Davidson County, Tennessee Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Davidson County, Tennessee?

Short-term rentals have become increasingly popular in Davidson County, Tennessee, encompassing the city of Nashville. However, operating an STR in this area involves navigating a complex regulatory landscape. This article outlines the key regulations, permit requirements, and experiences of hosts in Davidson County.

Starting a Short-Term Rental Business in Davidson County

Permit Requirements

In Davidson County, anyone wishing to rent a property on booking platforms like Airbnb or VRBO must obtain a permit from the Metro Codes Department. There are two main types of permits: owner-occupied and non-owner-occupied.

• Owner-Occupied Permits: These are for properties where the owner lives on-site.
• Non-Owner-Occupied Permits: These are for properties where the owner does not reside. New non-owner-occupied permits are restricted to certain non-residentially zoned areas.

Zoning Laws

Metro Nashville's zoning laws play a crucial role in determining where short-term rentals can operate. These laws are enforced by the Metro Council and are designed to ensure that STRs comply with local ordinances and safety standards. Failure to adhere to these zoning laws can result in penalties.

Operating a short-term rental in Davidson County, Tennessee, requires careful adherence to local regulations, zoning laws, and tax obligations. While the potential for revenue exists, hosts must navigate a challenging regulatory landscape and address concerns from neighbors and the community. By understanding the requirements and learning from the experiences of other hosts, prospective STR operators can better prepare for the complexities of running a short-term rental in this area.

Short-Term Rental Licensing Requirements in Davidson County

Starting a short-term rental business in Davidson County, Tennessee, involves a series of steps to ensure compliance with local regulations. Below is a comprehensive guide to the licensing requirements, including where to submit applications, fees, and the typical timeline for the process.

Licensing Requirements

To legally operate a short-term rental in Davidson County, property owners must obtain a permit from the Metro Codes Department. The requirements differ slightly depending on whether the property is owner-occupied or non-owner-occupied.

General Requirements

1. Application Form: Complete the STRP (Short Term Rental Property) permit application available on the Metro Codes Department website.
2. Proof of Ownership or Lease: Provide documentation proving ownership or a lease agreement if you are a tenant.
3. Floor Plan: Submit a detailed floor plan of the property.
4. Proof of Insurance: Provide evidence of liability insurance.
5. Identification: Submit a copy of a government-issued ID.
6. Tax Compliance: Show proof of registration for business, sales, and hotel occupancy taxes.
7. Neighbor Notification: Notify neighbors within a certain radius of the property.
8. Inspection: Pass an inspection by the Metro Codes Department to ensure the property meets safety standards.

Specific Requirements for Owner-Occupied Permits

1. The property must be the primary residence of the owner.
2. The owner must reside on the property during the rental period.

Specific Requirements for Non-Owner-Occupied Permits

1. These permits are only available in certain non-residentially zoned areas.
2. New non-owner-occupied permits are subject to stricter zoning regulations and availability.

Submission and Fees

1. Where to Submit: Applications and supporting documents must be submitted to the Metro Codes Department, either online or in person.
2. Permit Fee: The permit application fee is $313, which must be paid upon approval of the inspection.
3. Renewal: Permits must be renewed annually. Operating under an expired permit can result in a one-year prohibition from obtaining a new permit.

Timeline

The process from application to receiving the permit typically involves the following steps:

1. Application Submission: Submit the completed application and required documents.
2. Review Period: The Metro Codes Department reviews the application and schedules an inspection.
3. Inspection: An inspector visits the property to ensure it meets all safety and zoning requirements.
4. Approval and Payment: Once the inspection is approved, pay the permit fee.
5. Permit Issuance: Receive the permit, allowing the property to be listed on platforms like Airbnb and VRBO.

The entire process can take several weeks, depending on the completeness of the application and the availability of inspection slots.

Fines and Penalties

Operating a short-term rental without a proper license can result in significant penalties:

1. Fines: Non-compliance can lead to fines of $50 per violation per day.
2. Permit Revocation: If a permit is revoked, the property owner cannot obtain a new permit for the same property for one year from the date of revocation.
3. Enforcement: The Metro Codes Department, along with private firms like Host Compliance, actively monitors and enforces these regulations. Persistent non-compliance can lead to more severe penalties, including legal action and permanent revocation of the permit.

By understanding and adhering to these licensing requirements, short-term rental operators in Davidson County can ensure they remain compliant with local laws and avoid costly penalties.

Required Documents for Davidson County Short-Term Rentals

To operate a short-term rental in Davidson County, several documents are required as part of the permit application process. Here's a comprehensive list of the necessary documents along with explanations of their purpose and where to obtain them:

STRP Permit Application Form

1. Initiates the permit process and provides basic information about the property and owner.
2. Available on the Metro Codes Department website.

Floor Plan

1. Illustrates the layout of the rental space, including rooms, windows, doors, and smoke detector locations.
2. Can be official or hand-drawn by the applicant.

Proof of Liability Insurance

• Ensures the property has adequate coverage (minimum $1 million per occurrence).
• From your insurance provider or through some listing platforms like Airbnb.

Proof of Residence (for owner-occupied permits)

• Verifies that the property is the owner's primary residence.
• Two forms of identification such as TN driver's license, voter registration card, pay stub, or bank statement.

Proof of Property Ownership

• Confirms the applicant's right to use the property as an STR.
• Property deed from the Davidson County Clerk's office.

Proof of Notification to Adjacent Property Owners

• Ensures neighbors are informed of the intent to operate an STR.
• Use the notification template provided by Metro Codes.

Proof of Tax Compliance

• Verifies all property taxes and applicable room, occupancy, and sales taxes are paid.
• Metropolitan Trustee's office for property taxes; Office of the Treasurer for other taxes.

Responsible Party Information

• Designates a local contact, such as a co-host or property manager, for emergencies or complaints.
• Provide details of a person residing within a 25-mile radius of the property.

Homeowners Association Statement

• Confirms the STR doesn't violate any HOA agreements or bylaws.
• Self-prepared statement or use the template provided by Metro Codes.

Notarized Affidavit

• Attests to the accuracy of all provided information.
• Prepare and have notarized.

Authorization Affidavit (if applicable)

• Allows a third party to apply for the permit on behalf of the owner.
• Template available from Metro Codes Department.

These documents form the core of the application process for short-term rental permits in Davidson County. Ensuring all these documents are prepared correctly and submitted together can significantly streamline the application process and reduce delays in obtaining your permit.

Davidson County Short-Term Rental Taxes

Short-term rental operators in Davidson County, Tennessee, are subject to several taxes. Understanding these tax obligations is crucial for compliance and financial planning. Here's a breakdown of the primary taxes that apply to short-term rentals in the county:

State and Local Sales Tax

Short-term rentals in Davidson County are subject to both state and local sales taxes:

• State Sales Tax: 7% of the rental price
• Local Sales Tax: 2.25% for Davidson County

The combined sales tax rate for short-term rentals in Davidson County is 9.25%.

Hotel Occupancy Tax

Davidson County imposes a hotel occupancy tax on short-term rentals:

County Hotel Occupancy Tax: 6% of the rental price

Additional Taxes

State Mixed Drink Tax: If alcoholic beverages are provided as part of the rental, an additional 15% tax may apply.

Tax Collection and Remittance

Short-term rental operators are responsible for collecting these taxes from guests and remitting them to the appropriate authorities. The Tennessee Department of Revenue handles the collection of state and local sales taxes, while the county hotel occupancy tax is typically paid directly to Davidson County.

Possible Write-offs and Deductions

Short-term rental hosts in Davidson County may be eligible for several tax deductions that can help reduce their taxable income. Some potential write-offs include:

1. Operating Expenses: Costs such as property management fees, advertising expenses, and cleaning services.
2. Repairs and Maintenance: Expenses related to property upkeep and repairs.
3. Utilities: Costs for electricity, water, and internet service used during rentals.
4. Depreciation: On property assets like furniture and appliances.
5. InsuranceCosts: Related to the short-term rental property.

It's important to keep detailed records of all expenses related to your short-term rental business to maximize potential deductions. Consulting with a tax professional familiar with short-term rental regulations in Davidson County can help ensure you're taking advantage of all available deductions while remaining compliant with tax laws.

Remember that tax rates and regulations can change, so it's advisable to regularly check with local authorities or a tax professional for the most up-to-date information on short-term rental taxes in Davidson County.

Tennessee Wide Short-Term Rental Rules

The state of Tennessee has implemented several regulations that affect short-term rental hosts across all counties, including Davidson County. These state-wide rules provide a framework within which local governments can operate, while also protecting the rights of property owners. Here are the key state-wide requirements that impact Davidson County hosts:

The Short-Term Rental Unit Act

The Tennessee Short-Term Rental Unit Act, which became effective on May 17, 2018, is the primary legislation governing short-term rentals across the state. This act has several important provisions:

1. Legacy Clause: Properties that were being used as short-term rentals before the enactment of local regulations are generally allowed to continue operating under the rules that were in place when they started. This protection applies until the property is sold, transferred, ceases being used as a short-term rental for 30 continuous months, or violates local laws three or more times.
2. Local Regulation Limits: The Act prohibits local governments from excessively regulating or banning short-term rentals based solely on their usage. This provision ensures that Davidson County cannot implement overly restrictive regulations without justification.
3. Safety Standards: All short-term rental properties in Tennessee must comply with state property requirements related to fire safety, including the installation of smoke alarms in each sleeping area.

Tax Obligations

Short-term rental hosts in Tennessee, including those in Davidson County, are subject to several tax requirements:

1. State and Local Sales Tax: Hosts must collect and remit state sales tax (7%) and local sales tax (which varies by locality).
2. Hotel Occupancy Tax: Short-term rentals are classified as hotels for tax purposes, requiring hosts to collect and remit applicable hotel occupancy taxes.
3. Business Tax Registration: Hosts with annual taxable gross earnings of $10,000 or more must apply for a business tax registration.

Compliance and Reporting

1. Tax Collection Platforms: Tennessee authorizes short-term rental platforms like Airbnb to collect and remit sales and hotel occupancy taxes on behalf of hosts, simplifying the process for many operators.
2. Record Keeping: Hosts are required to maintain accurate records of their rental activity for tax and compliance purposes.

Property Standards

1. Safety Measures: All short-term rental properties must have functioning smoke detectors and carbon monoxide detectors in every sleeping area.
2. Building Codes: Properties must comply with all applicable state building codes and safety regulations.

Non-Discrimination

Short-term rental hosts in Tennessee are subject to federal and state fair housing laws, prohibiting discrimination based on race, color, religion, sex, national origin, disability, or familial status.

While these state-wide rules provide a baseline for short-term rental operations in Davidson County, it's important to note that local authorities can still impose additional regulations to address specific community concerns, as long as they don't conflict with state law. Davidson County hosts should stay informed about both state and local regulations to ensure full compliance with all applicable laws.

Does Davidson County Strictly Enforce STR Rules?

Davidson County is known for its strict enforcement of short-term rental regulations. Compared to other counties, Davidson County has implemented comprehensive rules and actively monitors compliance to ensure that STR operators adhere to local laws.

Davidson County's Metro Codes Department is diligent in enforcing STR regulations. The county has hired additional code inspectors specifically to address the issue of illegal short-term rentals. These inspectors focus on properties operating without the required permits and respond to complaints about noise, parking, and other nuisances. The county also employs Host Compliance, a private investigation firm, to identify unpermitted STRs by cross-referencing online listings with the county's database of permits.

The penalties for operating an STR without a permit in Davidson County are significant. Violators can be fined $50 per day for each day they operate without a permit. In more severe cases, such as repeated violations, property owners may face legal action, including jail time. For instance, a local host was sentenced to jail after repeatedly ignoring orders to shut down his illegal Airbnb.

Feedback from local residents and hosts on platforms like Reddit and Bigger Pockets indicates mixed feelings about the county's approach to STRs. Some residents appreciate the strict enforcement, as it helps maintain neighborhood quality and addresses issues related to noise and parking. However, others express frustration over the perceived inconsistency in enforcement, noting that some illegal STRs continue to operate despite the regulations.

Despite the strict regulations, many hosts continue to operate in Davidson County. Some hosts have shared their experiences of navigating the complex regulatory landscape and the financial challenges of running an STR in a highly regulated environment. For example, a user on Bigger Pockets discussed the high costs and seasonal fluctuations in revenue, emphasizing the importance of cost-cutting measures to maintain profitability.

How to Start a Short-Term Rental Business in Davidson County

Starting a short-term rental business in Davidson County, Tennessee, involves several steps to ensure compliance with local regulations. Here’s a detailed guide to help you get started:

1. Check Zoning Requirements

1. Before you begin the application process, verify that your property is in a zone that allows short-term rentals.
2. How to Check: Use the Metro Parcel Viewer on the Metro Nashville website to determine your property's zoning classification.
3. Tip: Ensure your property meets the specific zoning requirements for either owner-occupied or non-owner-occupied permits.

2. Gather Required Documents

Collect all necessary documents to streamline your application process.

Documents Needed:

1. Proof of Ownership: Property deed or lease agreement.
2. Floor Plan: A detailed layout of the property, including rooms, windows, doors, and smoke detectors.
3. Proof of Insurance:Liability insurance with a minimum coverage of $1 million per occurrence.
4. Proof of Residence (for owner-occupied permits): Two forms of ID showing the property address (e.g., TN driver’s license, voter registration card).
5. Neighbor Notification: Proof of written notification to adjacent property owners.
6. Tax Compliance: Proof of registration for business, sales, and hotel occupancy taxes.
7. Notarized Affidavit: Confirming the accuracy of the provided information.
8. Homeowners Association Statement: If applicable, a statement confirming compliance with HOA rules.

3. Submit Your Application

Submit your application along with the required documents to the Metro Codes Department.

1. How to Submit: Applications can be submitted online or in person at the Metro Codes Department.
2. Fee: A non-refundable application fee of $313 must be paid upon approval of the inspection.
3. Tip: Ensure all documents are complete and accurate to avoid delays.

4. Property Inspection

Schedule an inspection of your property to ensure it meets all safety and health regulations.

1. Inspection Requirements: The property must comply with fire safety standards, including the installation of smoke detectors in all sleeping areas.
2. How to Schedule: Contact the Metro Codes Department to arrange an inspection.
3. Tip: Prepare your property thoroughly to pass the inspection on the first attempt.

5. Receive Your Permit

Once your application is approved and the property passes inspection, you will receive your short-term rental permit.

1. Permit Display: The permit must be prominently displayed in the rental property.
2. Tip: Keep a copy of the permit on hand for any potential inspections or inquiries.

6. Comply with Tax Obligations

Ensure you are registered for and remit all applicable taxes.

1. Taxes: Business tax, sales tax (7% state and 2.25% local), and hotel occupancy tax (6%).
2. How to Register: Register with the Tennessee Department of Revenue and the Davidson County Office of the Treasurer.
3. Tip: Use platforms that collect and remit taxes on your behalf to simplify the process.

7. Renew Your Permit Annually

Permits must be renewed every year to remain in compliance.

1. Renewal Process: Submit a renewal application before the current permit expires.
2. Tip: Mark your calendar with the renewal date to avoid operating under an expired permit, which can result in a one-year prohibition from obtaining a new permit.

Tips for Success

1. Stay Informed: Regularly check for updates on local regulations to ensure ongoing compliance.
2. Engage with the Community: Join local host groups or forums on platforms like Reddit and Bigger Pockets to share experiences and get advice.
3. Maintain Good Relations with Neighbors: Address any concerns promptly to avoid complaints that could jeopardize your permit.

By following these steps and tips, you can successfully start and operate a short-term rental business in Davidson County, ensuring compliance with all local regulations and maximizing your rental income.

Who to Contact in Davidson County about Short-Term Rental Regulations and Zoning?

For inquiries about short-term rental regulations and zoning in Davidson County, the following contacts and resources are available:

Metro Codes Department

The Metro Codes Department is the primary authority for short-term rental permits and regulations in Davidson County.

1. Phone: 615-862-6590
2. Email: codes.customerservice@nashville.gov
3. Website: https://www.nashville.gov/departments/codes/short-term-rentals

Short-Term Rental Property Hotline

For complaints or concerns about short-term rentals:

Phone: 435-STR-HELP (435-787-4357)

Online Complaint Form

To file a complaint about a short-term rental property:

Website: https://www.nashville.gov/departments/codes/property-standards/file-complaint

Useful Community Resources for Hosts

Nashville Short Term Rental Association (NASTRA)

1. A local organization representing short-term rental owners and operators in Nashville.
2. Website: https://www.nastra.org/

Bigger Pockets Forum - Nashville Real Estate

1. An active online community where local hosts share experiences and advice.
2. Forum Link: https://www.biggerpockets.com/forums/530/topics/606108-my-experience-running-a-short-term-rental-in-nashville-tn

Facebook Group: Nashville Airbnb Hosts

1. A private group for Nashville Airbnb hosts to connect and share information.
2. Group Link: https://www.facebook.com/groups/NashvilleAirbnbHosts/

Nashville Short Term Rental Alliance

1. An advocacy group for short-term rental owners in Nashville.
2. Website: https://nashvillestra.com/

These official contacts and community resources can provide valuable information and support for those navigating the short-term rental landscape in Davidson County. Remember to always verify information with official sources, as regulations may change over time.

What Do Airbnb Hosts in Davidson County on Reddit and Bigger Pockets Think about Local Regulations?

Apartment Complex Conversions:

A user expressed concern about their apartment complex converting multiple units into full-time Airbnbs managed by a third-party company. The thread highlights the frustration of residents facing rent increases and the perceived unfairness of the situation. The discussion also touches on the complexities of legality and enforcement of such conversions.

Impact on Housing Affordability:

This thread discusses the significant number of Airbnb hosts in Nashville who manage multiple listings. Users argue that this trend contributes to the scarcity of affordable housing. Some users suggest imposing steep taxes on hosts with multiple properties to mitigate the impact on local housing markets.

Navigating Regulations and Financial Viability:

A host shared their challenging experience with Nashville's STR regulations, including losing a permit due to a clerical error and the aggressive enforcement by local authorities. The host detailed the financial aspects of running an STR, highlighting high expenses and the impact of stringent regulations on profitability. They advised against investing in single-family homes for Airbnb due to the regulatory environment and financial challenges.

Exploring the Market:

A new investor expressed interest in the Nashville STR market and sought advice from experienced hosts. The responses emphasized the importance of understanding local regulations and the financial commitment required to succeed in this market. Experienced hosts advised on the need for thorough research and networking with local experts.

The consensus among Airbnb hosts in Davidson County, as reflected in discussions on Reddit and Bigger Pockets, is that while the market offers lucrative opportunities, it is also fraught with challenges due to stringent regulations and active enforcement. Hosts emphasize the importance of understanding local laws, maintaining compliance, and being prepared for significant financial and operational commitments. Despite the hurdles, many hosts continue to operate successfully by staying informed and adapting to the evolving regulatory landscape.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.