Austin STR Type 1 license with LLC?

Question

Austin STR Type 1 license for owner occupied with attached ADU; the ADU is not allowed to be owned by a company.

How do Austin hosts legally get a STR license for attached ADU and pay their taxes?  Do they not have any company? Am I missing something simple?

What is the proper legal way to get Austin STR license for an owner occupied property with attached ADU and the ADU is in a business name?

Erika Albert · Answer

The City of Austin generally equates primary residence with a Homestead Exemption.  The Homestead Exemption can not be in the name of an LLC. You can also prove primary residence with a voter registration card tied to the address. Why do you want to own the property in the name of an LLC?  Also, you mentioned the ADU is attached and the ADU is in a business name.  Is the main structure not in a business name? Is this a condo regime? When was the ADU built?  The City of Austin also has restrictions on ADUs as STRs if they were built recently.

Bryan Noth · Answer

@Kevin Melanson to clarify, are the SFH + ADU on the same parcel? If yes, has it been through condo regime subdivided? Or were lots subdivided entirely?  You can own a property in your name but run operations through an LLC.  This is a crude explanation and would be worth chatting with CPA up on how to best structure that LLC entity.

Megan Templeton · Answer

@Kevin Melanson

We have worked with clients on this before but it can be a pretty involved process. It requires a lot of coordination with the code office and how to structure the application so that you can benefit from LLCs protections while also getting approved. At a high level, it would likely involve completing the application in conjunction with the code office with the applicant being listed as a trust that flows through to you ultimately. However, due to the complexity an variations that can occur depending on the property and owners history, I would recommend chatting with an advisor to map out a plan for this.

Thanks,

-Megan

Austin STR Type 1 license with LLC?

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