with safety and occupancy regulations.

Step 5: Pay Hotel Occupancy Taxes & Stay Compliant

Austin requires STR owners to collect and remit a 11% Hotel Occupancy Tax (HOT) (in addition to the state’s 6% tax). Platforms like Airbnb and Vrbo may handle this for you, but you’re responsible for ensuring it’s paid.

To maintain compliance, STR owners must:

- Renew permits annually.

- Ensure guest safety by following fire code regulations.

- Avoid nuisance complaints from neighbors.

What Happens If You Operate Without a Permit?

Unlicensed STRs can face fines up to $2,000 per violation per day, and the city is ramping up enforcement with new technology to track illegal listings. Getting properly permitted now can save you major headaches later.

Final Thoughts

While Austin’s STR permitting process can be complex, following these steps will keep your rental legal, profitable, and hassle-free. If you need help navigating the Austin real estate market, reach out to Open House Austin—we’re here to guide you every step of the way!

Source: City of Austin