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

YES — Short-term rentals are explicitly allowed in Frankfort, Kentucky, under specific regulations established by Ordinance No. 22, 2024 Series. The City of Frankfort has adopted comprehensive zoning regulations that permit both owner-occupied and non-owner-occupied short-term rentals, with distinct requirements and restrictions for each type. These regulations took effect following final adoption on December 9, 2024, and are designed to balance the economic benefits of short-term rentals with neighborhood preservation.

How to Start a Short-Term Rental Business in Frankfort

Step 1: Understand Your Zoning Eligibility

Before proceeding, determine if your property is located in an area where short-term rentals are permitted:

Owner-Occupied Short-Term Rentals:

• Permitted as of-right uses in most residential districts
• Allowed in Special Capital and Special Historic Districts
• No caps on quantity for owner-occupied units
• Must meet primary residence requirements

Non-Owner-Occupied Short-Term Rentals:

• Permitted as conditional uses in Special Capital and Special Historic Districts only
• Subject to caps: 5% of total dwelling units in Special Capital District, maximum of 8 units in Special Historic District
• Requires conditional use permit approval from the Architectural Review Board (Special Capital) or Board of Zoning Adjustment

Step 2: Secure Required Permits and Licenses

City of Frankfort Requirements:

1. Annual Short-Term Rental Registration (due each year on May 1)

   • Registration form available through City Planning Department
   • $250 annual regulatory license fee per STR unit
   • Separate registration required for each rental unit

2. Business License (no exceptions, regardless of rental frequency)

   • Required under Title XI of City Code of Ordinances
   • Must be obtained before beginning operations

3. Rental Housing Inspection

   • Required at time of initial registration
   • Conducted by Planning and Community Development Department
   • Ensures compliance with Kentucky Building Codes and safety standards

Step 3: Tax Registration and Collection

You must collect and remit multiple taxes:

State Taxes (automatically collected by Airbnb/VRBO platforms):

• 6% Kentucky Sales Tax
• 1% Kentucky Transient Room Tax

Local Taxes (owner responsibility - platforms do not collect these):

• 4% City of Frankfort Transient Room Tax
• 4% Franklin County Transient Room Tax
• 2% Fine Arts Tax (paid to Franklin County Treasurer)

Important Note: While major platforms like Airbnb collect state taxes, property owners are responsible for remitting all local taxes. Failure to remit local taxes will result in penalties, interest, and back tax payments.

Required Documents, Permits, and Licenses

Primary Documentation Requirements:

For Registration Application:

• Completed Short-Term Rental Registration form
• Primary contact information (name, address, phone, email)
• Managing agent information (if different from applicant)
• Property address and bedroom count
• Declaration of "Owner-Occupied" or "Non-Owner-Occupied" status
• List of all hosting platforms where unit will be listed

For Owner-Occupied Status Verification: Must document primary residence using at least two of the following:

• Motor vehicle registration
• Driver's license
• Voter registration
• Tax documents showing premises as residence
• Utility bills

For Conditional Use Permits (non-owner-occupied in Special Capital/Historic Districts):

• Application to Architectural Review Board (Special Capital) or Board of Zoning Adjustment (Special Historic)
• Demonstration of compliance with district-specific criteria
• Consideration of neighborhood STR concentration
• Review of applicant's compliance record with other STRs

Required Safety and Compliance Items:

Fire Safety:

• Smoke detectors compliant with Kentucky Residential Code
• Evacuation plan posted in unit
• Fire extinguisher (recommended)

Compliance Documents:

• Current STR insurance proof
• Good Neighbor Guide posted in unit
• Contact information for host/manager posted conspicuously
• Compliance with City Noise Regulations (Section 131.01)
• Parking compliance with Article 12 requirements

Specific Regulations for Short-Term Rentals

Operational Restrictions:

Stay Limits:

• Maximum stay: 29 consecutive days for same occupant
• Single rental contract per dwelling unit at a time
• No more than 2 times number of bedrooms plus 4 individuals total occupancy

Owner-Occupied Special Provisions:

• May rent property for up to 24 days per calendar year while not residing there
• Still qualifies as owner-occupied during these periods
• Accessory dwelling units on same property as owner-occupied residence considered owner-occupied

Prohibited Activities:

• Food or alcoholic beverage preparation/service to guests by host
• Outdoor signage advertising the rental
• Private or commercial special events exceeding occupancy limits (parties, weddings, concerts)
• Rental of detached accessory structures except in permitted Detached Accessory Dwelling Units

Density and Concentration Controls:

Apartment Building Limitations:

• Under common ownership: Maximum 50% of units can operate as STRs
• Does not apply to individually-owned condominiums

Special District Caps:

• Special Capital District: Maximum 5% of total dwelling units as non-owner-occupied STRs
• Special Historic District: Maximum 8 non-owner-occupied STRs total

Conditional Use Review Factors:

• Number and concentration of existing STRs in vicinity
• Applicant's demonstrated compliance record
• Occupancy rates of other local STRs
• History of nuisance complaints for nearby STRs (including applicant's properties)

Parking Requirements:

• One parking space per rental contract
• Must comply with Article 12 parking requirements
• Off-street parking preferred before street parking
• Overnight street parking restrictions may apply

Enforcement and Penalties

Violation Process:

1. Initial Notice of Violation issued for any provision violation
2. 10-day correction period provided
3. Citation and civil penalty issued if violation not corrected
   • First offense: $100 citation
   • Each subsequent day violation continues: $25 per day
4. License revocation if violations continue beyond correction timeframe
5. Legal action possible in appropriate court jurisdiction

Revocation Triggers:

• Failure to correct violations within prescribed timeframe
• Two or more substantiated civil/criminal complaints (Planning Director may revoke)
• Failure to maintain active compliance with all regulations
• Operating without proper permits or licenses

Contact Information

City of Frankfort Planning and Community Development

Primary Authority for STRs

Physical Address: 315 West Second Street
Frankfort, KY 40601

Mailing Address: P.O. Box 697
Frankfort, Kentucky 40602

Phone: (502) 352-2094
Fax: (502) 875-8502
Website: www.frankfort.ky.gov

Office Hours: Contact department for current operating hours

Responsible For:

• STR registration and licensing
• Conditional use permit processing
• Enforcement actions
• Rental housing inspections
• Zoning compliance verification

Franklin County Planning & Zoning (for county properties outside city limits)

For properties in Franklin County but outside Frankfort city limits

Business License Applications: Available through county website
Contact: Franklin County Fiscal Court for specific contact information

Frankfort Tourist and Convention Commission

Tourism Marketing and Promotion Support

Address: 300 Saint Clair St., Suite 102, Frankfort, KY 40601
Phone: (502) 875-8687
Email: Available through website contact form
Website: visitfrankfort.com

Services:

• Tourism marketing support
• Transient room tax administration
• Visitor information resources
• Business promotion assistance

State Tax Information

Kentucky Department of Revenue

Sales/Use Tax: revenue.ky.gov/Business/Sales-Use-Tax/Pages/default.aspx
Transient Room Tax: revenue.ky.gov/Business/Transient-Room-Tax/Pages/default.aspx
General Business Line: Contact Kentucky Department of Revenue directly

Source Links

Primary Regulatory Documents:

• City of Frankfort Short-Term Rental Ordinance No. 22, 2024
• Short-Term Rental Registration Form

Tax Information:

• City of Frankfort Transient Room Tax Information
• Franklin County Transient Room Tax Return
• Franklin County Transient Room Tax Form
• Franklin County Fine Arts Tax Return

Business Licensing:

• City of Frankfort Business License Application
• Franklin County Business License Application

Additional Resources:

• Visit Frankfort STR Resource Page
• State Journal Article on New STR Regulations

Note: This guide is based on regulations effective as of December 2024. Investors should verify current requirements with the City Planning and Community Development Department before proceeding with any STR investments or operations.