Austin
Can you run an Airbnb or do rental arbitrage here? What the city requires: permits, taxes, safety rules and enforcement.
Yellow light: allowed in every zone, with limits on how many units you can run
Austin allows short-term rentals as an accessory use in all base zoning districts, and a tenant can run one with the landlord's permission.[1, 2] The limits come per person: two units on a small site, and a small share of the units you lease in a bigger building.[3] A license costs $736.60 and lasts up to two years.[2, 3]
Our verdict, based on the sources at the end of this guide.
Austin allows short-term rentals as an accessory use in all base zoning districts, and the code says the use can't be prohibited.[1] A tenant can operate one with the landlord's permission, and each unit needs its own license.[2, 3] Limits apply per person: two units on a site of three or fewer units, or the greater of one unit or 10% (25% with a commercial use) of the units you lease in a bigger building.[3] Running without a license can mean fines of up to $500 a day.[3]
Key requirements
Zoning
Short-term rental use is allowed as an accessory use to a residential use in all base, special purpose, combining and overlay zoning districts, and the code says it can't be prohibited.[1] It still needs a valid operator's license under Chapter 4-23.[1]
Tenants and landlord consent
An operator must own or lease the unit, and tenants may operate with their landlord's permission.[2, 3] The application needs the owner's authorization in a form the city sets, plus proof that a tenant applicant is responsible for paying the utilities.[3]
License for every unit
Each short-term rental needs its own operator's license, which lasts up to two years and can't be transferred.[3] A new license costs $736.60 and a renewal $369.60, and each includes a $94.60 notification fee.[2] You apply online, in person or by mail, and you need an Austin Finance Online account.[2]
Unit limits
On a site with three or fewer units, one individual can operate up to two short-term rentals.[3] On a site with four or more units, the limit is the greater of one unit or 25% of the units you own or lease if the site has a commercial use, or 10% if it has none.[3] To run rentals on more than one site, the sites must be at least 1,000 feet apart.[3]
Where it applies
Short-term rentals are allowed in the city's full and limited purpose jurisdictions, with some exceptions.[2] A unit in the limited purpose jurisdiction needs a license but owes no city hotel tax, and a unit in the extraterritorial jurisdiction needs neither a license nor local hotel tax.[2]
Operational and safety standards
License number in listings
Put your license number in every advertisement or promotion, and don't advertise a unit that has no valid license.[3] Platforms must require a license number in each listing, and that duty took effect July 1, 2026.[2, 3]
Local contact
Each operator must name a local contact who is an individual present in the five-county Austin Metro Area, and you can serve as your own contact.[3] The contact must answer an emergency within two hours and be at the unit within two hours if a city employee asks.[3]
Insurance and safety
Since October 2025 the city no longer requires a certificate of occupancy or proof of insurance for new licenses or renewals.[2] You submit a self-certified safety checklist, and the unit must be habitable.[3] The city can require a third-party inspection if the unit had state law or City Code violations in the prior 24 months.[3]
Noise limits
Sound equipment can't pass 75 decibels at the property line from 10 a.m. to 10 p.m., and can't be audible beyond it from 10 p.m. to 10 a.m.[3]
Guest packet and neighbors
Give each guest the city's information packet and a list of fire extinguisher locations.[3] The city notifies each property within 100 feet when it issues or renews a license, at your expense.[2, 3]
Tax obligations
State hotel tax
Texas charges a 6% state hotel occupancy tax on the cost of a room, and it covers houses and condos as well as hotels.[4] The state tax applies to every short-term rental in Texas, which the Comptroller defines as a rental for 29 days or less.[6]
City hotel tax
Austin's hotel occupancy tax is 11%, made up of a 9% occupancy tax and a 2% venue project tax.[5] With the state's 6% that adds up to 17%,[4, 5] which the Comptroller says is the most that state, county, city and venue hotel taxes can total.[7]
Who collects
Booking platforms must collect and remit the city hotel tax for you, and you file a quarterly report of what each platform collected.[2, 5] For rentals that don't go through a platform, you collect the city tax and remit it yourself each quarter.[2] For the state tax, a platform that agrees to collect it relieves you of that duty on its bookings, and otherwise you remit it yourself.[6]
Due dates and penalties
City hotel tax reports are due on the last day of the month after each quarter.[8] A late or unpaid report draws a 5% penalty, another 5% on the 60th day past the due date, and 10% interest a year starting on the 61st day.[8] State returns are due by the 20th of the month after each month, or after each quarter if you qualify.[4]
30-day stays
A guest who gives written notice and stays at least 30 consecutive days is exempt from city and state hotel tax.[5] Without written notice on arrival, the tax applies to the first 30 days.[8]
Enforcement
Fines
Operating or advertising without a valid license violates the code, and each day is a separate offense with a fine of up to $500.[3] An ad for an unlicensed rental is prima facie evidence of a violation and cause for an administrative citation.[1] Violations can be reported by calling Austin 3-1-1, online or through the 3-1-1 app.[2]
Delisting
When a rental has no valid license, the director can send a delist notice, and a platform must remove the listing within 10 days.[3] Platforms also can't accept a booking fee for a rental without a valid license.[3] The city's page says it will begin asking platforms to remove unlicensed listings on July 1, 2026,[2] but an April 30, 2026 city memo says delist notices pause for six months after the new licensing system launches, which it scheduled for May 18, 2026.[9]
Revocation and nuisance
The director can revoke a license for a safety threat, a nuisance rental, ignoring mitigation or compliance plans, a local contact who doesn't respond within two hours, or a license issued in error.[3] A rental is a nuisance if you keep operating without a license after a notice of violation, or if it draws numerous documented complaints.[3] A nuisance finding bars you from any new license for 12 months.[3]
Appeals
You can appeal a denial, a revocation, a nuisance declaration or a mitigation requirement in writing within 10 days, and a hearing is held within 21 days.[3] While an appeal is pending you can't accept new bookings, but you can honor ones you already accepted.[3]
State law and HOAs
Texas's 2025 home-based business law (H.B. 2464) limits what cities can require of home businesses, but it says it doesn't stop a city from adopting or enforcing an ordinance regulating a short-term rental unit.[10] It also doesn't stop a homeowners' association from enforcing its own rules or deed restrictions.[10]
Bottom line for arbitrage
Austin works for arbitrage if your lease fits the unit limits. Count how many units you can run in the building before you sign.
Step 1 is the hard part. We find landlords who already said yes →
Sources
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