License types
Three categories. Same fee regardless of type. Difference is what you're allowed to do.
| Type 1 | Type 2 | Type 3 | |
|---|---|---|---|
| Setup | You live there | Standalone house, you don't live there | Apartment building or mixed-use |
| Limit | 1 unit | Up to 2 units. Additional STRs must be ≥1,000 ft apart | Max of 1 unit or 10% of total (apartments), or 25% (mixed-use) |
| Fee (new) | $836.30 | $836.30 | $836.30 |
| Fee (renewal) | $385.30 | $385.30 | $385.30 |
Application
Documents: Owner's driver's license or government ID. Tenant applicants need proof of lease. If someone other than the owner applies, notarized Agent Authorization Form. Certificate of Occupancy and insurance proof dropped October 2025.
| License fee | Notification fee | Total | |
|---|---|---|---|
| New | $789.00 | $47.30 | $836.30 |
| Renewal | $338.00 | $47.30 | $385.30 |
Non-refundable. 2-year validity (was 1 year before October 2025).
Submit through: New online portal launches May 18, 2026. Until then, Austin Finance Online (AFO). Upload docs, pay by card or e-check, email copy to STRLicensing@austintexas.gov.
Tax
17% total Hotel Occupancy Tax. 11% City of Austin. 6% State of Texas.
Airbnb and Vrbo collect and remit automatically. You do not calculate or send the money yourself.
You still file a quarterly report. Including a zero report if no bookings. Missing it is a violation. HOT desk: hotels@austintexas.gov, 512-974-2590 (press 1).
Operating rules
Local contact. If you don't live in Travis, Williamson, Hays, Bastrop, or Caldwell County, designate someone who does. Reachable 24/7. Must be able to arrive within 2 hours. Not a mailbox.
Noise. Printed copy of these rules required in the unit:
- 10 a.m. to 10 p.m.: sound equipment ≤75 dB at property line
- 10 p.m. to 10 a.m.: zero sound equipment audible beyond property line
- 10:30 p.m. to 7 a.m.: no music or noise audible to adjacent residences
Neighbor notification. City mails your contact info to every property within 100 feet at each issuance and renewal. Automatic. You pay for it in the notification fee.
Penalties
- Operating without license: fines + platform removal (July 1, 2026 onward)
- Advertising unlicensed STR: prohibited, City Ordinance §4-23-34
- Repeated noise or nuisance: license revocation
Data
Sources: Austin Development Services memo (April 30, 2026), KUT/NPR, StaySTRA (Feb 2026).
- 2,750 active licenses (March 2026). Up 19.6% year-over-year.
- ~9,300 total listings on Airbnb/Vrbo. ~7,000 unlicensed (roughly 75%).
- $11.6M HOT revenue FY2025. FY2024 was $7M. FY2026 on track for $15M+.
- 2,785 unlicensed addresses identified by scanning software since January 2026. Result: 65 violation notices, 28 citations, 32 new applications.
- 94% of STR complaints involved unlicensed rentals.
- Average daily rate: $284. Median monthly revenue: $1,967 (StaySTRA).
Timeline
| Date | Change |
|---|---|
| Feb 2025 | STRs permitted as accessory use in all residential zones |
| Oct 2025 | Regs moved to business code (Title 4). 2-year licenses. CoO + insurance dropped. Tenants can apply. |
| May 18, 2026 | New online licensing portal |
| Jul 1, 2026 | Platform enforcement: license display + delisting begins |
Investor assessment
Independent scoring. Not from the city.
| Factor | Score | |
|---|---|---|
| Regulatory burden | 4/10 | Three tiers, spacing rule, 2-year cycle. Type 2 investors absorb the most friction. |
| Fee burden | 5/10 | $836 entry. 17% tax rate is high for Texas but not extreme. |
| Enforcement risk | 3/10 | July 2026 is a hard line. 75% of inventory is non-compliant. Software is live. |
| Market upside | 8/10 | $284 ADR, $1,967/mo median. SXSW, ACL, F1, UT football. Licensed operators should gain pricing power as unlicensed supply is removed. |
| Investor viability | 6/10 | Type 1: solid. Type 2: 1,000ft spacing + property tax + local contact eat margins. Portfolio play: not viable due to per-owner caps. |
Year 1 cost estimate (Type 1)
| Item | Estimate |
|---|---|
| License + notification | $836 |
| Quarterly filing (accountant or self) | $200 – $600 |
| Furnishing & setup | $3,000 – $8,000 |
| Photography | $200 – $400 |
| Smart lock + noise monitor | $300 – $500 |
| STR insurance rider | $400 – $800 |
| Total | $4,936 – $10,136 |
At $1,967/mo median revenue, breakeven at month 3–6. The big variable is not cost. It is what happens when 7,000 listings get pulled.
July 2026 projection
Two simultaneous effects when delisting begins:
- Supply contracts. Potentially 75% of current Austin listings disappear.
- Licensed operators gain pricing power. Fewer rooms, same demand.
Enforcement is phased over six months, nuisance complaints first. A 7,000-property overnight removal is unlikely. A 30–50% contraction is realistic. Licensed hosts benefit either way.
Verdict by profile
| Profile | |
|---|---|
| Owner lives on-site, rents spare room or ADU | Type 1. Straightforward. July enforcement removes illegal competition. Do it. |
| Out-of-state investor buying standalone house | Type 2. Spacing rule, high property tax, local contact requirement. Model 35–45% occupancy to stress-test. Marginal. |
| Multi-property portfolio | Per-owner caps and 1,000ft spacing make scaling near-impossible. Wrong market. |
| Currently unlicensed, waiting | Apply now. Enforcement software is live. Contracts are signed. Grace period is ending. |