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

What are Short-Term Rental (Airbnb, VRBO) Regulations in Travis County, Texas?

Short-term rentals, such as those listed on Airbnb and VRBO, have become increasingly popular in Travis County, Texas. However, it's important for property owners to understand the local regulations before starting a short-term rental business. This article will provide an overview of the rules and regulations governing short-term rentals in Travis County.

Starting a Short-Term Rental Business in Travis County

Before listing your property on Airbnb or VRBO, it's crucial to familiarize yourself with the local laws and regulations. In Travis County, the rules for short-term rentals vary depending on the specific city or municipality.

In Austin, the county seat of Travis County, owners of short-term rentals are required to obtain an operating license annually. The city defines a short-term rental as a residential unit or accessory building that is rented out for less than 30 consecutive days. There are three types of short-term rental licenses in Austin:

• Type 1: Owner-occupied single-family or duplex properties
• Type 2: Single-family or duplex properties that are not owner-occupied
• Type 3: Multifamily properties that are not owner-occupied

To apply for a short-term rental license in Austin, property owners must submit the following:

1. A completed application form
2. Proof of property insurance
3. A non-refundable fee of $863.80 (as of 2023)
4. Proof of payment of Hotel Occupancy Taxes (if applicable)
5. A copy of the owner's driver's license
6. Notarized authorization from the property owner (if using a third-party agent)

It's important to note that in 2016, Austin passed an ordinance banning Type 2 short-term rentals (non-owner occupied) in residential areas. However, this ordinance was later ruled unconstitutional by a federal court in August 2023. The city is currently reviewing the court's decision and determining next steps.

Outside of Austin, short-term rental regulations vary by city. For example:

1. Lakeway requires a special use permit for short-term rentals, with a $250 fee for the initial application.
2. Rollingwood prohibits short-term rentals altogether, with fines of up to $2,000 per day for violations.
3. West Lake Hills allows short-term rentals but requires a special use permit and a $250 application fee.

In unincorporated areas of Travis County, there are currently no specific regulations on short-term rentals. However, property owners should still check for any applicable HOA rules or deed restrictions.

When advertising your short-term rental, be sure to include your license number and occupancy limit. In Austin, the occupancy is restricted to a maximum of 10 related adults or 6 unrelated adults at a time.

It's also crucial to collect and remit the appropriate taxes, including state hotel occupancy taxes (currently 6%) and any applicable city taxes. In Austin, the total hotel occupancy tax rate is 15% (9% city tax + 6% state tax).

By understanding and complying with local short-term rental regulations, property owners in Travis County can operate their businesses legally and avoid potential fines or legal issues. As always, it's recommended to consult with a local attorney or tax professional for guidance specific to your situation.

Short-Term Rental Licensing Requirements in Travis County

While the City of Austin has specific licensing requirements for short-term rentals (STRs), the regulations in unincorporated areas of Travis County are less clear. According to the Travis County website, there are currently no specific county-level regulations or permitting processes for STRs operating outside of incorporated cities.

However, this does not mean that STR operators in unincorporated Travis County are exempt from all rules and regulations. Property owners should still be aware of the following:

Hotel Occupancy Taxes: Even if an STR is not required to obtain a license from the county, the owner is still responsible for collecting and remitting hotel occupancy taxes. In Texas, the state hotel occupancy tax rate is 6%. Travis County does not currently have a separate county-level hotel tax, but STR owners should check for any applicable taxes in their specific area.

Homeowners Association Rules: If the property is located within a neighborhood governed by a homeowners association (HOA), the owner should carefully review the HOA bylaws and deed restrictions. Some HOAs may prohibit or restrict short-term rentals.

General Regulations: STR owners must still comply with general county regulations related to noise, parking, occupancy limits, and safety. Failure to do so could result in fines or other penalties.

City Regulations: If the property is located within the extraterritorial jurisdiction (ETJ) of a city, such as Austin, the owner should check with the city to determine if any STR regulations apply. Some cities may extend their STR licensing requirements to properties in the ETJ.

While there is no specific county-level STR licensing process in Travis County, property owners should still do their due diligence to ensure compliance with all applicable rules and regulations. This may involve contacting the county, researching HOA bylaws, and consulting with local legal professionals.

It's important to note that STR regulations can change over time, so owners should stay informed about any updates or changes to local laws. Failure to comply with applicable regulations could result in fines, legal action, or difficulty in continuing to operate the short-term rental.

Required Documents for Travis County Short-Term Rentals

While there are no specific county-level licensing requirements for short-term rentals (STRs) in unincorporated areas of Travis County, property owners should be aware of the following documents and requirements:

Hotel Occupancy Tax Registration: STR owners must register with the Texas Comptroller's office to collect and remit the 6% state hotel occupancy tax. This can be done online through the Comptroller's website.

Insurance: Although not required by the county, it is highly recommended that STR owners obtain appropriate insurance coverage for their rental property. This may include a commercial liability policy or a specific vacation rental insurance policy.

Homeowners Association (HOA) Rules: If the property is located within an HOA, the owner should carefully review the bylaws and deed restrictions for any rules or restrictions related to short-term rentals. Some HOAs may prohibit or limit STRs.

City Regulations: If the property is located within the extraterritorial jurisdiction (ETJ) of a city, such as Austin, the owner should check with the city to determine if any STR regulations or licensing requirements apply.

General Safety Requirements: While not specific to STRs, all rental properties in Travis County must comply with general health and safety standards, such as having working smoke detectors, fire extinguishers, and proper egress.

It's important to note that STR regulations can change over time, so owners should stay informed about any updates or changes to local laws. Additionally, even though there may not be specific county-level requirements, STR owners are still responsible for ensuring their property is safe, well-maintained, and operated in a manner that does not create nuisances for neighbors.

For the most up-to-date information on STR requirements in Travis County, owners should consult with the county's Development Services Department or a local attorney specializing in real estate law.

Travis County Short-Term Rental Taxes

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

State Hotel Occupancy Tax

The State of Texas imposes a 6% hotel occupancy tax on all short-term rentals, including those in Travis County. This tax applies to any rental lasting less than 30 consecutive days. As of May 1, 2017, Airbnb began collecting and remitting this tax on behalf of its hosts in Texas. For other booking platforms or direct bookings, owners are responsible for collecting and remitting this tax to the Texas Comptroller's Office.

City of Austin Hotel Occupancy Tax

In addition to the state tax, short-term rentals within the Austin city limits are subject to a 9% occupancy tax and an additional 2% venue project tax, for a total of 11%. This brings the combined state and local tax rate for Austin STRs to 17%. Owners must register with the City of Austin Controller's Office to obtain an account number for reporting and paying these taxes on a quarterly basis.

Deductions and Write-Offs

Short-term rental owners in Travis County may be eligible for various tax deductions to help offset their tax liability. Some common deductions include:

1. Depreciation of the rental property over 27.5 years
2. Property taxes paid on the rental
3. Maintenance and repair expenses
4. Renovation and improvement costs
5. Mortgage interest
6. Insurance premiums
7. Cleaning expenses
8. Marketing and advertising costs
9. Property management software fees
10. Booking platform fees (e.g., Airbnb)
11. Home office expenses (if applicable)
12. Travel expenses related to managing the property
13. Property management and legal fees

To claim these deductions, owners must keep accurate records and calculate the proportion of business use relative to total rental days. Consulting with a tax professional can help ensure compliance and maximize deductions.

It's important to note that while Airbnb and some other platforms may collect and remit taxes on behalf of hosts, owners are still responsible for reporting all rental income and ensuring they are in compliance with local regulations, such as obtaining the necessary permits and licenses. Failure to comply with tax and licensing requirements can result in fines and penalties.

By understanding the applicable taxes and potential deductions, short-term rental owners in Travis County can better manage their finances and operate a successful, compliant business.

Texas Wide Short-Term Rental Rules

While the State of Texas generally allows cities and counties to regulate short-term rentals (STRs) as they see fit, there are a few state-wide rules and regulations that affect Travis County hosts.

Hotel Occupancy Tax

The most significant state-wide requirement for STR hosts in Texas is the collection and remittance of the state hotel occupancy tax. Texas imposes a 6% tax on the rental of rooms or spaces in a hotel or similar establishment, including STRs, for periods of less than 30 consecutive days. This tax is in addition to any local hotel occupancy taxes imposed by cities or counties.

STR hosts in Travis County must register with the Texas Comptroller's Office to obtain a tax permit and remit the collected state hotel occupancy taxes on a quarterly basis. Failure to comply with these tax requirements can result in penalties and interest.

Recent Legislative Developments

In recent years, there have been efforts at the state level to limit the ability of cities to regulate STRs. In 2017, Texas Senate Bill 451 was introduced to preempt local regulations and prevent cities from banning or restricting STRs. However, this bill did not pass.

More recently, in 2023, House Bill 2665 was proposed to prevent cities from banning STRs in single-family neighborhoods. After debate, the bill was revised to instead call for a state-wide study on potential STR legislation, with results due back to the legislature in December 2024. Critics argue that the state already has enough information on STRs and that a study would only delay decisions on this issue that impacts cities across Texas.

Interaction with Local Regulations

Despite these state-level developments, the regulation of STRs in Texas still primarily occurs at the local level. Cities and counties are able to adopt their own ordinances governing registration, permitting, zoning, and operational requirements for STRs.

In Travis County, STR hosts must be aware of and comply with the specific rules of their jurisdiction, such as the City of Austin's licensing requirements and occupancy limits. Unincorporated areas of the county currently do not have STR-specific regulations, but properties must still adhere to any applicable deed restrictions or HOA rules.

As the STR market continues to grow in Texas, hosts should stay informed about any changes to state law that could impact their ability to operate. However, for now, the most critical compliance points for Travis County STR operators remain the state hotel occupancy tax and the local regulations of their specific city or town.

Does Travis County Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and BiggerPockets, it appears that Travis County does not strictly enforce short-term rental regulations, especially compared to the City of Austin. Many hosts continue to operate STRs in unincorporated areas of the county without obtaining licenses or paying hotel occupancy taxes.

As one Reddit user noted, "In unincorporated areas of Travis County, there are currently no specific regulations on short-term rentals. However, property owners should still check for any applicable HOA rules or deed restrictions." This lack of county-level oversight has led to a proliferation of unlicensed STRs outside Austin city limits.

Even within Austin, enforcement of the city's STR ordinance has been inconsistent. A 2022 analysis found that out of approximately 11,000 short-term rentals in Austin, only 1,875 were properly licensed. The city has struggled to crack down on illegal operators due to limited resources and the difficulty of proving violations.

Compared to some other major cities, Travis County and Austin are relatively Airbnb-friendly, despite the regulations on the books. One Quora user opined, "Officially, no, from the City's perspective. Unofficially, you betcha'. A lot of AirBnB properties sprinkled throughout the city. If no one complains to the city, then the city doesn't do anything about it."

This sentiment is echoed on the BiggerPockets forums, where investors discuss the potential for short-term rentals in the Austin area with little concern for licensing requirements. As one poster put it, "They'll try, but they have no bite behind it."

In conclusion, while Travis County and the City of Austin have STR regulations in place, enforcement is lax and inconsistent. Many hosts continue to operate illegally with few consequences, making the area relatively hospitable to Airbnb and other short-term rental platforms compared to stricter markets. However, the regulatory landscape is always shifting, so investors should stay informed of any changes that could impact their ability to run STRs in the future.

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

Starting a short-term rental (STR) business in Travis County can be a lucrative venture, but it's crucial to understand and comply with local regulations. Follow these steps to successfully launch your STR business:

Research local regulations: Familiarize yourself with the STR rules and regulations in your specific area of Travis County. While unincorporated areas currently have no county-level STR regulations, properties within city limits or extraterritorial jurisdictions (ETJs) may be subject to additional requirements. Check with your local municipality for specific ordinances, zoning restrictions, and permitting processes.

Obtain necessary licenses and permits: If your property is located within the Austin city limits, you'll need to apply for a short-term rental license. Gather required documents, such as proof of property insurance, a driver's license copy, and a certificate of occupancy. Submit your application online or by mail to the Austin Code Department, along with the applicable fees. For properties outside Austin, check with your local city for any licensing requirements.

Prepare your property: Ensure your rental property is safe, clean, and well-maintained. Install smoke detectors, fire extinguishers, and carbon monoxide detectors as required by law. Provide essential amenities and furnishings to create a comfortable and inviting space for guests. Consider hiring a professional photographer to capture high-quality images of your property for online listings.

Set up your business: Choose a business structure (e.g., sole proprietorship, LLC) and register your business with the state. Obtain a federal Employer Identification Number (EIN) for tax purposes. Open a separate bank account for your STR business to keep finances organized. Consider working with a local accountant or tax professional to ensure compliance with tax obligations, such as occupancy taxes.

Create a listing: Select a vacation rental platform, such as Airbnb or VRBO, to list your property. Craft a compelling listing description that highlights your property's unique features, amenities, and location. Use high-quality photos and include important details, such as house rules, check-in/out procedures, and cancellation policies. Set competitive rates based on your property's size, amenities, and local market demand.

Manage your property: Establish a system for managing bookings, guest communication, and property maintenance. Consider using vacation rental software to streamline operations and automate tasks like booking confirmations and cleaning schedules. Develop a network of reliable service providers, such as cleaners and maintenance professionals, to ensure your property is well-maintained between guest stays.

Promote your listing: Utilize social media and other online marketing channels to promote your STR. Encourage satisfied guests to leave positive reviews on your listing, as this can help attract future bookings. Consider offering special promotions or discounts during slower periods to maintain a steady occupancy rate.

Stay informed and adaptable: Keep up with any changes in local STR regulations and adapt your business practices accordingly. Regularly review and adjust your pricing strategy based on market demand and seasonality. Continuously improve your property and guest experience based on feedback and industry trends.

By following these steps and staying compliant with local regulations, you can build a successful short-term rental business in Travis County. Remember to prioritize guest satisfaction, maintain open communication with neighbors, and stay proactive in managing your property to ensure long-term success.

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

For questions about short-term rental regulations and zoning in unincorporated areas of Travis County, property owners should contact the Travis County Transportation and Natural Resources (TNR) department:

Travis County TNR
700 Lavaca Street, 5th Floor
P.O. Box 1748
Austin, Texas 78701
Phone: (512) 854-4215
Email: Travis_County.Permits@traviscountytx.gov

The TNR department oversees development services, including permits and regulations for properties outside city limits. Their office hours are Tuesday and Thursday from 10:00 AM to 3:00 PM.

For properties located within a specific city's jurisdiction, owners should contact that city directly:

1. Austin - Austin Code Department, (512) 974-2633, https://www.austintexas.gov/dsd
2. Lakeway - Building & Development Services, (512) 314-7540, https://www.lakeway-tx.gov/117/Building-Development-Services
3. Rollingwood - Rollingwood City Hall, (512) 327-1838
4. West Lake Hills - Building & Development Department, (512) 327-3628, https://westlakehills.gov/101/Building-Development

STR owners may also find it helpful to connect with other local hosts and property managers through online forums and meetup groups. Some active communities include:

1. Austin Airbnb Hosts Facebook Group: https://www.facebook.com/groups/AustinAirbnbHosts/
2. Austin Short Term Rental Alliance: https://www.austinstra.org/
3. Austin Rental Alliance: https://austinrentalalliance.com/
4. BiggerPockets Austin Real Estate Meetup: https://www.biggerpockets.com/events/austin-real-estate-meetup

By engaging with these communities, hosts can share experiences, ask for advice, and stay up-to-date on any regulatory changes that may impact their short-term rental business in Travis County.

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

Based on discussions in online forums like Reddit and BiggerPockets, Airbnb hosts in Travis County have mixed feelings about local short-term rental regulations. Many express frustration with the city of Austin's strict licensing requirements and enforcement efforts, while others acknowledge the need for some level of oversight.

On Reddit, several hosts have shared their experiences navigating Austin's STR regulations:

One user described the licensing process as "costly and labor intensive," requiring a $500 fee, property inspection, and neighbor notifications. They felt it was a "slap in the face" when unlicensed operators were able to skirt the rules.

Another host mentioned they used to rent out their downtown Austin condo during SXSW after going through the proper licensing channels. However, they worry about the impact of unlicensed STRs operated by large companies that have moved into the area.

Some hosts have expressed concerns about the city's enforcement efforts, with one noting that "the fine for operating an STR without a license is, at maximum, $1000," which may not be enough to deter illegal operators.

On BiggerPockets, a popular real estate investing forum, the topic of STR regulations in Texas cities like Austin and Fort Worth has also come up:

In a 2022 post titled "Should I start an STR in a City that Might Ban Them?", an investor considering the Fort Worth market wondered if uncertainty around future regulations should deter them or if it presented an opportunity to get in before restrictions tightened.

Another thread from 2023 discussed the Dallas/Fort Worth area STR ban, with hosts questioning whether the rules were actually being enforced given the still-high number of listings.

A host who operates an STR in Colorado Springs shared their experience with evolving regulations, from an initially friendly environment to increasing restrictions. They noted the Texas State Appeals Court had struck down some of Austin's STR rules, speculating that more owners may turn to legal challenges if they feel cities are overreaching.

Overall, the sentiment among Airbnb hosts in Travis County seems to be one of uncertainty and concern about the regulatory landscape. While some appreciate the need for reasonable oversight, many feel the current system is overly burdensome on responsible operators while allowing illegal STRs to flourish. As the market and legal challenges evolve, hosts will likely continue to navigate a complex set of local rules.

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.