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Austin STR ordinance

Austin’s short-term-rental rules, in plain English.

Austin rewrote its short-term-rental rules in 2025, and the platform-enforcement piece landed in July 2026. Here is what the City of Austin actually requires now — licensing, the three types, density, occupancy and taxes. It is a guide, not legal advice; confirm your address with the city.

Two things changed the picture. In February 2025 the City Council made short-term rentals an accessory use allowed in every zoning district, provided the home holds a valid city operating license. That ended the old fight over which zones allowed rentals. In October 2025 the rest of the overhaul took effect: two-year licenses, lighter application paperwork, and new limits on how many units one operator can run.

Then on July 1, 2026, the rules for the booking platforms kicked in. Airbnb, Vrbo and the others now have to display a license field and remove listings the city flags as unlicensed. In short: the license is the thing that matters, and operating without one is harder to hide than it used to be.

You need a city license

Every owner or operator of a short-term rental inside Austin must hold a current city license, one per rental. A short-term rental is a home (or part of one) rented for less than 30 consecutive days. The license runs two years from the date it is issued and renews.

  • A certificate of occupancy and proof of insurance are no longer required to apply or renew (that changed in October 2025).
  • Tenants may operate a rental with the landlord’s written permission.
  • Licenses are non-transferable — they do not pass to a buyer with the house.
  • You must name a local contact who lives in the Austin metro (Travis, Williamson, Hays, Bastrop or Caldwell County) and can respond to problems.
  • Neighbors are notified at initial licensing and at every renewal.

The three license types

Austin issues the license by type, based on who lives there and what kind of building it is. The city publishes a separate application form for each. These are the categories as they appear on the city’s forms and in its open-data license file; the city does not publish one-line legal definitions, so confirm which type fits your property with Licensing Intake (512-974-9144) before you apply.

Type 1 — owner-occupied

The rental is the owner’s principal residence, or a unit tied to it. The city’s file also shows Type 1-A and Type 1-Secondary variants for owner-occupied situations. This is the largest owner-occupied group in Austin.

Type 2 — not owner-occupied (residential)

A residential home rented short-term that is not the owner’s principal residence. “Type 2 Residential” is the single most common license type on file. A separate Type 2 Commercial form covers residential rentals in a commercial setting.

Type 3 — multi-family

A short-term rental that is part of a multi-family building (an apartment or condo complex). Type 3 applications take longer to process than single-family ones.

Not sure which one is yours? The eligibility checker walks you to the right type, or browse what is already licensed in the registry.

Density limits: how many you can run

Since October 2025 the city caps how many short-term rentals one person may operate on a site. This is the rule that most often surprises investors.

Where the home isHow many STR units one person may run
Single-family siteUp to two STR units on one site. More are allowed only if they sit at least 1,000 feet apart.
Mixed-use site (4+ homes plus a commercial use)The greater of one unit or 25% of the units.
Multi-family siteThe greater of one unit or 10% of the units.
Two single-family STR units on one site is the ceiling unless additional units are at least 1,000 feet apart. On larger residential and mixed-use sites the cap is a percentage of the units.

Operating rules & jurisdiction

Where the rules apply

  • Full-purpose jurisdiction (most of Austin): license required, and city hotel tax applies.
  • Limited-purpose jurisdiction: a license is required, but the city hotel tax does not apply.
  • Extraterritorial jurisdiction (ETJ): no city license and no city hotel tax. State tax can still apply.

If you are near the city edge, confirm which jurisdiction your parcel sits in — it changes both the license and the tax.

Fees & timing

  • New license: $736.60 ($642.00 license fee + $94.60 notification fee).
  • Renewal: $369.60 ($275.00 renewal fee + $94.60 notification fee). You can renew up to 60 days early.
  • Processing: single-family 6–8 weeks, multi-family 8–10 weeks for new applications.
  • An expired license can be extended if it is under 30 days past expiration; otherwise you reapply.
System change: the city paused new applications, renewals and HOT payments from Nov 16 to Dec 3, 2026 while moving to a new licensing system that launches Dec 4, 2026. Check the city site for the current portal before you apply.

Hotel Occupancy Tax (HOT) & state tax

Short stays are taxed like hotel stays. The total a guest pays in Austin is 17% on the room charge:

TaxRateWho it goes to
City of Austin hotel occupancy tax9%City of Austin
City venue project tax2%City of Austin (venue project fund)
State of Texas hotel occupancy tax6%State of Texas (remitted separately)
Combined17%—
  • Since April 1, 2025, booking platforms (Airbnb, Vrbo) must collect and remit the tax for bookings made through them.
  • You still file a quarterly report showing what each platform collected, and a zero report for quarters with no rentals.
  • For bookings taken off-platform (your own website, direct), you collect and remit the tax yourself.
  • Limited-purpose and ETJ properties are not subject to the city tax; state tax may still apply.

City rate confirmed on the City of Austin Financial Services hotel-tax page and the FY2025-26 approved tax-rate notice. Rates can change each fiscal year — verify the current rate before you file.

Sources (City of Austin, checked 2026-11-09):