Austin Airbnb Restrictions Starting in July

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Austin Airbnb Restrictions Starting in July

Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes

Starting July 1st all of the short term rental platforms in Austin are pulling listings down that don't have a short term rental license attached to them. This means you'll have to get the license approved before July 1st to keep running a short term rental in Austin if you use Airbnb, VRBO, Booking.com, etc to get guests. They'll also be collecting the 17% state and local hotel tax now too because they know who's running an STR.

How do you think this will affect the short term rental supply in Austin? I have to imagine a lot will pull their listings because it will no longer make sense but I'm curious to know what everyone else thinks.


This could add more supply to the already crowded sales market as people sell non performing properties too.

I'm interested to see what happens with STR's here in Austin and imagine we won't be the last city to implement this!

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John RacinePro Member
Real Estate Investor · Casselberry, FL · Member since 2008 · 41 posts · 33 votes
6mo

I am not in the Austin market, right now, but LOVE hearing this. It could potentially weed out poor operators and allow others to have more demand and drive up ADR at the same time. Could be a MASSIVE win-win.

I have my listings already covered and am not in a major market like Austin and we are still making money. I don't mind playing by the rules, it just makes me more money and keeps me and my owners happy.

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  • John RacinePro Member
    Real Estate Investor · Casselberry, FL · Member since 2008 · 41 posts · 33 votes
    6mo

    I am not in the Austin market, right now, but LOVE hearing this. It could potentially weed out poor operators and allow others to have more demand and drive up ADR at the same time. Could be a MASSIVE win-win.

    I have my listings already covered and am not in a major market like Austin and we are still making money. I don't mind playing by the rules, it just makes me more money and keeps me and my owners happy.

    3Reply
  • Grant Woodward
    Member since 2021 · 47 posts · 42 votes
    6mo

    Is the 17% state and local hotel tax on top of sales tax? If that's the case, that sounds painful.

    In Kansas City, Missouri, we have a 7.5% STR tax, a $3 per night occupancy fee, a 9% sales tax rate, a $200 annual STR permit fee, and a 1% city earnings tax. Aside from the earnings tax, these are things you typically don't pay when operating a MTR or LTR (in addition to other things like utilities, lawn care, and the higher STR insurance premiums). I believe the juice is not worth the squeeze for most, aside from select properties and long term operators with no or low debt service, or those doing it for the love of the game.

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    • Collin HaysBusiness Member
      Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
      5mo
      Quote from @Grant Woodward:

      Is the 17% state and local hotel tax on top of sales tax? If that's the case, that sounds painful.

      In Kansas City, Missouri, we have a 7.5% STR tax, a $3 per night occupancy fee, a 9% sales tax rate, a $200 annual STR permit fee, and a 1% city earnings tax. Aside from the earnings tax, these are things you typically don't pay when operating a MTR or LTR (in addition to other things like utilities, lawn care, and the higher STR insurance premiums). I believe the juice is not worth the squeeze for most, aside from select properties and long term operators with no or low debt service, or those doing it for the love of the game.


       Sounds like the taxing entities are making the most bank off of the rentals.

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    • Robin SimonBusiness Member
      Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
      5mo
      Quote from @Collin Hays:
      Quote from @Grant Woodward:

      Is the 17% state and local hotel tax on top of sales tax? If that's the case, that sounds painful.

      In Kansas City, Missouri, we have a 7.5% STR tax, a $3 per night occupancy fee, a 9% sales tax rate, a $200 annual STR permit fee, and a 1% city earnings tax. Aside from the earnings tax, these are things you typically don't pay when operating a MTR or LTR (in addition to other things like utilities, lawn care, and the higher STR insurance premiums). I believe the juice is not worth the squeeze for most, aside from select properties and long term operators with no or low debt service, or those doing it for the love of the game.


       Sounds like the taxing entities are making the most bank off of the rentals.


       Welcome to Austin, Texas lol

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  • John RacinePro Member
    Real Estate Investor · Casselberry, FL · Member since 2008 · 41 posts · 33 votes
    6mo

    Yes, even with 17%, it still works. Hotels here do it every day and some even higher percentages. We have no state income tax so I'd rather collect the 17%+ premium(which I do through smart pricing strategy) while maintaining 90+% occupancy and we are still well north of breakeven consistently. It is a part of our business plan and we still make money. :-) 

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6mo

    I imagine this was widely know that this was coming and some operators ignored it till they couldn't?

    1Reply
    • Jordan MoorheadBusiness Member
      OP
      Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
      5mo
      Quote from @John Underwood:

      I imagine this was widely know that this was coming and some operators ignored it till they couldn't?


      This applies to all STR platforms, they can't allow listings without the licenses and have to automatically collect the 17% state and local hotel tax

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6mo

    I doubt its Airbnb restrictions. I bet its STR restrictions.

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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    6mo
    Quote from @Jordan Moorhead:

    Starting July 1st all of the short term rental platforms in Austin are pulling listings down that don't have a short term rental license attached to them. This means you'll have to get the license approved before July 1st to keep running a short term rental in Austin if you use Airbnb, VRBO, Booking.com, etc to get guests. They'll also be collecting the 17% state and local hotel tax now too because they know who's running an STR.

    How do you think this will affect the short term rental supply in Austin? I have to imagine a lot will pull their listings because it will no longer make sense but I'm curious to know what everyone else thinks.


    This could add more supply to the already crowded sales market as people sell non performing properties too.

    I'm interested to see what happens with STR's here in Austin and imagine we won't be the last city to implement this!


     I don't think it will affect that much regarding the tax part since airbnb has already been collecting that already as far as I can tell - maybe on the edges with people that were mostly outside airbnb - for me its been an absolute pain with the Austin Finance System, the multi-month wait times and the just overall massively confusing and frustrating nature of the bureaucracy of it all - but I would definitely welcome some reduction in supply to come with it to get bookings / prices boosted a bit again

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  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    5mo

    Shouldn't state and local tax always have been charged, collected, and remitted?

    IN FL its criminal to not charge or especially charge and not remit those taxes.

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  • Todd Goedeke
    Contractor · Sheboygan, WI · Member since 2016 · 921 posts · 266 votes
    5mo

    @Jordan Moorhead how does Austin know who is renting their property as a STVR if it does not appear on any platforms? 

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    • Aaron Gordy
      Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
      5mo
      Quote from @Todd Goedeke:

      @Jordan Moorhead how does Austin know who is renting their property as a STVR if it does not appear on any platforms? 


      Bam! You just hit the nail on the head. Austin is short staffed and under budgeted. They are also under threat of losing an additional 2.5 mil if Abbot has his way. In my experience Austin has been all talk and very little substance of controlling the str game. They need tourists. They are having an event lined up to get more community involvement regarding the musical impact and tourism. In other words they are really concerned.  https://www.facebook.com/events/paramount-theatre/future-of-...

      They need to keep str costs lower to increase tourism. The only way to do that is to allow for more folks to do str. I suspect that if they do indeed figure out a way to get money from an ordinance such as this one then they will drive up ADR and have a real negative impact upon tourism and folks will instead go to the many other great events around the nation. Austin doesn't have a monopoly on those events. 

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    • Jordan MoorheadBusiness Member
      OP
      Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
      5mo
      Quote from @Todd Goedeke:

      @Jordan Moorhead how does Austin know who is renting their property as a STVR if it does not appear on any platforms? 


       I don't think they would

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    • Jordan MoorheadBusiness Member
      OP
      Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
      5mo
      Quote from @Aaron Gordy:
      Quote from @Todd Goedeke:

      @Jordan Moorhead how does Austin know who is renting their property as a STVR if it does not appear on any platforms? 


      Bam! You just hit the nail on the head. Austin is short staffed and under budgeted. They are also under threat of losing an additional 2.5 mil if Abbot has his way. In my experience Austin has been all talk and very little substance of controlling the str game. They need tourists. They are having an event lined up to get more community involvement regarding the musical impact and tourism. In other words they are really concerned.  https://www.facebook.com/events/paramount-theatre/future-of-...

      They need to keep str costs lower to increase tourism. The only way to do that is to allow for more folks to do str. I suspect that if they do indeed figure out a way to get money from an ordinance such as this one then they will drive up ADR and have a real negative impact upon tourism and folks will instead go to the many other great events around the nation. Austin doesn't have a monopoly on those events. 


      They won't know necessarily but the STR platforms will not allow you to be on there without a license so you'd have to get direct bookings.

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  • Stephen Delahoussaye
    Real Estate Broker · Nashville, TN · Member since 2022 · 163 posts · 87 votes
    5mo

    Jordan, great thread. Nashville has been through a version of this already and I think the Austin rollout is going to follow a similar arc.

    Nashville required STR permits starting in 2015 and has been tightening enforcement ever since. The city now has about 5,500 active permits across 285,000+ parcels, and eligibility is entirely zone-dependent. Some zones allow non-owner-occupied permits, others only owner-occupied, and a handful are completely blocked. The kicker is that it varies block by block in some neighborhoods because of overlay districts.

    What happened here when enforcement ramped up: a chunk of unlicensed operators quietly exited, some converted to midterm or long-term rentals, and a smaller group went through the actual permitting process. The net effect was exactly what John described above — supply thinned out, ADR stabilized for compliant operators, and the ones who had done the homework ended up in a stronger position.

    The part I'd flag for Austin operators: the bureaucracy Robin mentioned tends to get worse before it gets better. Nashville's permit process still takes weeks and the zoning code is genuinely confusing. Over 400 permits expired in the last 12 months alone, some because owners didn't realize renewal was required, others because they sold or gave up.

    My two cents — if you're operating in Austin and haven't gotten your license yet, do it now. The cities that have gone through this cycle (Nashville, New Orleans, Denver) all eventually start cross-referencing platform listings against their permit database. Once that happens, unlicensed listings don't just get pulled — they get fined.

    1Reply
  • Thomas TalbertBusiness Member
    Property Manager · Austin, TX · Member since 2024 · 96 posts · 71 votes
    5mo

    I doubt that the city of Austin actually limits the amount of licenses it will assign. I think that the very nature of having there be some additional paper work. There's going to be at least 30% of the current str inventory in Austin that will drop off because people are lazy. 


    This will basically be a "annual vehicle inspection fee" A total money grab from the city of Austin.

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  • Leah WalczakBusiness Member
    Specialist · Phoenix, AZ · Member since 2026 · 18 posts · 7 votes
    5mo

    This is the exact scenario that makes the LTR pressure-test non-negotiable for Austin STR owners. The question every unlicensed Austin investor should be answering right now: if you can't get the permit approved by July 1, does the LTR rent on your property cover debt service? That's what determines whether this is a forced sale or a forced pivot. My rough read on Austin SFR: most STR properties bought 2020-2022 pencil maybe 70-85% LTR coverage at today's rent levels — close but not enough. Which means a lot of people are about to find out their deal only worked as an STR. For market supply, this is probably a 15-20% cut to Austin's permitted inventory over the next six months — good for licensed operators.

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  • Michael Koeplin
    Saint Paul, MN · Member since 2015 · 56 posts · 33 votes
    4mo

    I think this is part of a broader shift where STRs are increasingly being treated less like passive residential rentals and more like regulated operating businesses.

    The fee itself probably isn’t what changes the market. The bigger issue is cumulative operational complexity:

    • permits
    • taxes
    • compliance
    • inspections
    • platform verification
    • insurance requirements
    • renewal tracking

    Individually manageable. Collectively significant.

    My guess is the operators who survive long-term will increasingly be the ones with:

    • stronger systems
    • better capitalization
    • tighter compliance processes
    • more operational discipline

    Which probably does thin supply over time, especially among marginal operators.

    Michael Koeplin

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