Thinking about listing your Central Austin property on a short-term rental platform? Austin’s rules changed in 2025, and the details matter. If you get the license type, zoning, and tax reporting right from the start, you reduce risk and protect your investment. This guide explains the latest requirements, what to check for Central Austin addresses, and a simple path to compliance. Let’s dive in.
What changed in 2025
Austin updated its STR rules in 2025 and moved many requirements into an operating license framework. The Council’s February action reclassified STRs as a licensed business activity and set the stage for new operator and platform duties. You can review the City’s summary of this action in the Council’s news update on adopted short-term rental code amendments.
Starting April 1, 2025, platforms began collecting and remitting the City Hotel Occupancy Tax on bookings. Additional operator and platform requirements were adopted in September, with some provisions taking effect later. Always confirm current effective dates and enforcement details on the City’s STR program page.
STR license basics
You must have a City operating license before you host. Operating without a license is a code violation. Austin issues different license types and applies location-specific limits. Start with the City’s primary resource: the Short-Term Rentals page.
STR types
- Type 1: Owner-occupied principal residence or partial unit rented for fewer than 30 days.
- Type 2: Non-owner-occupied whole-home in eligible base districts outside multifamily. Some commercial or mixed districts allow Type 2 commercial STRs.
- Type 3: A unit within a multifamily or condo building, subject to building-level caps.
You can find definitions and application links on Operating Licensing.
Where STRs are allowed
Licensed STRs are allowed as an accessory or business use. For Type 2 commercial STRs, only certain base districts permit them. Examples include CBD and DMU downtown, and some mixed or commercial districts like PUD, GR-MU, CS-MU, CS-V, and GR-V. In Central Austin, many downtown parcels fall into CBD or DMU, but you should confirm your exact zoning and any overlays before you apply.
Density and spacing limits
Austin applies caps to reduce clustering.
- Single-family sites: an individual can operate up to two STR units on a site. Additional STRs are allowed elsewhere if they are at least 1,000 feet apart.
- Mixed-use sites: the greater of one unit or 25 percent of units.
- Multifamily sites: the greater of one unit or 10 percent of units. Type 3 licenses must also meet density limits.
Check the STR program page for current caps and examples.
Platform rules and listings
Platforms must provide a place to display a City license number and are required to remove unlicensed listings when the City requests it. Some platform duties have phased timelines. Expect your listing to need a visible license number once the display rules are fully active. You can track updates on the STR program page.
Taxes you must report
As of April 1, 2025, platforms that handle payments collect and remit Austin’s Hotel Occupancy Tax on your behalf. You still need a HOT account and must file required quarterly reports with the City noting what each platform remitted. See the City’s Short-Term Rental Registration Program page for HOT guidance. For tax account help, email [email protected].
Local contact and neighbor notices
You must provide a local contact who lives in the Austin metro area and can respond to complaints. The City now notifies neighbors at every renewal, and operators must provide required postings and license details in listings and to guests as directed by the program.
Central Austin checks before you apply
Zoning and overlays
Central Austin includes CBD and DMU downtown, multifamily districts, and several overlays like historic and university-area plans. These can affect whether a Type 2 commercial or a Type 3 license is possible. Confirm base zoning, overlays, and whether your parcel is in full-purpose or limited-purpose jurisdiction using the City’s Land Use Review resources.
Multifamily, condos, and private rules
If your property is inside a multifamily or condo building, it will be a Type 3 and subject to building caps. Private rules also matter. HOA covenants, condo declarations, leases, and management agreements may restrict or prohibit STRs even when the City allows them. Tenants may apply for a license only if their lease grants permission.
Parking and house rules
Central Austin neighborhoods often have limited on-site parking. Set clear house rules for parking, trash, and noise, and include the local contact number in guest materials. Plan for quick response to any complaint.
Step-by-step: get licensed in Central Austin
- Confirm zoning and jurisdiction. Use the City’s Land Use Review tools to verify base district, overlays, and whether your parcel is in full-purpose or limited-purpose Austin.
- Pick your STR type. Identify whether your property is Type 1, Type 2, or Type 3 and note any density or spacing caps. Start at the STR program page.
- Check private restrictions. Review HOA rules, condo docs, and leases. Tenant operators need written permission.
- Gather documents. Typical items include your completed application, Certificate of Occupancy if required, proof of property insurance, government ID, and agent authorization if someone applies for you. See the Short-Term Rental Registration Program page for current requirements.
- Set up HOT compliance. Open your HOT account and understand quarterly reporting, even if platforms remit taxes. For help, email [email protected].
- Prepare local contact and guest info. Designate a local contact within the metro area and create posted house rules for guests.
- Apply and track status. Submit through Austin Finance Online or at the Permitting & Development Center. Review current fees and timelines on Operating Licensing and keep your license details handy for your listing.
Enforcement and staying compliant
Operating without a license, exceeding caps, or failing to manage HOT reporting can lead to citations and platform delisting. The City takes complaints through 3-1-1 and coordinates with platforms to address unlicensed activity. To understand neighborhood concentrations and plan responsibly, explore the City’s open data in the Short Term Rental Locations dataset.
Make a smarter STR plan
A compliant STR can support your goals when you match the right property with the right strategy. If you are buying or selling with STR potential in Central Austin, careful due diligence on zoning, caps, HOT reporting, and private rules will save time and stress. If you want a calm, expert guide through that process, reach out to Allison Winkler for tailored help.
FAQs
Do you need a City license to host an STR in Central Austin?
- Yes. You must secure a City of Austin operating license before you advertise or host. Operating without a license is a code violation.
What are Austin’s STR types and why do they matter?
- Type 1 is owner-occupied, Type 2 is non-owner-occupied in eligible base districts, and Type 3 is inside a multifamily or condo building. Your type determines if and where you can operate and which caps apply.
How did the 2025 changes affect owners?
- The City shifted STRs into a licensing framework, added neighbor notifications at renewal, expanded platform duties, and required platforms to collect HOT while owners continue filing reports.
Can tenants operate an STR in Central Austin?
- Tenants may apply only if their lease allows it. City approval does not override private lease terms.
Where are Type 2 STRs typically allowed in Central Austin?
- Some base districts like CBD and DMU, along with other listed commercial and mixed districts, allow Type 2 commercial STRs. Always verify your exact zoning and any overlays before applying.
What taxes do STR owners need to handle?
- Platforms collect and remit Austin’s Hotel Occupancy Tax on eligible bookings, but you must keep records and complete required quarterly reports through your HOT account.
