🏠 Short-Term Rentals & Austin Taxes: What Airbnb Owners Must Know 💼💸

Austin is a top destination for music lovers, tech professionals, and foodies alike — and with that comes a booming short-term rental (STR) market. Whether you’re already hosting on Airbnb or thinking about getting started, there’s one thing you can’t overlook: taxes.

From local permits to state hotel taxes, STR owners in Austin have a few important boxes to check. Here’s what you need to know to stay legal and profitable in the Live Music Capital of the World. 🎸🏡

📝 Step 1: Get Registered with the City of Austin

If you plan to rent out your property on a short-term basis (less than 30 days at a time), the City of Austin requires you to obtain a Short-Term Rental License.

There are three types of STR licenses in Austin:

• Type 1: Owner-occupied primary residences

• Type 2: Non-owner-occupied single-family homes (limited availability)

• Type 3: Multifamily or duplex properties

💡 Pro Tip: The City has placed restrictions on new Type 2 licenses, so if you’re buying with Airbnb in mind, check zoning and eligibility first.

💰 Step 2: Collect & Pay Hotel Occupancy Taxes (HOT)

Yes, short-term rentals in Austin are subject to hotel taxes — both state and local.

📍 City of Austin:

• Local Hotel Occupancy Tax (HOT): 11%

• You must file and remit this monthly or quarterly through the city’s online portal.

🏛️ State of Texas:

• State Hotel Tax: 6%

• This is filed through the Texas Comptroller’s Office.

If you host through Airbnb or VRBO, some of these taxes may be collected and remitted on your behalf — but not all. It's important to double-check.

📊 Step 3: Keep Good Records

Tax time can get complicated. Keep accurate records of:

• Rental income

• Platform fees

• Repairs & maintenance

• Utilities and cleaning expenses

• Taxes collected and remitted

These records will make filing taxes (and possibly defending them) much smoother.

🧾 Bonus Tip: Federal Income Tax Still Applies

Don’t forget, your Airbnb earnings are taxable income. Depending on your setup, you may qualify for deductions like mortgage interest, property taxes, depreciation, and more. Talk to a tax advisor who understands STRs to get the most out of your returns.

✅ Stay Compliant, Stay Profitable

Austin’s STR market is lucrative, but it’s also regulated. Staying compliant with licenses and taxes ensures your business runs smoothly — and avoids costly penalties.

Thinking of buying a property to use as a short-term rental? Or want to evaluate if your current home qualifies? I can help you navigate the local rules and identify STR-friendly investment opportunities.

📲 Let’s chat if you’re looking to buy, sell, or invest in Austin’s short-term rental market! I’ll help you find the right property and stay on the right side of the law.