Yes — you can run a short-term rental cabin in Gatlinburg, and it is one of the friendliest markets in the country. There is no owner-occupancy rule and no annual cap on rental nights. What Gatlinburg does require is a city Tourist Residency (overnight rental) permit, a passing fire and building inspection before that permit is issued, and diligence on a stacked set of taxes. Investors can buy and rent whole-home cabins; you do not need to live in the city. Get the permit, pass the inspection, and remit the taxes on time, and you are compliant.
| License required | Yes — city Tourist Residency / overnight rental permit |
|---|---|
| Primary residence required | No |
| Night cap | None (each stay must be 89 days or fewer) |
| Permit fee | $200 base (up to 2 bedrooms) + $75 per additional bedroom, annual |
| Lodging tax | ~12.75% combined, plus a separate 1.25% city gross-receipts tax |
| Investor whole-home allowed? | Yes |
| Last verified | 2026-07-20 |
This page is a plain-language summary for research, not legal or tax advice; confirm current requirements with the City of Gatlinburg and Sevier County before you operate.
Do you need a permit?
Yes. Every overnight rental inside Gatlinburg city limits needs a Tourist Residency Permit (the city’s overnight rental permit) before it can operate. The permit is issued by the City of Gatlinburg through its Finance Department. You apply in person at the Customer Service Center or by mail, submit the required forms, and pass an inspection before the permit is granted. The permit is tied to the property and to you as the operator; it is not automatically transferable when a cabin is sold, so a new owner applies fresh.
The permit renews annually at the same fee schedule. Operating without a valid permit is not allowed — the permit and the passing inspection are both prerequisites to renting.
The required fire and safety inspection
Before Gatlinburg issues the permit, the property must pass a fire and building inspection. This is the step that trips up new operators, because it happens up front rather than as an after-the-fact spot check. Inspectors verify basic life-safety equipment and egress, including:
- Working smoke detectors
- Carbon monoxide detectors
- Fire extinguishers
- Clear escape routes / egress from sleeping areas
Build the inspection into your timeline. A cabin that fails on detectors or egress cannot get its permit until the issues are corrected and it is re-checked.
Primary-residence requirement (there isn’t one)
Gatlinburg has no owner-occupancy or primary-residence requirement. You do not have to live in the cabin, live in Gatlinburg, or even live in Tennessee. This is the single biggest reason the Smoky Mountains market is dominated by non-owner-occupied investor cabins. Whole-home rentals are the norm and are fully allowed.
This is a sharper contrast than it sounds. Many restrictive cities cap non-hosted rentals or ban them outright; Gatlinburg does neither. If you are weighing markets, it sits alongside Scottsdale as one of the most investor-friendly STR markets in the country.
Stay limits
There is no annual cap on the number of nights you can rent. The only length constraint is per-stay: each rental must be 89 days or fewer. There is no codified minimum-night stay in the city rules, though individual HOAs or resort communities may impose their own minimums.
Permit fees
The Tourist Residency Permit fee is $200 for a property with up to two bedrooms, plus $75 for each additional bedroom. So a three-bedroom cabin is $275, a four-bedroom is $350, and so on. The fee is charged again at each annual renewal. Operators also typically obtain city and county business licenses as part of setting up.
Lodging taxes and the Gatlinburg gross-receipts tax
Two separate things happen here, and it is important not to conflate them. One is the tax you collect from guests; the other is a city business tax you pay out of your own revenue.
Taxes collected from guests (~12.75% combined):
- 7% Tennessee state sales tax
- 2.75% Sevier County local sales tax
- 3% Sevier County lodging (occupancy) tax
The 9.75% state-and-local sales tax is often collected automatically by marketplaces such as Airbnb. The 3% Sevier County lodging tax is remitted monthly to the Sevier County Trustee, due by the 20th of the following month; on Vrbo or direct bookings the host is typically responsible for remitting it.
City business tax you pay yourself: separately, Gatlinburg levies a 1.25% gross-receipts (business) tax on your total gross sales (excluding sales tax). This is not an add-on charged to the guest — it comes out of the business’s revenue. It is also not the same as the county’s 3% lodging tax. Online marketplaces do not remit the Gatlinburg gross-receipts tax for you; you file and pay it yourself, due by the 20th of each month.
In short: guests effectively pay roughly 12.75% in taxes on top of the nightly rate, and you separately owe the city 1.25% of your gross rental sales.
Zoning: where cabins are and aren’t allowed
Location matters. Short-term rentals are prohibited in Gatlinburg’s R-1A and R-2A zones. They are allowed in the R-1, R-2, and R-3 residential zones, in commercial zones (C-1 and C-2), in tourist-commercial zones, and in mixed-use developments. Before you buy, confirm the parcel’s zoning with the city — a cabin in R-1A cannot be permitted as an overnight rental no matter how nice it is.
Zoning is not the only layer. Many cabin communities sit under HOAs or resort covenants that add their own rules, minimum-stay requirements, or outright rental bans. Check the covenants for any specific property in addition to the city’s zoning map.
Enforcement
Gatlinburg’s enforcement model is front-loaded: you cannot legally operate until you hold a valid permit and have passed the fire and building inspection. Both are prerequisites, not formalities. The permit must be kept current through annual renewal, and the monthly tax filings (county lodging tax and city gross-receipts tax) both fall due on the 20th. The city has not published a specific fine schedule that we can cite here, so we will not guess at penalty amounts — confirm current enforcement and penalties directly with the City of Gatlinburg Finance Department.
Primary sources
- City of Gatlinburg — Finance Department (overnight rental information)
- City of Gatlinburg — Overnight Rental Information (PDF)
- Sevier County — Lodging Tax (County Trustee)
Compare short-term rental rules in other cities
Gatlinburg is unusually permissive; other markets are much stricter. Within Tennessee, Nashville is far more restrictive, with owner-occupancy tied to permit type — a useful contrast if you are choosing between the two. See how the rules stack up elsewhere:
- Short-term rental laws by city (hub)
- Nashville short-term rental permit
- Scottsdale short-term rental license
- Austin short-term rental license
Frequently asked questions
Do I need to live in Gatlinburg to rent a cabin short-term?
No. Gatlinburg has no primary-residence or owner-occupancy requirement. Out-of-state investors can own and rent whole-home cabins, provided the property holds a valid Tourist Residency Permit, has passed its fire and building inspection, and sits in a zone where short-term rentals are allowed.
How much is a Gatlinburg overnight rental permit?
The Tourist Residency Permit is $200 for a property with up to two bedrooms, plus $75 for each additional bedroom, and it renews annually at the same rate. A three-bedroom cabin, for example, costs $275.
What taxes do I owe on a Gatlinburg short-term rental?
Guests pay roughly 12.75% in combined taxes: 7% Tennessee state sales tax, 2.75% Sevier County sales tax, and a 3% Sevier County lodging tax (remitted monthly to the county by the 20th). Separately, you owe the city a 1.25% gross-receipts tax on your total gross rental sales, which you file and pay yourself — marketplaces do not remit it for you.
Last verified: 2026-07-20. Rules change — confirm current requirements with the City of Gatlinburg Finance Department and Sevier County before operating.