Texas short-term rental rules for owners

Texas is the large state where the answer to "is it legal?" changes most from one city to the next. There is no statewide statute protecting short-term rentals from local bans, and none shielding cities from owners' lawsuits either. The result is a map drawn by city councils and, increasingly, by courts.

No preemption, but constitutional limits

Proposals to stop Texas cities from banning short-term rentals in residential neighborhoods have been filed repeatedly; in 2023 one was watered down to a study, and none has become law. Cities therefore keep their zoning power. What restrains them is the Texas Constitution. In Zaatari v. City of Austin (2019), a state appeals court struck down parts of Austin's ordinance, including the phase-out of non-owner-occupied rentals in residential zones, as an unconstitutional interference with property rights. That decision has shaped the litigation that followed, but it is not a blanket rule: each ordinance is judged on its own record.

The contrast between the two big North Texas cities shows how uncertain this remains. In Dallas, a zoning ordinance that would have pushed short-term rentals out of single-family districts has been blocked by injunction, upheld on appeal, and taken by the city to the Texas Supreme Court; according to the city, the injunction also covers the registration ordinance, so neither rule is currently enforced. In Fort Worth, a court ruled in March 2025 that the city may keep short-term rentals out of residential areas.

Taxes: hotel occupancy tax, state and local

Texas has no state income tax, and lodging is taxed through the hotel occupancy tax. The state rate is 6% of the room price, owed on stays under 30 consecutive days when the charge is $15 a day or more. It applies explicitly to condos, bed and breakfasts and residential short-term rentals. Cities, and certain counties and special districts, add local hotel taxes, filed separately with the local government. Online travel companies and rental platforms may collect some or all of this; many cities still require the owner to register and show proof of hotel tax registration to obtain a local permit.

Our Texas markets by regime

License: permits with real conditions.

• Austin: licensing overhauled in 2025. Short-term rentals are an accessory use in all residential zones with a valid license, licenses now last two years, and density limits apply by site. From July 1, 2026, platforms must display license numbers and remove unlicensed listings on the city's request.
• San Antonio: non-owner-occupied "Type 2" permits are limited per block face.
• Fredericksburg: Hill Country wine and weekend demand, but permits in residential districts are rationed by zoning district with separation distances.

Registration: a local permit or certificate, no quota.

• Houston: a new city registration certificate for rentals under 30 days, requiring an emergency contact, hotel tax proof and human-trafficking awareness training. From January 1, 2027, the city will ask platforms to remove listings without a certificate.
• Dallas: zoning and registration ordinances both on hold under injunction while the case is before the Texas Supreme Court.
• Galveston, Corpus Christi (including Padre Island) and South Padre Island: beach markets where short-term renting is broadly accepted, with registration and hotel tax.
• College Station and Waco: event-driven demand from university football and tourism, with annual permits.

Open: no dedicated municipal ordinance at the time of our review.

• Amarillo, Lubbock, Killeen, McAllen and El Paso, where only hotel tax obligations apply. El Paso has discussed a framework, so watch that one.

Fort Worth is absent from the list for the reason above, and our broader East and West Texas area pages remain under review: without state rules, each small city and county sets its own course, and large unincorporated areas have no zoning at all.

Deed restrictions: a Texas specialty

Much of suburban Texas is governed by deed restrictions and HOA covenants. In Tarr v. Timberwood Park Owners Association (2018), the Texas Supreme Court held that a covenant limiting homes to "residential purposes" did not, on its own, forbid short-term rentals. Associations have since responded by amending their documents with explicit rental rules, and Texas courts have upheld such amendments in a number of cases. Read the current restrictions, not the ones from when the neighborhood was built.

Our advice

Buy the ordinance before the house. In Texas, that means checking the city's current code and any pending litigation, the deed restrictions, and the hotel tax registration steps for both state and city. Cities revise their rules often, and two neighboring suburbs can be opposites. If you own a property here or are considering one, we study every request and tell you honestly whether and how we can help.