STR Rules · Texas

Short-Term Rental Rules in Texas

Texas is a home-rule state — cities have significant authority to set their own STR rules within state constitutional limits. There is no statewide STR statute comparable to Florida's preemption law. This means Texas regulations are highly city-specific, ranging from Austin's detailed licensing system to Houston's comparatively light touch.

Austin

Austin has one of the most developed STR regulatory systems in Texas:

Type 1 (owner-occupied): The STR is your primary residence. You may rent rooms or the whole unit. License required (~$425/year). No cap on nights.
Type 2 (non-owner-occupied): Investment properties where the owner does not live. Austin has stopped issuing new Type 2 licenses in single-family residential neighborhoods — the city passed an ordinance phasing out non-owner-occupied STRs in most residential zones. Existing licenses can be renewed until they lapse.
License required. Apply through Austin Development Services. Licenses must be renewed annually.
Hotel Occupancy Tax (HOT): 9% city rate, plus 6% state HOT for a combined 15% on stays under 30 days. Airbnb and Vrbo collect and remit for Austin.
Properties in areas zoned SF-1, SF-2, SF-3 face the most restrictions. Mixed-use and downtown zones are more permissive.

The practical impact for investors: buying a non-owner-occupied investment property in Austin's residential neighborhoods for STR purposes is now very difficult unless you acquire an existing Type 2 licensed property.

Dallas

Dallas requires a Certificate of Registration for STRs (adopted in 2021). Annual fee ~$150–$300.
No owner-occupancy mandate — investor-owned STRs are permitted citywide.
Operators must designate a 24/7 responsible party who can respond to complaints within one hour.
Properties must meet fire and life-safety codes; inspections may be required.
Quiet hours, occupancy limits (typically 2 per bedroom + 2), and parking requirements apply.
HOT: 7% city rate plus 6% state HOT (13% combined).

Houston

Houston is notably the largest U.S. city without traditional zoning. This affects STR regulation:

No citywide STR permit or registration requirement as of 2025.
A business license (City of Houston General Business License) is recommended but not always required.
Private deed restrictions — common in Houston's established neighborhoods — frequently prohibit commercial uses including STRs. Deed restrictions are enforceable and carry significant penalties.
Many Houston area HOA communities (The Woodlands, Sugar Land, Katy) have their own STR prohibition rules.
HOT: 7% city rate plus 6% state HOT. Hosts are responsible for remitting to the city unless the platform has a direct agreement.

San Antonio

San Antonio requires a Short-Term Rental Permit issued by the Development Services Department (~$100–$200/year).
No owner-occupancy requirement for most single-family homes.
Historic district properties (King William, Lavaca, etc.) face additional review.
Hotel Occupancy Tax applies; platforms collect and remit.
HOT: 9% city plus 6% state = 15% combined.

Galveston

Galveston is one of Texas's most active beach vacation-rental markets:

Registration required through the City of Galveston Finance Department.
No owner-occupancy mandate. Investor-owned beach houses are a significant part of the market.
Occupancy limits: typically 2 people per bedroom. Fines for exceeding limits are actively enforced.
Designated outdoor gathering areas and noise ordinances apply.
HOT: 7% city plus 6% state plus Galveston County TDT. Total can reach 17–18% combined.

Texas Hotel Occupancy Tax — State Framework

All Texas STR operators must collect and remit the state Hotel Occupancy Tax (HOT) of 6% on stays under 30 consecutive days, regardless of city rules. In addition:

Cities can add up to 7% local HOT.
Counties in certain tourism zones can add 2%.
Platforms like Airbnb and Vrbo remit state and most local HOT automatically in Texas — but verify for smaller or newer municipalities.
Properties earning more than $5,000/year in rental revenue may need to file a state HOT return directly with the Texas Comptroller even if the platform collects the tax.

Key Takeaways for Texas Investors

Texas has no statewide STR preemption. City rules vary dramatically — always research the specific city.
Austin's Type 2 ban makes investor-owned residential STRs effectively impossible in new applications — a significant consideration for Austin purchases.
Houston's lack of zoning is not a loophole; deed restrictions are commonly enforced in lieu of zoning and can prohibit STRs.
State HOT (6%) applies everywhere; add local HOT for the full tax burden.
Check HOA/deed restrictions before purchase — these are private contractual obligations that often prohibit STRs regardless of city rules.

Last reviewed June 2025. Texas STR regulations evolve frequently at the city level. Verify current rules with the relevant city planning or finance department.