Short-Term Rental Investor's Guide to Frankfort, Kentucky

Executive Overview: Are Short-Term Rentals Allowed in Frankfort, KY?

YES - Short-term rentals are explicitly allowed in Frankfort, Kentucky and Franklin County, but they are heavily regulated. The city has adopted comprehensive regulations through Ordinance No. 22, 2024 Series, which went into effect December 2024. Both city and county jurisdictions require registration, licensing, and compliance with specific operational standards.

How to Start a Short-Term Rental Business in Frankfort/Franklin County

Step-by-Step Process:

1. Determine Jurisdiction: Verify if your property falls within City of Frankfort limits, Franklin County (unincorporated areas), or both.

2. Property Classification: Identify whether your STR will be:

   • Owner-occupied (you live on-site during guest stays)
   • Non-owner-occupied (guests have exclusive use of the entire property)

3. Zoning Compliance: Ensure your property is in a zoning district that permits STRs:

   • Owner-occupied STRs are permitted in most residential districts
   • Non-owner-occupied STRs require conditional use permits in Special Capital and Special Historic Districts

4. Complete Registration: Submit annual registration to appropriate jurisdiction(s)

5. Obtain Business License: Required for all STR operations regardless of frequency

6. Schedule Inspection: Rental housing inspection required at initial registration

7. Set Up Tax Collection: Implement systems to collect and remit all required taxes

Required Documents, Permits, Licenses, and Guidelines

City of Frankfort Requirements:

Registration:

• Short-Term Rental Registration Application
• Must be submitted annually by May 1st
• $250 annual regulatory license fee per STR unit
• affidavit acknowledging compliance with all city codes

Business License:

• Business License Application
• No exceptions for infrequent rentals

Inspection:

• Rental housing inspection required at initial registration
• Must comply with Kentucky Residential Code
• Evacuation plan required
• Smoke detectors must meet state standards

Franklin County Requirements:

Registration:

• Register with Franklin County Planning & Zoning Department
• Business License Application

Required Documentation:

• Proof of primary residence (for owner-occupied classification)
• Local contact information
• Platform listing details
• Compliance with county business regulations

Specific Regulations by Jurisdiction

City of Frankfort STR Regulations (2024 Ordinance):

Definitions:

• Owner-Occupied STR: Residential dwelling where owner lives on-site during guest stays, including accessory dwelling units on same property as owner-occupied residence
• Non-Owner-Occupied STR: Property where owner does not reside during guest stays
• Primary Residence: Must be documented by at least two of: motor vehicle registration, driver's license, voter registration, tax documents, utility bill

Operational Standards:

• Maximum stay: 29 consecutive days per occupant
• Single rental contract per dwelling unit at any time
• Occupancy limit: 2 people per bedroom plus 4 additional individuals
• No food or alcoholic beverage service to guests
• Outdoor signage prohibited
• Contact information must be posted conspicuously inside unit

Zoning and Capacity Limits:

• Special Capital District: Non-owner-occupied STRs capped at 5% of total dwelling units
• Special Historic District: Maximum 8 non-owner-occupied STRs total
• Apartment Buildings: Maximum 50% of units under common ownership can be STRs
• Owner-occupied STRs may rent up to 24 days/year while not residing on property

Safety and Compliance:

• Evacuation plan required
• Smoke detector compliance with Kentucky Residential Code
• Parking: 1 space per rental contract per Article 12 requirements
• Noise regulation compliance (Section 131.01)
• Pet restrictions per Chapter 90
• No special events exceeding occupancy limits

Conditional Use Requirements: For non-owner-occupied STRs in Special Capital/Special Historic Districts, Board of Adjustment considers:

• Number and concentration of existing STRs in vicinity
• Applicant's compliance record with other STRs
• Occupancy rates of nearby STRs
• Nuisance citations affecting nearby STRs

Franklin County STR Regulations:

Business License Requirements:

• Required for all STR operations
• No exceptions for infrequent rental
• Annual renewal required

Operational Standards:

• Same Kentucky sales and transient tax obligations as city properties
• Compliance with county planning and zoning requirements
• Registration with Franklin County Planning & Zoning Department

State-Level Kentucky Requirements:

Tax Obligations:

• Kentucky Sales Tax: 6% (collected by Airbnb only)
• Kentucky Transient Room Tax: 1% (collected by Airbnb only)
• Local Taxes: Owner responsible for remitting all local taxes not collected by platforms

Tax Requirements and Remittance

City of Frankfort Tax Obligations:

• 6% Kentucky Sales Tax (collected by Airbnb, remitted by platform)
• 1% Kentucky Transient Room Tax (collected by Airbnb, remitted by platform)
• 4% City of Frankfort Transient Room Tax (owner must remit quarterly)
• 4% Franklin County Transient Room Tax (owner must remit quarterly)
• 2% Fine Arts Tax (paid to Franklin County Treasurer quarterly)

Franklin County Tax Obligations:

• 6% Kentucky Sales Tax (collected by Airbnb, remitted by platform)
• 1% Kentucky Transient Room Tax (collected by Airbnb, remitted by platform)
• 4% Franklin County Transient Room Tax (owner must remit quarterly)
• 2% Fine Arts Tax (paid to Franklin County Treasurer quarterly)

Critical Note: Airbnb only collects and remits Kentucky state taxes (6% sales tax + 1% transient tax). All local taxes are the owner's responsibility and must be remitted quarterly to avoid penalties and interest.

Enforcement and Penalties

City of Frankfort Enforcement:

• First Violation: $100 citation if not corrected within 10 days of notice
• Continuing Violations: $25 per day for each subsequent day
• License Revocation: Required if violation continues beyond correction timeframe
• Additional Penalties: Interest and back tax payments for late tax remittance
• Legal Action: May result from continued operation in violation

Enforcement Authority:

• City of Frankfort Planning and Community Development Department
• Violations handled through civil citation process
• License revocation possible for serious or repeated violations

Contact Information

City of Frankfort Planning Department

Address: P.O. Box 697, Frankfort, KY 40602
Phone: (502) 352-2094
Fax: (502) 875-8502
Website: www.frankfort.ky.gov
Department: Planning and Community Development
Hours: Not specified in provided content

Franklin County Planning & Zoning

Website: franklincounty.ky.gov
Contact information: Not fully provided in content, but departments handle business licenses and registration

Frankfort Tourist and Convention Commission

Address: 300 St. Clair St., Suite 102, Frankfort, KY 40601
Phone: (502) 875-8687
Email: [email protected]
Services: Can assist with tourism business operations and general STR guidance

Kentucky Department of Revenue

Website: revenue.ky.gov
Services: State tax guidance and remittance information

Important Source Links

Registration and Licensing Forms:

• City STR Registration Form
• City Business License Application
• Franklin County Business License

Legal Documents:

• Ordinance No. 22-2024 Series (Full STR Ordinance)
• City Transient Room Tax Information
• Franklin County Transient Room Tax Form
• Franklin County Fine Arts Tax Form

General Resources:

• Frankfort STR Information Portal
• Kentucky Sales Tax Information
• Kentucky Transient Room Tax Information

News Source:

• State Journal Article on New STR Regulations

Disclaimer: This guide is based on regulations effective as of December 2024. Regulations may change, and investors should verify current requirements with official city and county sources before proceeding with STR operations.