How to Start a Short-Term Rental in Austin: Permit, Taxes and Rules

Austin has some of the most detailed short-term rental (STR) rules in Texas. Before your first guest checks in, you need an Austin short-term rental license from the City of Austin, a property that fits the city's unit caps, a local contact who lives in an approved county, and a plan for occupancy tax. Texas adds far less on top of that. The state has no general business license, no personal income tax and no publication requirement, so most of your state paperwork comes from forming an entity (if you choose an LLC) and handling the hotel occupancy tax.

This guide walks through the steps in the order most hosts should tackle them. The fees and rules below reflect the City of Austin's published requirements as of October 2026.

Informational content only. This article is not legal or tax advice. Rules change, so confirm current requirements with the City of Austin and the state agencies linked at the end of this guide. For lease questions, zoning disputes, HOA restrictions, or decisions about entity structure and taxes, talk with a qualified attorney or CPA before you invest in a property.

What You Need Before You Start

Gather these items first. Several steps depend on them.

• The property address and parcel location, including whether it sits inside Austin city limits or in the extraterritorial jurisdiction (ETJ)
• Written landlord permission if you rent the property rather than own it
• The name, phone number and address of a local contact who lives in Travis, Williamson, Hays, Bastrop or Caldwell County
• A payment method for the $736.60 new license fee (or $369.60 at renewal)
• A decision on how you will own the business: as a sole proprietor, or through a Texas LLC
• If you choose an LLC: the $300 Certificate of Formation (Form 205) and a Texas registered agent with a physical street address
• A booking record spreadsheet that tracks nightly stays, guest counts and revenue by month, for quarterly tax reports
• Accounts on each booking platform you plan to use

Step 1: Confirm Your Property Fits Austin's Unit Caps

The city limits how many STR units a property or site can hold, and the limits depend on property type. Check these numbers before you sign a lease or close on a purchase.

Property type	Maximum STR units under city rules	Notes
Single-family	Up to 2 STR units per site	Additional STRs elsewhere must be at least 1,000 feet apart. Confirm how the city counts units on your lot before you buy.
Multifamily	The greater of 1 unit or 10%	Apply the larger of the two figures to your building.
Mixed-use	The greater of 1 unit or 25%	A higher share is allowed than for multifamily.

Check the jurisdiction too. If your property is in the ETJ, outside city limits, you need no City of Austin license and no city hotel occupancy tax (HOT). Do not assume this from the mailing address. An Austin address can sit outside the city, and the city limits on a map do not always match mailing addresses. Confirm the parcel's location with the city before you plan around either answer.

Step 2: Name a Local Contact in an Approved County

Austin requires a local contact who lives in Travis, Williamson, Hays, Bastrop or Caldwell County. This person must be able to respond to guest issues, city questions and platform notices. Choose someone who can reach the property within a reasonable time, not a friend who lives three hours away.

If you use a property manager or co-host, check that the person you name as local contact lives in one of those five counties. Have their name, phone number and address ready before you apply.

Step 3: Choose How You Will Own the Business

Your entity choice drives your state filings and annual obligations. It also affects liability and taxes in ways that depend on your situation, so talk with a CPA or attorney before you choose.

Option A: Sole proprietor

A sole proprietor forms no state entity. If you operate under a name other than your own, such as a brand name for your guest house, you file an assumed name certificate with the county clerk in each county where you conduct business. County clerk fees vary by county, so confirm the amount with the clerk. Counties in Texas license nothing else for this purpose.

Option B: Texas LLC

1. Check the name. The name must be distinguishable in Secretary of State records from existing filings and must include an organizational designation such as Limited Liability Company, Limited Company, LLC, L.L.C., LC or L.C. Call (512) 463-5555 for a preliminary availability check, or search the Secretary of State business database.
2. Reserve the name if you need time. A name reservation lasts 120 days and costs $40 on Form 501.
3. File the Certificate of Formation (Form 205). The filing fee is $300. File through SOSDirect for the fastest processing. The Secretary of State publishes no guaranteed standard turnaround. Mailed or hand-delivered filings generally take at least one business day just to show as received. Paid expedite tiers give guaranteed timing: Standard Expedite is $50 per document and is typically processed in two to three business days, Next Day Expedite is $500, and Same Day Expedite is $750 for filings received by 12:00 p.m. Expedite fees are in addition to the filing fee.
4. Appoint a registered agent. Your registered agent must be a Texas resident individual or a Texas-registered business entity that has consented to serve. The LLC cannot serve as its own agent. The registered office must be a physical Texas street address where the agent can be served during business hours, so a post office box or mail forwarding service alone does not meet the rule.
5. File an assumed name if you use a brand name. LLCs file the Assumed Name Certificate (Form 503) with the Secretary of State for $25. Since September 1, 2019, LLCs no longer also file with the county clerk.

Texas does not require a publication notice after formation. Changing your registered agent or office costs $15, and resigning as registered agent has no fee.

Step 4: Apply for the Austin STR Operating License

The city's current fees for a new license total $736.60, made up of a $642 license fee and a $94.60 neighbor notification fee. Renewal costs $369.60, made up of a $275 license fee and the same $94.60 neighbor notification fee. Licenses are valid for two years, a change that took effect in October 2025. Licenses are non-transferable, so a buyer of the property must apply for their own license.

Two requirements you may have heard about no longer apply. A certificate of occupancy and proof of insurance are not required for the city license. Do not pay for either to satisfy the license application, though you should still decide whether you want insurance for your own protection.

Watch for outdated numbers. Some third-party guides still quote $836.30 for a new license or $385.30 for renewal. Those figures are out of date. Use the fees on the City of Austin's current short-term rental page.

The application process generally follows these steps:

1. Confirm your unit count, property type and jurisdiction under Step 1.
2. Confirm your local contact meets the county requirement under Step 2.
3. Search for "short-term rental" on the City of Austin's official website, austintexas.gov, and open the current application.
4. Enter the property, owner or operator and local contact information exactly as it appears on your deed, lease and state filings.
5. Pay the $736.60 new license fee, which includes the neighbor notification fee.
6. Record the license number when it is issued. Your platform listings will need it.

The city's page is the source for current processing times. Plan for that lead time before you set a launch date.

Step 5: Handle Hotel Occupancy Tax and Other Filings

Austin's occupancy taxes add up to 17% on a stay. The city HOT is 11%, made up of 9% plus a 2% venue tax. The state HOT is 6%.

Booking platforms have collected and remitted hotel occupancy tax since April 1, 2025. You still file quarterly reports, though. Keep your own nightly rate and total records for each booking, and confirm the report due dates and filing method with the City of Austin. Do not assume the platform's remittance replaces your report.

The Texas Comptroller of Public Accounts administers the state 6% hotel occupancy tax. Check with the Comptroller on your registration and reporting obligations for the state tax, and on whether your rental needs a sales and use tax permit. Texas issues that permit at no charge, and it typically takes two to three weeks to process.

If you formed an LLC, you also have an annual state filing. The Public Information Report is due May 15 each year to the Comptroller, not the Secretary of State, and is filed with the franchise tax report. For the 2026 and 2027 report years, entities with total revenue at or below $2,650,000 owe no franchise tax but must still file the Public Information Report. Above that threshold, the rate is 0.375% for retail and wholesale and 0.75% for other entities, with a 0.331% EZ Computation rate for entities under $20 million in total revenue. Confirm which rate applies to you with the Comptroller or a CPA.

Texas has no state income tax and no corporate income tax. This guide does not cover federal tax obligations, which a CPA can review with you.

Step 6: List Only Licensed Units

Platform rules took effect July 1, 2026. Listings must display the license number in its required field. When the city asks, the platform removes any listing it cannot tie to a valid license. Enter your license number on every listing for the property, and do not publish a listing until the license is issued.

Step 7: Set Your House Rules and Tenant Permissions

If you rent the property, tenants may operate an STR only with the landlord's permission. Get that permission in writing and put it in the lease. Spell out who may list the unit, guest limits, quiet hours, parking, trash handling, and how the local contact responds to problems. Have an attorney review the lease language, because this guide does not cover landlord-tenant law.

If you own the property, check HOA covenants and deed restrictions separately. A city license does not remove private restrictions on how you use the home.

Step 8: Calendar Renewals and Keep Records

Set reminders for the following: the Austin license renewal every two years at $369.60, each quarterly hotel occupancy tax report, the May 15 Public Information Report if you formed an LLC, and any registered agent change. Keep copies of your license, Certificate of Formation, registered agent consent and tax filings in one folder that you can share with an accountant.

Fee Summary

Item	Amount	Source
Austin STR operating license, new	$736.60 ($642 license fee plus $94.60 neighbor notification fee)	City of Austin
Austin STR license renewal	$369.60 ($275 plus $94.60)	City of Austin
LLC Certificate of Formation (Form 205)	$300	Texas Secretary of State
Name reservation (Form 501, 120 days)	$40	Texas Secretary of State
Assumed name certificate for an LLC (Form 503)	$25	Texas Secretary of State
Change of registered agent or office	$15	Texas Secretary of State
Standard expedite, per document	$50, in addition to the filing fee	Texas Secretary of State
City hotel occupancy tax	11% (9% plus 2% venue)	City of Austin
State hotel occupancy tax	6%	Texas Comptroller
Texas sales and use tax permit	No charge	Texas Comptroller
Franchise tax no-tax-due threshold	$2,650,000 for the 2026 and 2027 report years	Texas Comptroller
Public Information Report (LLCs)	No Secretary of State fee; due May 15 to the Comptroller	Texas Comptroller

What to Expect After You Launch

Once your license is issued and your listings show the license number, you can accept bookings. The biggest timing risks are the city's processing time and any entity filing that runs slow. Hosts who allow extra time for both often avoid a delayed launch, though your actual timeline depends on the city's current processing and how complete your paperwork is.

This guide does not estimate revenue. Occupancy, nightly rates, cleaning, maintenance and furnishing costs vary widely by property and season. Your own insurance needs are separate from the city's requirements, and an insurance agent can explain what coverage fits your property.

Common Mistakes to Avoid

• Using outdated fees. Pay the current $736.60 for a new license and $369.60 for renewal, not the older figures quoted by some guides.
• Assuming a certificate of occupancy or insurance is required for the license. Current city rules do not require either one for the license.
• Listing before the license is issued, or listing without the license number.
• Naming a local contact outside the five approved counties.
• Assuming the license transfers when you sell. It is non-transferable, so the buyer applies for their own.
• Assuming an Austin address means city limits. Properties in the ETJ need no city license or city HOT, but you must confirm the jurisdiction first.
• Believing platform tax collection replaces your report. Platforms have collected hotel occupancy tax since April 1, 2025, but you still file quarterly reports.
• Skipping the LLC's Public Information Report because your revenue is under the franchise tax threshold. Under the threshold you owe no franchise tax, but you must still file.
• Using a post office box or yourself as registered agent. The registered office must be a physical Texas street address, and an LLC cannot serve as its own agent.
• Searching for a state or county STR license. Texas has no general business license, and counties license nothing beyond the assumed-name filing by sole proprietors at the county clerk.

Official Resources

• Texas Secretary of State: https://www.sos.state.tx.us/corp/index.shtml
• SOSDirect online filing: https://direct.sos.state.tx.us/acct/acct-login.asp
• Business name search: https://www.sos.state.tx.us/corp/searches.shtml
• Assumed name questions: https://www.sos.state.tx.us/corp/namefilingsfaqs.shtml
• Name reservation form (Form 501): https://www.sos.state.tx.us/corp/forms/501_boc.pdf
• Texas Comptroller of Public Accounts: https://comptroller.texas.gov/taxes/
• Sales and use tax permit: https://comptroller.texas.gov/taxes/permit/
• City of Austin short-term rental information: austintexas.gov (search "short-term rental")
• Texas Small Business Development Center Network: https://www.sbdctexas.org/

Talk with a qualified attorney about lease, zoning and HOA questions, and with a CPA about entity choice and tax filings, especially if you plan to operate several units. Confirm every fee and deadline in this guide on the agency page before you pay or file.