Austin Short Term Rental Laws 2026 | License, Fees, Tax

Short term rentals are legal in Austin, Texas, as long as you hold a City of Austin operating license. Since the 2025 rewrite of the rules, a short term rental (any rental of a home or part of a home for less than 30 consecutive days) is an allowed accessory use in every residential zoning district. In exchange, the city now caps how many units one person can run, requires a local contact who can respond within two hours, and, since July 1, 2026, can order Airbnb, Vrbo and other platforms to take down unlicensed listings within 10 days.

This guide covers the Austin STR license and what it costs today, what changed in the 2025 ordinance, the platform rules, local contact and noise requirements, the hotel occupancy tax, enforcement and fines, and how HOAs fit in. Every rule below comes from the City of Austin's own pages and the ordinance text, checked in October 2026. Rules change, so confirm your specific property with the city before you buy or list. This is general information, not legal or tax advice.

Austin Short Term Rental Rules at a Glance (2026)

Rule	What applies in Austin today
Is a short term rental allowed?	Yes, as an accessory use to any residential use in all zoning districts, with a valid operating license
Definition	Rental of a housing unit, or part of one, for less than 30 consecutive days
License term	Two years from the date of issue, not transferable to a new owner
New license cost	$736.60 ($642.00 license fee + $94.60 neighbor notification fee)
Renewal cost	$369.60 ($275.00 renewal fee + $94.60 notification fee)
Processing time	New: 6 to 8 weeks (single-family), 8 to 10 weeks (multi-family)
How many units	Up to two per site with three or fewer homes; other sites at least 1,000 feet apart; 10% or 25% caps on larger sites
Local contact	Must be in Travis, Williamson, Hays, Bastrop or Caldwell County and respond within two hours
Hotel occupancy tax	17% total (6% state + 11% city); platforms collect, owner files a quarterly city report
Platforms	Must show a license number field and delist unlicensed rentals within 10 days of a city notice (since July 1, 2026)
Fines	Up to $500 per offense, each day a separate offense, plus license revocation

The fee figures come from the city's Austin short term rentals page and the Code Compliance fee schedule effective October 1, 2026. If you saw $836.30 and $385.30 quoted elsewhere, those were the totals before the October 2026 fee schedule; the city's page now lists the lower amounts.

Are Short Term Rentals Legal in Austin?

Yes. For years Austin split rentals into license types by owner occupancy and zoning, and new non-owner-occupied (Type 2) licenses in residential areas were effectively off the table after a 2016 ordinance and the court fight that followed. That history is why many older articles still say Austin is "phasing out" investment rentals. That is no longer how the city describes its rules.

In February 2025, the Austin City Council adopted changes that made a short term rental an accessory use to all residential uses in all zoning districts, as long as the property has a valid operating license. The council also moved most STR rules into the business regulations in Chapter 4-23 of the City Code and required booking platforms to collect hotel occupancy tax. Then, in September 2025, the city council passed Ordinance No. 20250911-012, which repealed and replaced Chapter 4-23. Most of it took effect October 1, 2025; the platform article took effect July 1, 2026.

The result for any property owner: whether your home is owner-occupied or an investment property, the question is no longer "which license type can I get in this zone." The questions are whether you are eligible under the density limits and whether you can meet the operating rules.

What about Type 1, Type 2 and Type 3?

The labels still exist on paper. The city's printed application forms are still named Type 1, Type 2 Residential, Type 2 Commercial and Type 3, and the fee schedule lists one fee for "Type 1, 1A, 2, and 3." But the fee is the same for every type, and the city's page does not describe any phase-out or ban by type. Pick the form that matches your property, and treat any claim that "Type 2 licenses are being phased out" as outdated.

Where the Austin license applies (and where it does not)

Full purpose jurisdiction (city limits): license required, city hotel occupancy tax applies, and you need an Austin Finance Online account.
Limited purpose jurisdictions: license required, but the city hotel occupancy tax does not apply.
Extra territorial jurisdiction (ETJ): no city license and no local hotel tax. The state 6% tax still applies, and county or HOA rules may too.

Use the city's Jurisdiction Map to check an address before you buy. Plenty of "Austin" addresses in the metro are actually in Round Rock, Cedar Park, Pflugerville or unincorporated Travis County, which have their own rules.

What Changed in the 2025 Ordinance

These are the changes the city lists for property owners and tenant operators, effective October 2025:

Two-year licenses. Licenses are valid for two years instead of one.
Less paperwork. A Certificate of Occupancy and proof of insurance are no longer required for new applicants or renewals. Insurance is still smart business; it is just not a city filing requirement.
Tenants can operate. A tenant may run a short term rental with the landlord's written permission. A lessee applicant must show they pay the utilities.
Density limits by site. On a site with three or fewer housing units, one individual can operate up to two STRs. Additional rentals elsewhere must be on sites at least 1,000 feet apart.
Larger buildings. On a site with four or more units and at least one commercial use, an operator can run the greater of one unit or 25% of the units they own or lease. With no commercial use, the cap is the greater of one unit or 10%.
Local contact in the metro. The local contact must be present in the five-county Austin Metro Area.
Neighbor notice at every renewal. Notification now goes out at each renewal, not only for a new license.
Prompt response to complaints. Operators must respond to complaints and fix repeated violations, and the city can impose mitigation requirements.

Who counts as an "individual" for the density rules

The unit caps are written around individuals. Under section 4-23-31, an operator counts as an individual when the home is owned only by one or more people, by a trust where every trustee and beneficiary is a person, or by an LLC where every member is a person. The 1,000-foot spacing follows the person, not the entity name, so setting up a second LLC does not get you around it.

Existing licenses were grandfathered, with a catch

A license valid on September 30, 2025 stays good until its expiration date, and a renewal of that license is not subject to the new density limits. To keep that protection, you must apply to renew at least 30 days before the license expires. Miss it, or have the license revoked, and the new eligibility rules apply. If you hold an older license, put the renewal date on your calendar now.

How to Get an Austin Short Term Rental License

The licensing process runs through Austin Development Services, Code Compliance. You can apply online through Austin Finance Online (AFO), in person at the Permitting and Development Center at 6310 Wilhelmina Delco Drive, or by mail. Partial applications are not processed and fees are non-refundable.

Confirm eligibility. Check the jurisdiction map and the density limits above. If the property had a license revoked, it may be blocked for six or 12 months.
Gather the required documentation. Front of the owner's driver's license or government issued identification, proof of tenancy if you are a tenant, and a notarized Agent Authorization Form if someone other than the owner (for example a property manager) is applying.
Open an AFO account. It is required for anyone owning, operating, managing or collecting payment for an STR in the full-purpose city limits, and it is also where you file hotel tax reports.
Submit the application and pay. The application includes your contact person details, the platforms you will use, and a self-certified safety checklist. Pay the $736.60 by card or e-check. Fees are non refundable.
Email your ID to the city's STR documents address with the rental address if it differs from the ID.
Wait for approval. Current processing is 6 to 8 weeks for single-family homes and 8 to 10 weeks for multi-family. The city emails your license and required postings.

The application process is the same for every license type. Do not list or take bookings before the license arrives. Advertising an unlicensed short term rental is itself a violation, and every listing must show the license number.

Renewal

You can renew up to 60 days before the license expires, online, in person or by mail, for $369.60. Renewal processing is currently 4 to 6 weeks for single-family homes. Once you submit documents and pay, you can keep renting while the renewal is in the queue. If the license has already expired, you must reapply as new; if it has been expired for less than 30 days, you can ask the city for an extension instead.

Selling the property: no license transfer

Austin STR licenses are non-transferable and do not convey with a sale. A buyer must apply for a new license, and a new owner will be subject to the current density rules. If you are buying an Austin home for its rental income, do not price in the seller's license.

Austin STR Licenses: Plain Answers for Property Owners

Most questions Austin owners ask about short term rental regulations come down to a few points. Here they are in plain terms.

Every unit needs its own license. A separate license is required for each short term rental, so two units on one lot means two STR licenses and two fees.
A valid license number on every listing. Austin listings without a valid license number are treated as unlicensed properties, and the city can send the platform a delist notice.
Who can operate STRs. Natural persons, trusts made up of natural persons, and LLCs whose members are all natural persons count as individuals. An owner or a tenant can operate; a tenant operating needs the landlord's sign-off.
Single family homes vs. mixed use sites. Single family homes and other sites with three or fewer residential units allow two rentals per person. Mixed use sites with four or more residential units and a commercial use allow 25%; residential-only buildings allow 10%.
Code violations matter. If the home has open code violations, the city can require a third-party safety inspection before the city issues or renews a license.
A license lapse is costly. Let a license expire and you reapply as new, at the new-license fee and under the current density rules.
Unlicensed operators get no bookings. Platforms may not accept a fee for a rental without a valid license, which is why the vast majority of active Austin listings now display one.

The zoning side of these rules sits in the Land Development Code, and the business rules sit in Chapter 4-23, but the city's STR page is the easiest place to see the current requirements for any residential property in Central Texas that falls inside Austin city limits.

Platform Rules Since July 1, 2026

The platform article of the ordinance put duties on Airbnb, Vrbo and any other site that advertises Austin rentals or facilitates bookings:

Each listing must include the operator's license number, and platforms must provide a license display field.
When the city sends a written delist notice for an unlicensed rental, the platform must remove the listing within 10 days.
A platform may not accept a fee to facilitate a booking for a rental without a valid license.
Platforms must give hosts documentation of the hotel tax they collected, at least quarterly.

In practice this is the biggest enforcement shift in years. Before, the city had to chase each property owner. Now an unlicensed or revoked listing can simply disappear from the booking sites, along with its future reservations and reviews.

Local Contact Requirements

All STR operators must name a local contact. Under section 4-23-33, this contact must be a person (not a company), be present in Travis, Williamson, Hays, Bastrop or Caldwell County, and be authorized to make decisions about the rental and its guests.

Within two hours of being contacted about an emergency, the contact must respond (by phone or text to a city employee or neighbor; through the platform or the guest's preferred method for a guest) and take action to fix it.
If a city employee asks, the contact person must be physically at the rental within two hours.
The owner can fill the role, and you can name an alternate.
Changes to the contact must be sent to the city in writing within three business days.

"Emergency" is broad: fire, power outage, gas leak, a noise violation, a disturbance, criminal activity or a medical emergency all count. A contact person who fails to respond within two hours is a listed ground for revoking the license. For out-of-town owners, this rule is the main reason to hire a local property manager.

Noise, Guest Rules and Occupancy

Noise limits

No sound equipment over 75 decibels at the property line from 10 a.m. to 10 p.m.
No sound equipment audible beyond the property line from 10 p.m. to 10 a.m.
No noise or musical instrument audible to an adjacent business or home from 10:30 p.m. to 7 a.m.

These rules apply to the operator and to guests, and the operator is responsible for guest compliance.

Guest information packet and safety

You must keep an information packet in a common area of the rental with the contact person's details, the noise rules, parking restrictions, the trash schedule, burn bans and water restrictions, and ADA information, plus a list of fire extinguisher locations. If you rent part of a home, the guest must get exclusive use of a bedroom and shared use of a full bathroom. The home must be habitable.

Occupancy limits

Older guides often say Austin STRs are limited to 6 unrelated adults or 10 people. That cap came from the 2016 zoning rules. The rewritten Chapter 4-23 (the 2025 ordinance) does not set a per-guest occupancy limit, and the city's STR page does not list one today. That does not mean "no limit": the building and fire codes, your HOA, your insurance policy and the platform's own rules still apply, and the city can impose mitigation requirements on a rental that draws complaints. Set a sensible maximum guest count based on beds, bathrooms and parking, and check with the city before advertising a large group home.

Parties

Gatherings that cause a public disturbance are one of the listed bases for declaring a rental a nuisance. Airbnb also has its own party rules. In Austin, a party house is the fastest way to lose a license.

Hotel Occupancy Taxes in Austin

Short term rental guests in Austin pay a 17% hotel occupancy tax: 6% to the State of Texas and 11% to the city (a 9% occupancy tax plus a 2% venue project tax), per the city's tax rate page for hotel occupancy tax page. The city tax applies to everything charged to the guest for the use, cleaning and readying of the room, which includes cleaning fees.

Tax piece	Rate	Who it goes to
State hotel occupancy tax	6%	Texas Comptroller
City occupancy tax	9%	City of Austin
City venue project tax	2%	City of Austin
Total	17%

Platform collection and how to file quarterly reports

Since April 1, 2025, online platforms and booking platforms such as Airbnb, Vrbo, Expedia and Booking.com must collect and remit Austin HOT on your behalf. That does not end your filing duty:

File a quarterly report with the City of Austin in Austin Finance Online (Airbnb hosts and Vrbo owners alike) showing how much tax each platform collected and remitted for you.
Reports are due the last day of the month after each quarter: April 30, July 31, October 31 and January 31.
File a zero report even if you had no rentals that quarter.
Any direct bookings (your own website, repeat guests, cash) are on you: collect the 11% and pay it to the city quarterly.

Late filing or payment draws a 5% penalty, another 5% on the 61st day past due, and 10% annual interest from day 61. The state 6% is handled separately; see the Texas Comptroller hotel tax page, and our Texas short term rental taxes guide for how the state piece works with platforms.

Enforcement, Fines and License Revocation

Each violation of Chapter 4-23 is a separate offense for each day it continues, punishable by a fine of up to $500. The city does not have to prove intent. (Older posts quoting "$2,000 per violation" do not match the current ordinance.)

The city can revoke a license when:

the home poses a threat to life, health or public safety;
the rental is a nuisance short term rental, or a court declares it one;
the operator fails to keep mitigation requirements or a compliance plan;
the designated contact failed to respond within two hours; or
the license was issued in error.

Usually the city sends a notice of intent and holds a pre-revocation conference that ends with a written compliance plan. After a revocation, the city can send the delist notice to the platforms. A revoked property cannot get a new license for six months, or 12 months if it was declared a nuisance, and the operator of a nuisance rental is barred from any new license for 12 months. Appeals must be filed within 10 days; while one is pending you can honor existing bookings but cannot take new ones.

The city can also deny a new license or a renewal if the rental has had at least two disturbances or two violations of law. Neighbors report problems through Austin 3-1-1, and those calls are part of the record the city uses. You can see licensed locations on the city's Short Term Rental Locations open data.

HOAs, Condos and Deed Restrictions

A city license does not override private rules for short term rentals. Many Austin subdivisions and most condo regimes have deed restrictions or bylaws that limit rentals under 30 days, set minimum lease terms, or cap the number of rented units. The city will not check these for you.

Read the HOA declaration, bylaws and any rental policy before you buy.
For condos, also check the 10% or 25% density cap, which counts the units you own or lease on the site.
Ask the HOA for any pending amendments; a rental ban can be adopted after you close.

Texas law on when an HOA can stop a rental depends on the exact wording of the restrictions. Our guide to whether an HOA can stop an Airbnb in Texas explains the main rules, and the statewide picture is in our Texas Airbnb laws guide.

Austin Short Term Rental Costs: Compliance Budget

Here is what the rules themselves cost a property owner in Austin, Texas over a two-year license, before cleaning, supplies and management:

Item	Cost
New operating license (two years, includes notification)	$736.60
Renewal every two years	$369.60
Hotel occupancy tax	17% of the rental charges, paid by guests, collected by platforms
Local contact	Your time, or part of a local manager's service
Penalties for missed quarterly reports	5% plus 5% and 10% interest on any tax due

Licensing is a small cost next to operations. For the bigger line items, see our breakdown of the cost of running an Airbnb in Texas and Airbnb cleaning costs in Austin.

Is an Austin Short Term Rental Still Worth It?

The 2025 changes made short term rentals in Austin simpler to enter for small owners and harder to scale for investors. One person can license their home or a second property, but building a portfolio of single-family rentals on one street is now off the table. Demand is real: Surge market data puts the median Austin-area listing at about $41,000 in annual revenue, with an average daily rate near $216 and occupancy around 58%. Medians hide a wide spread by neighborhood and home type, and many purchases at today's prices do not cash flow as rentals. Run the numbers on your specific address with our Austin Airbnb income guide before you buy.

Austin, Texas STR Compliance Checklist for STR Operators

Confirm the address is in Austin's full or limited purpose jurisdiction.
Check your HOA or condo documents for rental limits.
Confirm you fit the density caps (two units per small site, 1,000-foot spacing, 10% or 25% in larger buildings).
Open an Austin Finance Online account and apply for the license; wait for approval.
Add the license number to every listing.
Name a contact person in the five-county metro who can be on site within two hours.
Post the information packet and fire extinguisher locations in the home.
File the quarterly hotel tax report, including zero reports.
Renew at least 30 days before expiration (60-day window opens earlier).

Frequently Asked Questions

Do I need a license to run an Airbnb in Austin?

Yes. Any rental of a home or part of a home for less than 30 consecutive days inside Austin's full or limited purpose jurisdiction needs a City of Austin operating license, and the license number must appear on the listing. Homes in the ETJ do not need a city license.

How much is an Austin short term rental license?

A new license is $736.60 ($642.00 plus a $94.60 neighbor notification fee) and a renewal is $369.60 ($275.00 plus $94.60), per the city's page and the fee schedule effective October 1, 2026. Licenses last two years. Fees are non-refundable.

Can I rent out a house I don't live in?

Yes. Since the 2025 changes, short term rentals are an accessory use to any residential use in all zoning districts with a license. The limit is density: up to two units on a small site, and other sites must be at least 1,000 feet apart.

Can a tenant run a short term rental in Austin?

Yes, with the landlord's permission. The tenant applies as the operator, shows proof of tenancy and that they pay utilities, and the owner signs the authorization.

What is the hotel tax on an Austin Airbnb?

17% total: 6% state and 11% city (9% occupancy plus 2% venue). Platforms collect it, but you still file a quarterly report with the city, including zero reports.

Will Airbnb remove my listing if I don't have a license?

It can. Since July 1, 2026, platforms must remove an Austin listing within 10 days after the city sends a delist notice for an unlicensed or revoked rental.

Is there an occupancy limit for Austin STRs?

The current Chapter 4-23 does not set a per-guest cap, and the old 6-unrelated-adults figure came from pre-2025 zoning rules. Building codes, HOA rules, insurance and platform rules still limit guest counts, and the city can add mitigation requirements after complaints.

What are the fines for an unlicensed rental?

Up to $500 per offense, with each day a separate offense, plus a delist notice to the platforms. Repeated problems can lead to a nuisance declaration and a 12-month ban on new licenses.

Let Surge Handle Austin Compliance

The Austin rules reward owners who are organized: licenses renewed on time, a contact who actually answers at 1 a.m., quarterly tax reports filed even in slow months, and guests who know the noise rules. Surge is a short term rental management company for owners in Texas and Florida, with full service starting at 15%. We handle licensing paperwork, guest screening, pricing, cleaning and the local response the city requires. See our Austin Airbnb management page, or our Texas Airbnb management overview, to talk through your property.