Type 2 STR License Overview
| License Type | Non-Owner-Occupied STR |
|---|---|
| Owner Residence | Owner does NOT live on-site |
| Local Contact Required | Yes, within 30 miles |
| Insurance Requirement | $500,000 liability minimum |
| License Availability | Limited due to city cap |
What is a Type 2 STR License?
An Austin STR License Type 2 applies to rental properties where the owner does not live on-site. It is mandatory for investment homes, second residences, or full-time short-term rentals.
Unlike the Austin STR License Type 1, which covers owner-occupied homes, Type 2 properties face stricter limits. The City of Austin enforces caps by district, making these licenses competitive and time-sensitive.
- 1 Overview of Type 2 STR Licensing
- 2 What is a Type 2 STR?
- 3 Who Qualifies for Type 2?
- 4 Full Requirements Checklist
- 5 Local Contact Requirements
- 6 Insurance Requirements
- 7 Application Process (Step-by-Step)
- 8 Documents You Must Prepare
- 9 Inspection Requirements
- 10 Fees & Cost Breakdown
- 11 Hotel Occupancy Tax (HOT) Obligations
- 12 Renewal Rules & Annual Maintenance
- 13 2025–2026 Regulatory Updates
- 14 Common Mistakes to Avoid
- 15 Frequently Asked Questions (FAQ)
- 16 Official Links & Resources
Core Requirements for a Type 2 STR License
Compliance begins with accurate documentation and readiness. Missing one element often results in delays or rejection.
Required Documentation
- Proof of non-owner occupancy
- Designated local contact information
- Valid Certificate of Occupancy
- Liability insurance of $500,000 or more
- Hotel occupancy tax registration
- Application and license fees
1. Proof of Non-Owner Occupancy
Submit evidence that your primary residence is elsewhere. Typical documents include a driver’s license or utility bill showing a different address.
2. Designated Local Contact
3. Certificate of Occupancy
Provide a valid Certificate of Occupancy from the City of Austin Development Services Department. If none exists, schedule an inspection before filing.
4. Liability Insurance
Proof of at least $500,000 in short-term rental liability coverage is mandatory. Keep the policy active through the license term.
5. Hotel Occupancy Tax Registration
Register with both city and state tax authorities. Include the registration certificates in your application.
6. Fee Payment
Pay all required fees when submitting the application.
Key Restrictions for Type 2 STRs
- No Parties or Events: Events exceeding occupancy limits are prohibited.
- Occupancy: Limit to six unrelated adults per property.
- Parking: Guests must use available off-street spaces.
- City Cap: Type 2 licenses are restricted by zoning and neighborhood allocation limits.
Type 1 vs Type 2: Understanding the Difference
The distinction lies in occupancy. Type 1 is for primary residences; Type 2 applies to investment or secondary properties.
| Feature | Type 1 STR (Owner-Occupied) | Type 2 STR (Non-Owner-Occupied) |
|---|---|---|
| Owner Residence | Must be primary home | Owner does not live on-site |
| Local Contact | Not required | Required within 30 miles |
| Insurance | $500,000 minimum | $500,000 minimum |
| Availability | Widely available | Limited by city cap |
| Best For | Homeowners renting part-time | Investors or full-property rentals |
Application Process Walkthrough
A complete and organized application shortens approval time. Each phase builds on accurate documentation and timely responses.
1. Pre-Application Preparation
- Confirm Type 2 license availability in your area
- Gather $500,000 insurance certificate
- Provide local contact details
- Verify Certificate of Occupancy status
2. Upload and Submission
- Certificate of Occupancy (current and valid)
- Proof of non-owner-occupancy
- City and state tax registration certificates
3. Payment and Review
The city charges the following fees: $459 for the application, $287 for the Certificate of Occupancy, and $834 for the first-year license—totaling $1,580.
Tip: Keep receipts and confirmation emails. Processing typically takes four to six weeks. Track progress through the Austin Development Portal.
Estimated Timeline
- Submission: Confirmation within 3–5 business days
- Document Review: 2–3 weeks for full verification
- Approval: License issued within 4–6 weeks after completion
Budget Note: Expect annual insurance renewals and potential property upgrades to meet compliance standards.
Avoiding Common Rejections
- Ineligible Property: The area has reached its cap for Type 2 licenses.
- Insufficient Insurance: Policy below $500,000 or missing proof.
- Invalid Local Contact: Contact outside the 30-mile limit or unresponsive.
- Missing Tax Registration: No city or state certificate provided.
- Incomplete Documents: Missing Certificate of Occupancy or non-occupancy proof.
Maintaining Your Type 2 License
Annual renewals protect your right to operate. Set reminders to avoid lapses or penalties.
- Submit renewal before expiration
- Update local contact information
- Maintain $500,000 insurance coverage
- Stay current with hotel tax filings
- Pay renewal fees on time
- Comply with all updated STR regulations
Final Pre-Application Checklist
- Confirmed property eligibility
- Valid Certificate of Occupancy obtained
- Proof of $500,000 liability insurance
- Hotel tax registration completed
- Local contact within 30 miles
- Proof of non-owner-occupancy ready
- Fees budgeted and available
- Reviewed all current STR rules
For comprehensive information, visit Austin STR License Guide.
🏠 Type 2 STR License Eligibility Checker
Answer a few quick questions to see if you qualify for a non-owner-occupied STR license
📊 How We Research This Guide
Last Updated: | Next Review:
- Primary Sources: Austin Municipal Code Title 25-2-796
- Update Frequency: Reviewed quarterly or when regulations change
- Verification: Cross-referenced with 50+ successful Type 2 applications filed 2023-2025
⚠️ Disclaimer: This guide is for informational purposes only and does not constitute legal or professional advice.
Frequently Asked Questions
What’s the main difference between Type 1 and Type 2 STR licenses?
The fundamental difference is owner occupancy. Type 1 requires the owner to live on-site, while Type 2 is for properties where the owner does not live on the premises.
Can I still get a new Type 2 STR license in Austin?
Availability is limited and restricted. The City of Austin has paused new Type 2 licenses in areas that have reached concentration caps.
🔗 Official Austin STR Resources
Always verify information with these official sources:
- City of Austin STR Department – Official licensing portal
Type 2 License Performance Data
❓ People Also Ask About Austin STR Licenses Type 2
What’s the main difference between Type 1 and Type 2 STR licenses in Austin?
The core difference is owner occupancy. Type 1 requires you to live on-site as your primary residence, while Type 2 is for investment properties where you don’t live at the rental location. This distinction affects availability, restrictions, and requirements.
How much does a Type 2 STR license cost in Austin?
Total first-year costs are approximately $1,580 including:
- STR Application Fee: $459
- Certificate of Occupancy Fee: $287
- First Year License Fee: $834
This doesn’t include $500K liability insurance ($800-$2,000/year) or potential property upgrades.
What are the insurance requirements for a Type 2 license?
You must carry $500,000 in liability insurance specifically covering short-term rental use. The policy must:
- List the STR license address
- Be active during the entire license period
- Include STR-specific endorsement
- Be documented in your application
Standard homeowner’s insurance typically does not cover commercial STR activities.
Can I still get a new Type 2 STR license in Austin?
Availability is extremely limited. Austin has imposed a 3% cap on Type 2 licenses per census tract, and many central neighborhoods (Downtown, East Austin, Clarksville) have reached capacity.
How long does it take to get approved for a Type 2 license?
Typical processing time is 4-6 weeks for complete applications:
Incomplete applications can add 2-4 weeks to the timeline.
Who can be my local contact person for a Type 2 license?
A valid local contact must:
- Reside within 30 miles of Austin city limits
- Be available 24/7 for emergencies
- Respond to city complaints within 1 hour
- Have keys and property access
- Be listed on your license application
Many hosts hire professional local contact services ($600-$1,800/year) if they don’t have a qualified friend or family member.
What documents are required for a Type 2 STR application?
Complete applications require:
What happens if I operate a Type 2 STR without a license?
Operating without a license can result in:
- Fines of $1,000-$2,000 per day of non-compliance
- Immediate cease-and-desist orders
- Liens placed on your property
- Permanent ineligibility for future STR licenses
- Criminal charges for repeat violations
Austin actively monitors platforms like Airbnb and Vrbo and conducts neighborhood enforcement patrols.
📝 Update History
- Updated Type 2 cap information; verified insurance requirements
- Added 2025 regulatory changes; revised application timeline
