Galveston County, Texas Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Galveston County

To legally operate a short-term rental in Galveston County, Texas, property owners must follow specific regulations set by the county and individual cities. In Galveston, STR owners are required to register their properties with the Park Board of Trustees and pay a $50 annual registration fee. New rental properties or those transitioning from a management company to independent management must pay a one-time $250 registration fee.

STR owners in Galveston County are also responsible for collecting and remitting a 9% Hotel Occupancy Tax (HOT) on gross revenues, which include the nightly rental rate, cleaning fees, pet fees, smoking fees, and rental damages. The Park Board provides an online system for reporting and paying taxes monthly or quarterly, depending on the amount of taxes generated. Even if no revenue is generated, a report must still be filed on time to avoid a $25 fine.

Failure to comply with STR registration or HOT payment requirements is considered a Class C misdemeanor offense, punishable by a fine of up to $500 per offense, with each day constituting a separate offense. Late payment penalties and interest will be assessed on all payments received after the due date, and delinquent or non-registered properties are subject to legal action.

As of May 2024, the Galveston County Appraisal District began taxing short-term rentals as businesses, meaning any furnishings or fixtures on the property would be valued for taxation, potentially increasing tax bills. This move aims to make the county's real estate market more equitable, as furnished short-term rentals typically sell for more than single-family homes.

To ensure compliance, the Galveston Park Board uses software to track listings and has found that out of approximately 4,500 listings, about 539 residents are not registered. The Short-Term Rental Owners Association of Galveston (STRR) provides a website where potential renters can verify if a property is registered and in compliance.

When listing properties on platforms like Airbnb and Vrbo, which have voluntary collection agreements with the Texas State Comptroller's Office, the platforms are responsible for collecting and remitting the state's hotel occupancy tax. However, city-level taxes must still be reported and filed by the STR owner, even if the platform collects and remits them.

In summary, to legally operate a short-term rental in Galveston County, Texas, property owners must:

• Register their property with the Park Board of Trustees and pay applicable fees
• Collect and remit a 9% Hotel Occupancy Tax on gross revenues
• File tax reports monthly or quarterly, even if no revenue is generated
• Comply with any additional regulations set by individual cities within the county

Failure to adhere to these regulations can result in fines, legal action, and potential increases in property tax bills.

Short-Term Rental Licensing Requirement in Galveston County

While the city of Galveston has specific regulations for short-term rentals, Galveston County does not currently have a separate licensing requirement for STRs operating in unincorporated areas of the county. However, STR owners in these areas are still subject to state and county taxes, as well as any applicable HOA or community rules.

To ensure compliance with local regulations, it is recommended that STR owners in Galveston County:

1. Register with the Texas Comptroller's Office and obtain a Texas Taxpayer Number to collect and remit the required 6% state Hotel Occupancy Tax (HOT).
2. Contact the Galveston County Tax Assessor-Collector's Office to determine if there are any additional county taxes or requirements for STRs.
3. Review and adhere to any rules or restrictions set by their local Homeowners Association (HOA) or community regarding short-term rentals.
4. If the property is located within the city limits of Galveston, follow the city's STR registration process, which includes:
   - Registering the property annually with the Galveston Park Board of Trustees by December 31st
   - Paying a $250 registration fee for both new registrations and renewals
   - Collecting and remitting the 9% city Hotel Occupancy Tax on a monthly or quarterly basis

Failure to comply with the city of Galveston's STR registration or HOT payment requirements is considered a Class C misdemeanor offense, punishable by a fine of up to $500 per offense, with each day constituting a separate offense. Late payment penalties and interest will also be assessed on all payments received after the due date.

As regulations can change over time, it is crucial for STR owners in Galveston County to stay informed about any updates to local, county, or state requirements to avoid potential fines or legal issues.

Required Documents for Galveston County Short-Term Rentals

While Galveston County does not have specific licensing requirements for short-term rentals in unincorporated areas, property owners within the city limits of Galveston must register their STRs annually with the Galveston Park Board of Trustees. The following documents are required for STR registration in the city of Galveston:

1. Completed STR Registration Form: This form collects essential information about the property, owner, and local contact. It can be completed online through the Park Board's registration portal.
2. Property ID Number: This unique 6-digit number is assigned by the Galveston Central Appraisal District (GCAD) and can be found on the GCAD website by searching for the property address or owner's name.
3. Proof of Property Ownership: A copy of the deed or other legal document demonstrating ownership of the property is required.
4. Local Contact Information: The name, address, and 24/7 contact information for a local representative who can respond to any issues or complaints within one hour.
5. Maximum Occupancy: The maximum number of guests allowed to stay overnight and gather during the day at the STR property.
6. Rental Commencement Date: The date when the property first became available for short-term rental.
7. Third-Party Booking Platform Information: Account numbers and/or marketing names used on platforms like Airbnb and Vrbo.
8. Registration Fee: A one-time $250 fee for new registrations and annual renewals, payable online or by check.

Once all required documents are submitted and the registration fee is paid, the property will be assigned a unique Galveston Vacation Rental (GVR) number. This number must be displayed on all advertisements for the STR, including listing pages on third-party platforms.

It is crucial for STR owners in Galveston to ensure they have all the necessary documents and comply with the city's registration requirements to avoid potential fines or legal action. For properties located outside the city limits, owners should contact the Galveston County Tax Assessor-Collector's Office to determine any additional county-level requirements.

Galveston County Short-Term Rental Taxes

Short-term rental owners in Galveston County are subject to various taxes at the state, county, and city levels. Understanding these taxes and potential deductions is crucial for operating a successful and compliant STR business.

State Hotel Occupancy Tax

The state of Texas imposes a 6% Hotel Occupancy Tax (HOT) on the rental of rooms or spaces in a hotel, motel, or other lodging facility, including STRs. This tax is collected by the property owner and remitted to the Texas Comptroller's Office on a quarterly basis.

Galveston City Hotel Occupancy Tax

In addition to the state tax, the city of Galveston levies a 9% Hotel Occupancy Tax on gross rental revenues, which include the nightly rental rate, cleaning fees, pet fees, smoking fees, and rental damages. STR owners within the city limits must register their properties with the Galveston Park Board of Trustees and remit the city HOT on a monthly or quarterly basis, depending on the amount of taxes generated.

For example, if a short-term rental costs $100 per night, Galveston is supposed to receive $9 in city HOT, and the state is supposed to get $6 in state HOT.

Personal Property Tax

As of May 2024, the Galveston Central Appraisal District began treating short-term rentals as businesses by calculating the value of furnishings and equipment under their roofs. STR owners are now responsible for paying a tax on any personal business property they use to earn rental income. The exact amount of this tax will vary based on the appraised value of the personal property.

Potential Deductions and Write-Offs

STR owners may be eligible for various tax deductions to help offset their tax liabilities. Some potential deductions include:

1. Property taxes: A portion of property taxes paid on the STR may be deductible based on the percentage of rental use.
2. Mortgage interest: The interest component of mortgage payments on the STR property is deductible.
3. Depreciation: STR owners can deduct a portion of the property's value each year to account for wear and tear.
4. Repairs and maintenance: Expenses incurred to maintain or repair the STR property are fully deductible.
5. Cleaning and supplies: All expenses related to cleaning the STR, including cleaning services and supplies, are deductible.
6. Insurance premiums: Premiums paid for rental property insurance are deductible.
7. Advertising and marketing: Expenses incurred in promoting the STR, such as listing fees on platforms like Airbnb and Vrbo, are deductible.

To maximize deductions and ensure compliance, STR owners should keep accurate records of all income and expenses, consult with a tax professional, and stay informed about any changes to local, county, or state tax regulations.

Texas Wide Short-Term Rental Rules

While most short-term rental regulations in Texas are determined at the local level by cities and counties, there are a few state-wide rules that affect Galveston County hosts.

Texas Hotel Occupancy Tax

All STRs in Texas are subject to the state's Hotel Occupancy Tax (HOT) of 6%. STR owners must register with the Texas Comptroller's Office, collect the tax from guests, and file quarterly tax returns. However, if an online platform like Airbnb or Vrbo collects and remits the state HOT on behalf of the host, the host does not need to register or file returns for the state tax.

Homeowners Association Rules

Texas state law allows homeowners associations (HOAs) to regulate or prohibit short-term rentals within their communities. If an STR property is located within an HOA, the owner must comply with any rules or restrictions set by the HOA regarding rentals, even if the city or county allows them.

Occupancy Limits

While there is no state-wide occupancy limit for STRs in Texas, many cities have adopted their own restrictions. For example, the city of Galveston limits occupancy to a maximum of 10 adults per STR unit. Hosts should check with their local government for any specific occupancy requirements.

Advertising Requirements

Texas law does not currently impose any state-wide advertising requirements for STRs, such as including a permit number in listings. However, some cities like Galveston require hosts to display their city-issued permit number on all advertisements.

Enforcement and Penalties

Enforcement of STR regulations and penalties for violations are primarily handled at the local level. However, failure to comply with state tax requirements can result in fines and legal action from the Texas Comptroller's Office.

As the STR industry continues to grow in Texas, state lawmakers have attempted to address the issue with legislation that would limit local governments' ability to ban or heavily restrict STRs. However, for now, hosts in Galveston County should stay informed about any new state-wide regulations while also complying with all city and county requirements for operating a short-term rental.

Does Galveston County Strictly Enforce STR Rules?

Based on discussions in real estate forums like BiggerPockets and Reddit, Galveston County appears to be relatively Airbnb-friendly compared to some other cities, but hosts still need to follow the rules and regulations carefully to avoid penalties.

The county has been increasing its enforcement efforts in recent years. In 2021, the City of Galveston passed Ordinance 21-021 requiring short-term rental owners to display their Galveston Vacation Rental (GVR) registration number on all advertisements, including third-party booking platforms. The Galveston Park Board uses software to track listings and identify non-compliant properties. As of February 2024, out of approximately 4,500 listings, the Park Board found that 539 residents were not registered, meaning the city was missing out on nearly $135,000 in registration fees alone.

Failure to comply with STR registration or hotel occupancy tax payment requirements is a Class C misdemeanor offense in Galveston, punishable by a fine of up to $500 per offense, with each day constituting a separate offense. Delinquent or non-registered properties are subject to legal action. In 2024, the city collected $75,000 in back taxes from just two non-compliant owners.

Despite the potential consequences, some hosts still attempt to operate under the radar in Galveston County. One Reddit user mentioned that a woman in a Galveston Facebook group complained about owing $90,000 in back taxes for the past 10 years on her unregistered STR properties. However, with the city's increasing use of tracking software and the county's move to tax STRs as businesses starting in May 2024, it is becoming increasingly difficult for hosts to evade detection.

Overall, while Galveston County may be more Airbnb-friendly than some other cities, hosts should not attempt to skirt the rules. The county is serious about enforcing its STR regulations and ensuring a level playing field for all property owners. Hosts who fail to comply risk significant financial penalties and legal action.

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

Starting a short-term rental business in Galveston County can be a lucrative venture, but it requires careful planning and compliance with local regulations. Follow these steps to successfully launch your STR business:

Research local regulations and zoning laws

1. Familiarize yourself with Galveston County's STR ordinances and any specific rules for the city or community where your property is located.
2. Ensure your property is zoned for short-term rentals and complies with all building and safety codes.
3. Consult with local authorities or a professional vacation rental licensing consultant to ensure you understand all requirements.

Register your business and obtain necessary permits

1. Register your STR business with the Texas Secretary of State and obtain an Employer Identification Number (EIN) from the IRS.
2. Apply for a Texas sales tax permit, which is required for all businesses that rent tangible property.
3. If your property is located within Galveston city limits, register it annually with the Galveston Park Board of Trustees and pay the $50 registration fee.
4. Keep detailed records of all registrations, permits, and fees paid to ensure ongoing compliance.

Prepare your property for rental

1. Ensure your property is clean, well-maintained, and equipped with all necessary amenities to provide a comfortable stay for guests.
2. Consider hiring a professional photographer to capture high-quality images of your property for your listings.
3. Develop a comprehensive property manual that includes house rules, local recommendations, and emergency contact information.
4. Invest in quality furnishings and amenities to attract more bookings and positive reviews.

Create a pricing strategy and set up your listings

1. Research comparable STRs in your area to determine competitive nightly rates and adjust your prices based on seasonal demand.
2. Create listings on popular vacation rental platforms like Airbnb and Vrbo, ensuring you include detailed descriptions, high-quality photos, and your Galveston Vacation Rental (GVR) number.
3. Offer competitive rates and attractive amenities to stand out from other listings and secure more bookings.

Establish a system for managing bookings and guest communication

1. Choose a reliable property management software to streamline booking management, guest communication, and cleaning schedules.
2. Develop standard operating procedures for handling bookings, check-ins, check-outs, and guest inquiries to ensure consistent service.
3. Respond promptly to guest inquiries and maintain open communication to build trust and encourage positive reviews.

Comply with tax requirements

• Collect and remit the 9% Galveston Hotel Occupancy Tax (HOT) on gross rental revenues, filing reports monthly or quarterly as required.
• Be aware that as of May 2024, the Galveston Central Appraisal District began treating STRs as businesses, meaning you will be responsible for paying taxes on the value of any furnishings and equipment used in your rental.
• Consult with a tax professional to ensure you are complying with all local, state, and federal tax requirements and to identify potential deductions.

Maintain your property and adapt to changes

• Regularly inspect and maintain your property to ensure it remains in top condition for guests.
• Stay informed about any changes to local STR regulations or tax requirements and adapt your business practices accordingly.
• Continuously seek feedback from guests and make improvements to your property and services based on their suggestions.

By following these steps and remaining compliant with local regulations, you can successfully start and operate a short-term rental business in Galveston County.

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

If you have questions or concerns about short-term rental regulations and zoning in Galveston County, there are several resources available to assist you:

Galveston Park Board of Trustees

• Phone: (409) 797-5000
• Email: STRR@galvestonparkboard.org
• Website: https://www.galvestonparkboard.org/174/Short-Term-Rentals
• The Park Board is responsible for registering short-term rentals and collecting Hotel Occupancy Taxes within the city of Galveston.

City of Galveston Planning and Development Services Department

• Phone: (409) 797-3660
• Email: planningcounter@galvestontx.gov
• Website: https://www.galvestontx.gov/150/Planning-Development
• Contact the Planning and Development Services Department for questions about zoning, land use regulations, and permitting requirements for short-term rentals within the city limits.

Galveston County Tax Assessor-Collector's Office

• Phone: (409) 766-2200
• Email: galcotax@co.galveston.tx.us
• Website: https://www.galvestoncountytx.gov/ta/Pages/default.aspx
• Contact the Tax Assessor-Collector's Office for information about registering your short-term rental and paying required taxes in unincorporated areas of Galveston County.

In addition to these official resources, short-term rental hosts in Galveston County may find support and information through local organizations and online communities:

Short Term Rental Owners Association of Galveston (STRR)

• Website: https://www.strrg.org/
• STRR is a non-profit organization that advocates for the rights of short-term rental owners in Galveston and provides resources to help navigate local regulations.

Galveston STR Owners Facebook Group

• Link: https://www.facebook.com/groups/galvestonstrowners/
• This private Facebook group is a community of short-term rental owners in Galveston who share experiences, advice, and updates on local regulations.

Galveston Landlords & Investors Group on BiggerPockets

• Link: https://www.biggerpockets.com/forums/533-galveston-landlords-investors
• BiggerPockets is an online real estate investing platform that hosts local forums, including one for Galveston landlords and investors to discuss topics like short-term rentals.

By reaching out to these official contacts and engaging with local short-term rental communities, hosts in Galveston County can stay informed about regulations, zoning, and best practices for operating a successful and compliant vacation rental business.

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

Airbnb hosts in Galveston County have shared their experiences and thoughts on local short-term rental regulations across various online forums. Here are some notable examples:

Reddit - r/airbnb_hosts

In a thread titled "Guests wanting to cancel due to storm (Galveston)," a host sought advice on how to handle cancellations due to an approaching hurricane. Many hosts suggested being lenient and allowing guests to cancel without penalty, as it's not worth the hassle and potential bad reviews to force them to stay during a major weather event. One host mentioned that they plan to cancel reservations if boarding up the house is necessary to avoid liability issues.

BiggerPockets Forum

In a post titled "Newbie Looking For STR in Galveston TX," a user shared their strategy of purchasing a primary residence in Galveston and renting out 1-2 rooms on Airbnb, with plans to convert the property to a full-time STR after the first year. Experienced hosts advised the user to be cautious when purchasing properties with HOAs, as they can ban short-term rentals on a whim, potentially jeopardizing their investment.

Another thread, "Looking for advice on Galveston, TX short term rental market," featured a couple interested in purchasing a historical house in Galveston to use as an STR. They expressed concerns about market saturation and the ability to generate enough rental income to cover expenses. While no definitive answers were provided, the discussion highlighted the importance of thorough market research and realistic financial projections before investing in an STR property.

Reddit - r/galveston

In a post titled "Galveston, we have a housing problem," users discussed the impact of short-term rentals on housing affordability for local residents. One commenter mentioned that the city has been slowly cracking down on unregistered STRs, using AI to cross-reference Airbnb listings with their registration database. They shared an anecdote about a woman who complained on a Galveston Facebook group about owing $90,000 in back taxes for her unregistered STR properties over the past 10 years.

These examples demonstrate that Airbnb hosts in Galveston County are navigating a complex regulatory landscape, with concerns ranging from HOA restrictions and registration requirements to the impact of STRs on the local housing market. While opinions vary, most hosts seem to agree that staying informed about local regulations, being proactive in compliance, and prioritizing guest experience are key to running a successful and sustainable STR business in the area.

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.