Airbnb Legality in Texas: Permits, Taxes, and City Rules Explained

Got extra space in your home and not sure what to do with it? Short-term rentals (STRs) through platforms like Airbnb and Vrbo can be an option for homeowners and landlords. While exact figures vary, Dataopedia estimates more than 5 million people serve as Airbnb hosts across more than 200 countries and regions.

For Texas homeowners, renting out property could provide extra income — but is it always legal?

What is a short-term rental?

According to the Texas Municipal League, “short-term rental” is not defined in state law. The term generally refers to private homes, condominiums or apartments rented for brief stays as an alternative to hotels or motels.

These rentals are typically advertised and booked through platforms such as Vrbo, Airbnb, HomeAway and Vacasa. Many cities have adopted their own definitions and regulations through local ordinances.

Can I turn my house into an Airbnb?

Texas law is relatively permissive when it comes to short-term rentals.

While exact numbers vary, Homes and Rentals.com estimates there were more than 80,000 active Airbnb hosts in Texas in 2023. The state prohibits cities and counties from adopting rules that outright ban or effectively prohibit short-term rentals.

However, property owners must register with the Texas Comptroller’s Office and pay the state hotel occupancy tax, along with any applicable local lodging taxes.

Cities can still impose their own restrictions, so it’s important to review local rules before listing a property.

How many days a year can I Airbnb my house?

In Texas, a short-term rental generally refers to a residential property rented for fewer than 30 consecutive days.

The state does not issue a statewide permit, cap the number of STR licenses or regulate where rentals can operate. Those decisions are left to local governments.

What is required to have an Airbnb in Texas?

Many large Texas cities require permits.

In Austin, San Antonio and Dallas, hosts typically must register their properties, include a registration number on listings and renew licenses regularly.

Requirements often include proof of ownership, disclosure of whether the property is owner-occupied and a basic floor plan identifying sleeping areas.

Here’s a look at requirements in major Texas cities:

• Austin: An operating license for a new STR costs $836.30, including a $789 license fee and $47.30 notification fee. Fees are nonrefundable.
• Dallas: Annual registration with the city, including proof of ownership or consent, zoning compliance and basic property information.
• Houston: Hosts must register, pay a $275 annual fee and collect a 7% local hotel occupancy tax.
• San Antonio: Hosts must obtain a permit, pay 9% city and 1.75% Bexar County hotel occupancy taxes, and follow zoning and noise rules.

Can I stop my neighbor from running an Airbnb?

Short-term rentals can create concerns for neighbors, including noise, parking issues and frequent turnover of guests.

According to NOLO, here’s what people can do to prevent their neighbor from using a home as an Airbnb.

• Talking to the neighbor directly
• Reviewing local laws and regulations
• Reporting the listing to Airbnb, Vrbo or other platforms
• Contacting local authorities about violations
• Checking noise and nuisance ordinances
• Considering mediation or civil action

Are short-term rentals legal in Texas?

There is no statewide law banning short-term rentals. Cities set their own rules through local ordinances.

Legal battles over STR regulations have reached the Texas Supreme Court.

In one case, City of Grapevine v. Muns, homeowners challenged a city ban on short-term rentals. After a Fort Worth appeals court ruled against the city in 2021, the Texas Supreme Court declined to hear the case in June 2023, allowing the lower court’s ruling to stand.