Complete guide to Austin STR licensing featuring a checklist and the Austin skyline.

Complete Guide to Austin Short-Term Rental Licensing

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Last updated: November 2025 | Next review: February 2026

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Austin STR License Guide
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🎯 Quick Start Summary

Need to get licensed fast? Here’s what you need to know:

Austin STR License Quick Reference Guide

Essential Austin Short-Term Rental License Requirements
Timeline 8-12 weeks from application to approval
First Year Cost $1,340-$1,950 (includes license, insurance, equipment)
License Types Type 1 (Owner-occupied), Type 2 (Investment), Type 3 (B&B)
Key Requirement $300k+ liability insurance specific to STR operations
2025 Change Type 2 limited by 12.5% density cap per census tract
⚠️ Critical: Can’t operate legally without a license. Penalties reach $2,000/day for advertising unlicensed rentals.
👉 Start here: Verify your property is eligible before spending time or money on the application.

📋 Understanding Austin’s STR License Types

Austin requires one of three license types depending on how you’ll operate your rental.

Type 1: Owner-Occupied (Easiest Path) 🏡

Best for: Homeowners renting spare rooms or renting their home while traveling

Requirements:

  • Property is your primary residence with Travis County homestead exemption
  • You maintain occupancy while renting (or rent entire place temporarily)
  • No geographic restrictions or density limits

Key advantages:

  • Simpler approval process
  • No density caps to worry about
  • Generally faster approval
  • Lower perceived risk
✅ Verify eligibility: Check Travis County tax records for active homestead exemption

Type 2: Non-Owner-Occupied (Investors) 🏢

Best for: Investment properties, second homes, landlords

Requirements:

  • Owner doesn’t live at the property
  • Subject to 12.5% density cap per census tract (Oct 2025 rule)
  • Must maintain 1,000-foot spacing from other Type 2 properties
  • More complex approval process

Critical October 2025 changes:

  • Many popular areas approaching capacity (Downtown, East Austin, South Congress)
  • Check official density map BEFORE purchasing investment property
  • Some neighborhoods effectively closed to new Type 2 licenses
⚠️ Important: Verify capacity available in your census tract before applying. No refunds if your area is at capacity.

Check current Type 2 capacity map →

Type 3: Bed & Breakfast 🍳

Traditional B&B operations with commercial property requirements. Most Airbnb/VRBO hosts need Type 1 or Type 2, not Type 3.

Which License Do You Need?

Your Situation License Type Difficulty
Your primary home, you live there Type 1 ⭐⭐ Moderate
Investment property, you don’t live there Type 2 ⭐⭐⭐ Challenging
Traditional B&B with breakfast service Type 3 ⭐⭐⭐⭐ Very Complex
Still unsure? Contact City of Austin Development Services: (512) 978-4000 or STR@austintexas.gov

📝 Step-by-Step Application Process

Phase 1: Pre-Application (Week 1-2) 🔍

Before spending $860-900 on application fee, verify:

✅ Zoning compliance

✅ HOA restrictions

  • Review your CC&Rs for STR prohibitions
  • Get written board approval if required
  • Many applications rejected due to missed HOA restrictions

✅ Census tract capacity (Type 2 only)

  • Check official density map
  • Verify under 12.5% capacity threshold
  • Confirm 1,000-foot spacing from other Type 2s

✅ Homestead verification (Type 1 only)

Phase 2: Document Gathering (Week 2-3) 📄

Required documents for all applications:

📄 Certificate of Occupancy

  • Shows property meets building/safety codes
  • Request from Development Services Department
  • Cost: $0-50 | Processing: 5-10 business days

📄 Liability Insurance Certificate

  • Minimum $300,000 coverage specifically for STR operations
  • Standard homeowners insurance doesn’t qualify
  • Must name “City of Austin” as certificate holder
  • Annual cost: $300-800
Recommended STR insurance providers:
  • Proper Insurance (STR-specific)
  • CBIZ (commercial policies)
  • Travelers (homeowner endorsements)

📄 Floor Plan

  • Show all rooms with dimensions
  • Mark smoke detectors, CO detectors, fire extinguisher
  • Indicate all exits (doors/windows)
  • Hand-drawn acceptable if clear
💡 Pro tip: Use free tools like Floorplanner.com or RoomSketcher

📄 Government ID

  • Driver’s license or passport
  • Must match property deed name

📄 HOA Approval Letter (if applicable)

  • Official letterhead required
  • Board signature
  • Must explicitly approve short-term rentals
  • Dated within 6 months

Phase 3: Safety Equipment Installation (Week 3-4) 🔴

Before inspection, install required equipment:

🔴 Smoke Detectors

  • Every bedroom (required)
  • Hallways adjacent to bedrooms (required)
  • Every floor level (required)
  • Interconnected when possible
  • Test functionality before inspection

Cost: $100-200 for typical home

🔴 Carbon Monoxide Detectors

  • Every floor with sleeping areas (required if gas appliances)
  • Within 15 feet of bedroom doors
  • Test before inspection

Cost: $50-100

🔴 Fire Extinguisher

  • 2A:10B:C rated (minimum)
  • Easily accessible location
  • Check pressure gauge shows “charged”
  • Not expired

Cost: $30-50

🔴 Occupancy Limit Sign

  • Calculate: (2 per bedroom) + 2 additional
  • Example: 3-bedroom = (3 × 2) + 2 = 8 people maximum
  • Post prominently inside property

Cost: $10-20

⚠️ Common inspection failures:
  • Missing bedroom smoke detectors (most common)
  • Expired or non-functional detectors
  • No CO detectors near bedrooms
  • Fire extinguisher missing or expired
  • Occupancy limit not posted

Phase 4: Online Application Submission (Week 4) 💻

Access the application portal:

  1. Visit AustinTexas.gov/STR
  2. Create account or login
  3. Select “Apply for STR License”

Application sections:

Property Information

  • Complete address and legal description
  • Property type and bedroom/bathroom count
  • Parcel number from Travis County records

Owner Information

  • Legal name matching property deed
  • Contact information
  • Emergency contact
  • Property manager (if applicable)

License Type Selection

  • Type 1 or Type 2
  • Explain how you qualify

Document Upload

  • All files under 10MB each
  • PDF format preferred
  • Ensure documents are current and legible

Application Fee

  • Type 1: $860 (non-refundable)
  • Type 2: $900 (non-refundable)
  • Credit/debit card payment
⚠️ Fee non-refundable even if denied – Verify eligibility first!

Phase 5: City Review & Inspection (Week 5-12) 🔎

Initial Document Review: 2-4 weeks

  • City staff verify all documents
  • Common requests: updated insurance, clearer floor plan, HOA documentation
  • Must respond within 30 days or application denied

Property Inspection: Week 6-10

  • 5-7 days advance notice
  • Inspector visits property (30-60 minutes)
  • Checks safety equipment and compliance

What inspectors verify:

  • Smoke/CO detector functionality
  • Fire extinguisher accessibility
  • Occupancy limit posting
  • Exit accessibility
  • Property matches floor plan

Inspection outcomes:

  • Pass: License issued in 1-2 weeks
  • Conditional pass: Minor corrections needed, submit photos
  • Fail: Re-inspection required after corrections
⏱️ Total timeline: 8-12 weeks typical (up to 16+ weeks if complications)

Phase 6: License Approval & Operations ✅

Once approved:

✅ Display license number in ALL online listings

  • Format: “Austin STR License #[number]”
  • Required on Airbnb, VRBO, and all platforms
  • Platforms verify with city database

✅ Register with platforms

  • Submit license number to Airbnb
  • Submit license number to VRBO
  • Cannot list without verified license

✅ Activate operations

  • Ensure insurance policy active
  • Post safety information for guests
  • Maintain compliance with all regulations

💰 Complete Cost Breakdown

First Year Investment

Expense Type 1 Type 2 Notes
License fee $860 $900 Non-refundable
Insurance $300-500 $500-800 Annual STR liability
Safety equipment $180-350 $180-350 Detectors, extinguisher
Certificate of Occupancy $0-50 $0-50 Varies by property
Floor plan $0-200 $0-200 DIY or professional
HOA fees $0-200 $0-200 If applicable
TOTAL STARTUP $1,340-$2,160 $1,630-$2,500

Annual Ongoing Costs

  • License renewal: $860-900/year
  • Insurance renewal: $300-800/year
  • Hotel Occupancy Tax: 17% of gross revenue
  • Safety equipment maintenance: $100-200/year

Hidden Costs

Time investment:

  • Application preparation: 20-30 hours
  • Annual renewal: 5-10 hours
  • Quarterly tax reporting: 8 hours/year

Potential property improvements:

  • Hardwired detectors: $500-1,500
  • Electrical upgrades: $500-2,000
  • Exit improvements: $200-1,000

Break-Even Example 📊

3-bedroom Austin home:

  • Nightly rate: $150
  • Occupancy: 60% (18 nights/month)
  • Annual revenue: $32,400

Minus costs:

  • License + insurance: $1,400
  • HOT tax (17%): $5,508
  • Platform fees (15%): $4,860
  • Maintenance: $500
  • Total costs: $12,268

Net profit: $20,132

✅ Worth it if annual revenue exceeds $15,000

🔄 October 2025 Regulatory Changes

What Changed (Effective Oct 1, 2025)

1. Type 2 Density Caps (Major Impact) 🚨

New rule: Maximum 12.5% of residential units per census tract can be Type 2 STRs

Impact:

  • Popular areas approaching/at capacity
  • Downtown, East Austin, South Congress heavily affected
  • Check capacity BEFORE purchasing investment property
  • Type 1 properties unaffected
Grandfathering: Existing Type 2 licenses (before Oct 2025) exempt from density caps

2. 1,000-Foot Spacing Requirement 📏

New rule: Type 2 properties must be 1,000+ feet from other Type 2 licensed STRs

Impact:

  • Creates “dead zones” around existing Type 2s
  • Some properties now ineligible
  • Only affects NEW applications after Oct 2025
  • Check official spacing map

3. Enhanced Platform Compliance 🖥️

New enforcement:

  • Airbnb, VRBO must verify Austin STR licenses
  • Platforms face fines for listing unlicensed properties
  • Automated license verification
  • Unlicensed listings automatically removed
Impact: Cannot operate without valid license (platforms enforce this now)

4. Stricter Penalties ⚖️

  • $2,000/day fine for advertising unlicensed STR
  • Increased code enforcement staff
  • Faster legal action
  • Criminal charges for repeat offenders

Who’s Affected

Type 1 hosts: ✅ Minimal impact (most rules don’t apply)
Type 2 investors: ⚠️ Significantly harder to obtain new licenses
Unlicensed operators: 🚨 Must get licensed immediately or cease operations

Strategic Implications

If starting a new STR:

  • Type 1 path still accessible
  • Type 2 requires capacity check FIRST
  • Consider purchasing existing licensed Type 2 property

If you have existing license:

  • Your license is valuable (grandfathered)
  • Don’t let it lapse (hard to re-obtain)
  • License doesn’t transfer with property sale

❌ Common Application Mistakes to Avoid

❌ Mistake 1: Incomplete Floor Plans

Problem: Missing safety equipment locations, exits, or dimensions

Solution:

  • Mark ALL smoke detector locations
  • Show CO detector placements
  • Label all exits clearly
  • Include room dimensions
  • Use legend to explain symbols

❌ Mistake 2: Wrong Insurance Type

Problem: Submitting homeowners insurance instead of STR liability coverage

Solution:

  • Get specific STR liability policy
  • Minimum $300,000 coverage
  • Certificate holder: “City of Austin”
  • Verify coverage before applying
Don’t submit: Standard homeowners policy (will be rejected)

❌ Mistake 3: Missing HOA Approval

Problem: Applying without checking HOA restrictions or getting formal approval

Solution:

  • Review CC&Rs BEFORE applying
  • Request formal board approval on letterhead
  • Get signature from authorized officer
  • Verify approval mentions “short-term rental” specifically
⚠️ Many HOAs prohibit STRs – verify first to avoid wasted application fee

❌ Mistake 4: Incorrect Occupancy Calculation

Problem: Inflating occupancy numbers or miscalculating allowed guests

Formula (strictly enforced):

Maximum Occupancy = (2 per bedroom) + 2

Examples:

  • 2-bedroom: (2 × 2) + 2 = 6 people max
  • 3-bedroom: (3 × 2) + 2 = 8 people max
  • 4-bedroom: (4 × 2) + 2 = 10 people max

Post this number prominently inside property

❌ Mistake 5: Safety Violations

Most common inspection failures:

  • Missing bedroom smoke detectors
  • Dead batteries or expired detectors
  • No CO detectors near bedrooms
  • Fire extinguisher missing/expired
  • Occupancy limit not posted
Prevent failures: Self-inspect before scheduling city inspection

❌ Mistake 6: Wrong License Type

Problem: Claiming Type 1 (owner-occupied) when property doesn’t qualify

⚠️ Serious violation: City cross-references homestead records. False claims = permanent denial + possible criminal charges

Only claim Type 1 if:

  • Property is your legal primary residence
  • Active Travis County homestead exemption
  • You actually live there

When uncertain: Apply for Type 2 (being honest protects you)

❌ Mistake 7: Poor Timing

Too late: Already advertised property or accepted bookings (illegal)

Too early: Applied before documents/property ready (causes delays)

Optimal timing:

  • Start 3-4 months before intended launch
  • Have ALL documents ready before submitting
  • Don’t advertise until license approved
  • Budget 8-12 weeks for processing

💵 Hotel Occupancy Tax (HOT) Requirements

Understanding the 17% Tax

All Austin STRs pay 17% Hotel Occupancy Tax on gross rental revenue:

  • City of Austin: 11%
  • State of Texas: 6%
  • Total: 17%

Simplified Collection (As of April 2025)

Good news: Platforms now collect HOT automatically

Platforms collecting HOT:

  • Airbnb (automatic)
  • VRBO/HomeAway (automatic)
  • Booking.com (automatic)

What this means:

  • Guests pay 17% at booking
  • Platform collects from guest
  • Platform remits to city and state
  • You don’t manually collect or remit

Your Ongoing Responsibilities

Even with automatic collection, you must:

  1. Register for HOT permit with City of Austin
    • Visit: AustinTexas.gov/HOT
    • No registration fee
    • Provide STR license number
  2. Register with Texas Comptroller
    • Visit: Comptroller.Texas.gov
    • Select “Short-term rental”
    • Receive Texas taxpayer number
  3. File quarterly reports (even if zero activity)
    • Due: Jan 20, Apr 20, Jul 20, Oct 20
    • Report through city and state portals
    • Acknowledge platform collected taxes
  4. Collect HOT on direct bookings (outside platforms)
    • 17% on any bookings not through Airbnb/VRBO
    • Remit quarterly
    • Keep detailed records

Penalties for Non-Compliance

City of Austin:

  • Late filing: 5% penalty + 1% interest/month
  • Non-payment: 5-15% penalty + interest

State of Texas:

  • Late filing/payment: 5-10% penalty
  • Interest: 1-1.5% per month

Additional consequences:

  • License suspension or revocation
  • Cannot renew with outstanding HOT debt
  • Property liens for unpaid taxes

Best Practices

  • Download monthly platform statements showing HOT collected
  • Set quarterly filing reminders (Jan 20, Apr 20, Jul 20, Oct 20)
  • Use accounting software (QuickBooks, Stessa) for tracking
  • Keep all records for minimum 4 years
  • File even if zero bookings that quarter
Resources:

🔄 License Renewal & Maintenance

Annual Renewal Requirements

Timeline:

  • License valid 12 months from issue date
  • Renewal opens 60 days before expiration
  • No grace period – expired = unlicensed operation

Renewal process:

  1. City emails reminder 60 days before expiration
  2. Login to Austin STR portal 30-45 days before
  3. Update any changed information
  4. Upload current documents (insurance, floor plan if changed)
  5. Pay renewal fee ($860 Type 1, $900 Type 2)
⚠️ Set calendar reminder – Don’t miss expiration date!

Ongoing Compliance

Maintain throughout the year:

✅ Active insurance policy

  • Keep coverage current and up to date
  • Update certificate if policy changes
  • Notify city of any coverage changes

✅ Functional safety equipment

  • Test smoke/CO detectors monthly
  • Replace batteries as needed
  • Replace expired detectors (10-year lifespan)
  • Check fire extinguisher pressure

✅ Occupancy limits

  • Never exceed posted maximum
  • Decline oversized bookings
  • Monitor guest counts

✅ Quarterly HOT reporting

  • File by deadlines (Jan 20, Apr 20, Jul 20, Oct 20)
  • Report even with zero activity
  • Keep detailed booking records

✅ Respond to complaints within 24 hours

  • City forwards neighbor complaints
  • Prompt response required
  • Address issues immediately

Reasons for License Suspension/Revocation

Your license can be revoked for:

  • Operating with lapsed insurance
  • Exceeding occupancy limits repeatedly
  • Failure to pay HOT taxes
  • Multiple code violations
  • Nuisance complaints (noise, parking, disturbances)
  • False information on application

Avoid revocation: Maintain strict compliance

❓ Frequently Asked Questions

General Licensing

Q: How long does the application take?

A: The typical timeline is 8-12 weeks, but you should budget 3-4 months from start to finish to ensure you’re operating legally.

Q: What if I’m denied?

A: Application fee is non-refundable. You can appeal within 30 days or correct issues and reapply.

Q: Can I operate while waiting for approval?

A: No. Operating or advertising before license approval = $2,000/day fines.

Q: Do I need a business license?

A: STR license serves as your operating license. No separate business license required for small operators.

Type 1 vs Type 2

Q: Can I convert Type 2 to Type 1 later?

A: Yes, if you move in and establish it as your homesteaded primary residence. Must update license.

Q: What if I have multiple properties?

A: Only one can have homestead exemption (Type 1). Others require Type 2 licenses.

Q: Can I rent out my garage apartment?

A: Yes, if it’s part of your homesteaded property, it qualifies for Type 1.

Insurance

Q: Will my homeowners insurance cover STR activity?

A: No, standard homeowners policies exclude commercial activity, so you’ll need to get specific STR liability coverage instead.

Q: What happens if my insurance lapses?

A: License automatically suspended. Cannot operate until insurance reinstated.

Q: Can I get insurance after approval?

A: No. Must have active policy before applying.

Safety & Inspections

Q: Do I need a fire sprinkler system?

A: Not for most single-family homes. Required for larger properties (check with fire marshal).

Q: Can I use battery-only smoke detectors?

A: Yes, if they’re functioning and current. Hardwired preferred but not required for most homes.

Q: What if I fail inspection?

A: Correct deficiencies and request re-inspection. May take 2-3 additional weeks.

Taxes

Q: Is HOT tax in addition to income tax?

A: Yes. HOT (17%) is collected from guests. You still pay income tax on STR profits.

Q: Can platforms mess up HOT collection?

A: Rarely, but contact platform immediately if you notice discrepancies.

Q: What if I book directly (not through platforms)?

A: You must collect 17% HOT from guest and remit quarterly.

October 2025 Changes

Q: Are existing Type 2 licenses affected by density caps?

A: No. Licenses issued before Oct 1, 2025 are grandfathered.

Q: Can I transfer my grandfathered Type 2 license?

A: No. License doesn’t transfer with property sale. New owner must reapply under current rules.

Q: How do I check if my census tract is at capacity?

A: Use official city density map – updated in real-time.

📞 Official Resources & Contact Information

City of Austin

Development Services Department

Hotel Occupancy Tax

State of Texas

Texas Comptroller (State HOT)

Travis County

Homestead Exemption Verification

Legal References

  • Austin Municipal Code Chapter 25-2 (Short-Term Rentals)
  • October 2025 amendments to STR ordinance
  • City Council Resolution No. 20250211-048

✅ Action Checklist: Getting Started

Before Applying

  • Verify zoning allows STRs
  • Check HOA restrictions (if applicable)
  • For Type 2: Verify census tract capacity
  • For Type 1: Confirm homestead exemption active
  • Budget $1,350-$2,000 for first-year costs
  • Allow 3-4 months before intended launch

Document Preparation

  • Obtain Certificate of Occupancy
  • Secure STR liability insurance ($300k+ minimum)
  • Create detailed floor plan with safety equipment
  • Get HOA approval letter (if needed)
  • Copy government ID

Property Preparation

  • Install smoke detectors in all bedrooms and hallways
  • Install CO detectors on each floor
  • Purchase 2A:10B:C fire extinguisher
  • Calculate and post occupancy limit
  • Test all safety equipment
  • Clear all exits

Application

  • Create account at AustinTexas.gov/STR
  • Complete online application accurately
  • Upload all documents (under 10MB each)
  • Pay non-refundable fee ($860-900)
  • Save confirmation number

Post-Application

  • Monitor email for city communication
  • Respond to document requests within 30 days
  • Schedule property inspection when notified
  • Be present for inspection (or designate representative)

After Approval

  • Display license number in all online listings
  • Register license with Airbnb, VRBO
  • Register for HOT permits (city and state)
  • Activate STR insurance policy
  • Set quarterly HOT filing reminders
  • Set annual renewal reminder

🤝 Need Professional Help?

When to Hire Assistance

Consider professional help if:

  • First-time STR host unsure of process
  • Complex situation (condo, HOA, saturated area)
  • Previously denied application
  • Multiple properties to license
  • Want to maximize approval chances

Service Options

STR Licensing Consultants: $299-799

  • Application review and guidance
  • Document preparation assistance
  • Eligibility verification
  • Process navigation

Full-Service Application: $1,000-2,000

  • Complete application preparation
  • Document gathering
  • City communication handling
  • Inspection coordination

Attorney Consultation: $300-500/hour

  • HOA disputes
  • Zoning issues
  • Appeal assistance
  • Complex legal situations
Most hosts successfully complete the process independently using this guide.
Questions? Contact City of Austin Development Services: (512) 978-4000

Disclaimer: This guide provides general information about Austin STR licensing requirements as of November 2025. It is not legal advice. Regulations change frequently—always verify current requirements with the City of Austin Development Services Department before making property decisions or submitting applications.

For the most up-to-date information, visit AustinTexas.gov/STR or call (512) 978-4000.

This guide will be reviewed and updated quarterly to maintain accuracy. Last update: November 2025 | Next review: February 2026

STR License Costs & Fees

Get detailed pricing for both license types including application fees, annual renewal costs, and hidden expenses in our comprehensive .

People also asks

What is the penalty for an unlicensed STR in Austin?

Operating an unlicensed short-term rental in Austin carries severe financial and legal consequences. The city imposes fines of $2,000 per day for each day you advertise an unlicensed property. This means a single month of unlicensed operation could result in $60,000 in fines.

Additionally, platforms like Airbnb and VRBO now automatically verify Austin STR licenses and will remove unlicensed listings from their sites. Repeat offenders face potential criminal charges, property liens, and legal action. The city has increased code enforcement staff specifically to identify and prosecute unlicensed operators.

Here’s what makes this particularly serious: You cannot retroactively obtain a license if caught operating illegally, and the penalties apply from the first day of unauthorized advertising or operation.

Given the strict enforcement and automated platform verification, operating without a license carries significant financial and legal risks.

Can an HOA ban short-term rentals in Austin?

Yes, homeowners associations in Austin have full legal authority to ban or restrict short-term rentals, regardless of whether you have a city-issued STR license.

HOAs can prohibit STRs through:

  • CC&R amendments
  • Board resolutions
  • Minimum lease term requirements

The City of Austin requires HOA approval as part of your STR license application. Even if you get a city license, you cannot operate legally if your HOA prohibits it.

HOAs can enforce restrictions through fines, legal action, and even foreclosure for repeated violations.

Pro tip: Always check HOA rules before buying a property for STR use.

How much does STR insurance cost in Austin?

STR insurance in Austin costs between $300 and $1,500 annually depending on coverage level and property type.

Type 1 (owner-occupied):

  • $300–500/year basic
  • $600–900/year enhanced

Type 2 (investment properties):

  • $500–800/year basic
  • $900–1,500/year enhanced

Amenities like pools/hot tubs add $200–400.

Important: Standard homeowners insurance does not cover STR activity.

Do I need an LLC for Airbnb in Austin?

An LLC is not required by the City of Austin, but is often recommended for Type 2 investors for liability protection.

Pros:

  • Asset protection
  • Professional structure
  • Clean bookkeeping

Cons:

  • $300–500 formation cost
  • Annual franchise reporting

Type 1 (owner-occupied) hosts usually don’t need an LLC.

How long does it take to get an STR license in Austin?

The typical timeline is 10–12 weeks, but can range from 8–16+ weeks.

Best case (8 weeks):

  • All documents ready
  • No HOA delays
  • Inspection passed first try

Typical (10–12 weeks):

  • Minor corrections
  • Standard inspection

Extended (14–16+ weeks):

  • HOA approval delays
  • Failed inspections

Apply during November–January for faster results.

Can I Airbnb my house if I have a mortgage?

Yes — but your mortgage may restrict STR use.

Check for:

  • Owner-occupancy clauses
  • STR prohibitions
  • FHA/VA 12-month residency rules

Risk: Violating your mortgage can trigger loan acceleration.

What is Type 1 vs Type 2 STR license in Austin?

Type 1: Owner-occupied, primary residence.

  • No density limits
  • Easier approval
  • $860 fee

Type 2: Non-owner-occupied (investment).

  • 12.5% census tract cap
  • 1,000-foot spacing
  • $900 fee

Does Airbnb collect hotel tax in Austin?

Yes — Airbnb collects the full 17% HOT tax for Austin.

You must still:

  • Register with City of Austin
  • Register with Texas Comptroller
  • File quarterly reports

Direct bookings require you to collect & remit tax yourself.

What are quiet hours for Airbnb in Austin?

Quiet hours:

  • 10 PM–7 AM (Sun–Thu)
  • 11 PM–7 AM (Fri–Sat)

Noise violations can result in license suspension.

Can I get an STR license with code violations in Austin?

No — active code violations cause automatic denial.

Common violations:

  • Unpermitted additions
  • Illegal conversions
  • Electrical/plumbing without permits

You must resolve all violations before applying.

How much money do you need to start an Airbnb in Austin?

Expect $5,000–$15,000 total startup cost including licensing, equipment, and furnishing.

Licensing fees:

  • $860 (Type 1)
  • $900 (Type 2)

Can you transfer an STR license when selling property?

No — STR licenses are not transferable.

New owners must apply under current rules, and may be denied if the area is at capacity.

What happens if my STR insurance lapses in Austin?

Your license is automatically suspended and you must cancel all reservations.

You cannot operate until insurance is reinstated and approved.

📧 Have questions? Contact us or visit the official City of Austin website (https://www.austintexas.gov/) for the latest updates.

© 2025 Austin STR Guide | Information provided for educational purposes only