Short-Term Rental License: Do You Need It to Run Airbnb?

Thinking about becoming a vacation rental host? Renting out your property short-term on platforms like Airbnb or Vrbo can be a viable source of income, but you should remember that you’re starting a business. That means you must understand the laws and regulations governing the short-term rental market and apply for the relevant short-term rental license before listing your property.

Do You Need a License to Do Airbnb?

What rules and regulations apply to you? Do you need a license to do Airbnb in your city? What taxes do Airbnb hosts need to pay in your area? These are the key questions for anyone considering becoming a host. It’s important to ensure that you fully comply with any laws for your area at the city and state levels.

STR regulations are very local in nature and vary from city to city. While there are cities with liberal STR rules, some don’t allow short-term rentals at all, and many cities have laws restricting your ability to host paying guests for short periods. These laws are part of a city’s zoning or administrative codes. For example, the city of Irvin in California prohibits all short-term rentals within the residential zones, and it’s illegal to promote short-term rentals on such rental listing sites as Airbnb and Vrbo.

In many cities, you must register, get a permit, or obtain a license before you list your property or accept guests. For example, in Seattle, hosts must apply for both business and short-term rental licenses. Hosts are also required to post license numbers on their listings on OTA platforms, including Vrbo and Airbnb. Additionally, the regulations limit the number of units hosts can rent to their primary residence, plus one additional unit.

You can learn more about the rules and regulations in your area if you visit the Airbnb Help Center. There you can find region-specific information to get a general sense of the hosting requirements for obtaining the Airbnb license in your country, state, county, or city. But regulations change frequently, so visiting your local government website and reviewing local STR policies and requirements is important before listing your space on Airbnb.

Starting a vacation rental business in the right city is key to generating profit, but it’s also important to ensure effective property management. Using vacation rental software like Hospitable, you’ll be able to save time by automating most routine operations and make your business more efficient.

Short-Term Rental License: What Licenses and Permits Are Required?

It all depends on the short-term rental regulations of the city or county where your rental property is located. Still, common licenses and permits you may need to obtain as a vacation rental owner include a general business license and a short-term rental license.

A general business license (sometimes called a business tax certificate) is a basic license required in most states for operating any business, including short-term rental owners. Many local governments have sections on their websites explaining the process of applying for a business license and providing relevant forms. If you can’t find this information online, email or call them directly. And if your city doesn’t have a business licensing department, you should visit your local tax office to get the information.

Most likely, you’ll also need to get a short-term rental license due to the discussed regulations and restrictions. This document demonstrates that your rental property complies with zoning restrictions and meets certain health and safety standards. It also helps you ensure that all neighboring properties have been notified.

You’ll need to register on your local short-term rental licensing platform, submit your application, and pay a licensing fee. Keep in mind that your licensing department may ask you to provide other documents, for example, floor plan of the property, proof of primary residence, proof of property liability insurance, etc.

What Are the Penalties for Airbnb License Violations? 

Local governments vary greatly in how they enforce short-term rental laws and regulations. Penalties for non-compliance with local legislation may include hefty fines or other enforcement, including business closure. Moreover, fines for violations are typically levied daily. So, compliance is key to keeping your short-term rental business profitable.

Final Thought

Vacation rental properties are subject to different rules and regulations that vary greatly depending on the location, and you must comply with them to avoid serious legal implications. So if you want to become a short-term rental host, you need to check the applicable laws and apply for the relevant general business and short-term rental licenses. And if you have any questions, you should consult a local lawyer or tax professional.

Keep in mind that regulations for short-term rentals can change annually since lawmakers lack consensus on how regulated the industry should be. That’s why STR hosts should remain vigilant and frequently check their location’s laws and requirements to stay informed of these constant changes.