Yes, you can run a short-term rental in Austin. The city requires a short-term rental (STR) license, issued in three types keyed to how the property is used: Type 1 (owner-occupied), Type 2 (non-owner-occupied whole-home), and Type 3 (multifamily). The headline for investors: a February 2025 overhaul made STRs an allowed accessory use in all residential zoning districts, reopening Type 2 whole-home rentals citywide. There is no night cap. A new license costs $836.30 and is valid for two years.
| License required | Yes — STR license (Type 1, 2, or 3) |
|---|---|
| Primary residence required | Type 1 only; Type 2 does not require owner occupancy |
| Night cap | None (density/operator limits apply instead) |
| Permit fee | $836.30 new / $385.30 renewal; valid 2 years |
| Lodging tax | 17% combined (11% city + 6% Texas state) |
| Investor whole-home allowed? | Yes — Type 2, in all residential zones since Feb 2025 |
| Last verified | 2026-07-20 |
This page is a plain-language summary for research, not legal advice; verify current rules with the City of Austin before operating.
Do you need a license?
Yes. Anyone renting a residential unit in Austin for fewer than 30 consecutive days must hold a valid STR license from the City of Austin Development Services Department. The license type depends on whether the property is your primary residence and whether it sits in a single-family, mixed-use, or multifamily building. Operating without a license is a code violation.
As of 2025, the city no longer requires a Certificate of Occupancy or proof of insurance for new or renewal applicants, simplifying the application compared with prior years.
Type 1 vs. Type 2 vs. Type 3
Austin sorts every STR into one of three types:
- Type 1 — owner-occupied. The STR is the operator’s primary residence, rented whole or in part (hosted or partial). This is the classic “rent a room” or “rent your home while away” category.
- Type 2 — non-owner-occupied whole-home. A whole-home rental that is not the operator’s residence and not part of a multifamily use. This is the investor category.
- Type 3 — multifamily. An STR within a multifamily or condominium building.
The key distinction is owner occupancy: Type 1 requires it, Type 2 does not. Austin’s split mirrors Nashville’s owner-occupied vs. non-owner-occupied permit structure — see our Nashville short-term rental permit guide for how that city draws the same line differently.
Primary-residence and the 2025 zoning change
Before February 2025, non-owner-occupied whole-home rentals faced heavy zoning restrictions in Austin. That changed when the City Council adopted an ordinance making STRs an allowed accessory use to all residential uses in all zoning districts, effective February 2025. Both Type 1 and Type 2 licenses are now permitted citywide in residential zones.
In practical terms, this reopened the investor market: you no longer need to live in a property to license it as a whole-home STR. That puts Austin in sharp contrast with cities that ban investor rentals outright — Denver, for example, restricts STRs to a host’s primary residence, effectively barring the Type 2 model. See our Denver short-term rental rules for that comparison.
Night caps and density limits
Austin imposes no night cap on how many nights per year an STR may be rented. Instead, the city limits operator density per site:
- Single-family sites: an individual may operate up to 2 STR units on a site (additional STRs elsewhere must be at least 1,000 feet apart).
- Mixed-use sites (4+ units): the greater of 1 unit or 25% of the units.
- Multifamily residential: the greater of 1 unit or 10% of the units.
License fees
A new STR license costs $836.30 ($789 license fee plus a $47.30 notification fee). A renewal costs $385.30 ($338 renewal fee plus the $47.30 notification fee). As of October 2025, licenses are valid for two years from the date of issuance, up from the prior one-year term. Certificate of Occupancy and proof of insurance are no longer required for new or renewal applicants.
Hotel occupancy tax (city + state = 17%)
Austin STR stays are taxed at a combined 17%: the City of Austin Hotel Occupancy Tax of 11% (9% occupancy tax plus a 2% venue project tax) and the Texas state HOT of 6%. As of April 1, 2025, booking platforms such as Airbnb and Vrbo must collect and remit the tax on the operator’s behalf. Hosts still file quarterly reports through Austin Finance Online, and must collect and remit directly for any bookings made outside a platform.
Zoning and HOA rules
Since February 2025, both Type 1 and Type 2 licenses are permitted in all residential zoning districts. Tenants may operate an STR with their landlord’s approval. Note that a homeowners association (HOA) may still restrict or prohibit short-term rentals through its own covenants, independent of city zoning — always check your HOA rules before applying.
Enforcement and penalties
Operating an STR without a valid license is a code violation in Austin, subject to citation and fines. The city has not published a single fixed per-day penalty amount that we can confirm, so we do not state one here. Enforcement is handled by Austin Code and Development Services; unlicensed operation, false applications, and density violations can all trigger action.
Primary sources
- City of Austin — Short-Term Rental program and fees
- Austin Development Services — Short-Term Rentals
- Austin Financial Services — Hotel Occupancy Taxes
Compare short-term rental rules in other cities
Short-term rental rules vary sharply from city to city. Compare Austin’s investor-friendly Type 2 model with other markets:
- Short-term rental laws by city (hub)
- Nashville short-term rental permit
- Is Airbnb legal in San Diego?
- Denver short-term rental rules
Frequently asked questions
Can I run an Airbnb in Austin without living there?
Yes. A Type 2 license covers non-owner-occupied whole-home rentals, and since February 2025 these are allowed in all residential zoning districts. You do not need to live in the property, but you must hold a valid license and observe the per-site density limits.
How much is an Austin STR license?
A new license is $836.30 and a renewal is $385.30. Both include a $47.30 notification fee. Licenses are valid for two years as of October 2025.
What taxes do Austin short-term rentals pay?
A combined 17% hotel occupancy tax — 11% to the City of Austin and 6% to the State of Texas. Booking platforms collect and remit it as of April 1, 2025, but hosts still file quarterly reports.
Last verified: 2026-07-20. Rules change — confirm current requirements with the City of Austin Development Services Department before operating.